AN NBER PUBLICATION ISSUE: No. 7, July 2009

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Each foreclosure that takes place 0.05 miles away lowers the price of a house by about 1 percent. The expansion of mortgage credit earlier this decade and the recent decline in house prices have led to an unprecedented increase in foreclosures since 2006. Foreclosures transfer houses to financial institutions that must maintain and protect them until they can be sold. Foreclosed houses are likely to sell at low prices, both because they may have been physically...

Research Summaries

Article
...the Summary Prospectus reduces the amount of time spent on the investment decision, but there does not seem to be any resulting change in the portfolio choices of individual investors. Because some regulators believe that the average investor has a hard time reading the statutory prospectuses that mutual funds distribute, the SEC recently proposed and subsequently adopted a new simplified disclosure document. Mutual funds now have the option of sending investors...
Article
...foreign student demand for U.S. doctorate programs, especially in science and engineering, has grown in countries where undergraduate education has expanded. One of the most significant transformations in U.S. graduate education and the international market for highly-trained workers in science and engineering during the last quarter century is the representation of students from outside of the United States among the ranks of doctorate recipients from U.S....
Article
Foreign firms list shares in the United States in order to raise capital at the lowest possible cost to finance growth opportunities and, when those opportunities disappear, a listing becomes less valuable. In Why Do Foreign Firms Leave U.S. Equity Markets? (NBER Working Paper No. 14245), authors Craig Doidge, G. Andrew Karolyi,and Rene Stulz investigate Securities and Exchange Commission (SEC) deregistrations by foreign firms from the time the Sarbanes-Oxley...
Article
In the long run, low rates of fertility are associated with diminished economic growth. As in many parts of the world, Europe has seen a rapid decline in fertility. In 1960, Estonia was the only European nation whose total fertility rate was less than two. Today, only two European countries -- Albania and Iceland -- have fertility rates above two. Several factors are thought to be driving that decline in Western Europe: socioeconomic incentives to delay...
Article
...after Enron, firms expanded the number of pages of their annual 10-K filings, notably the sections containing the financial statements and footnotes. In a new NBER Working Paper, Christian Leuz and Catherine Schrand study how firms' disclosure choices are related to their cost of capital by examining firms' adjusted disclosure policies in response to the Enron scandal in fall 2001. Their paper, Disclosure and the Cost of Capital: Evidence from Firms'...

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