Steven C Mann

• Texas Christian University

We document that borrowing costs and credit ratings are less sensitive to off-balance sheet lease financing than to on-balance sheet debt financing, particularly for firms that are financially constrained and firms that have limited ability to use tax shields. This evidence is consistent with theoretical predictions based on tax benefits as well as...

This paper investigates evidence of learning among thousands of new entrants to a population of professional futures floor traders over a six-year period. We document several empirical regularities consistent with different types of learning. First, traders appear to rationally learn about ability: only about 15% of the traders survive more than on...

We contribute to the current debate on the accounting treatment of operating leases by providing evidence from bond markets and private lending on the market recognition of the role of leasing in determining borrowing costs and credit ratings. Borrowing costs and credit ratings are less sensitive to lease obligations than to debt financing for firm...

In this paper we examine the role of off-balance sheet leasing in determining firm borrowing costs and credit ratings. Borrowing costs increase and credit ratings decrease as firms add debt, whether on or off balance sheet. However, we find that borrowing costs and credit ratings are more sensitive to balance sheet debt than to off balance sheet fi...

We provide evidence of rational reference-dependent preferences in the proprietary trading of professional traders. We find increased trading effort and risk taking by traders following morning losses. Further analysis provides no evidence of a deterioration in trading performance subsequent to losses, as neither risk-adjusted performance nor trade...

There is much recent interest in the role of market timing in firm financial decisions. Using a large detailed sample of corporate public debt issues, private placements, Rule 144A issues and bank loans over the period 1970-2006, we investigate the relationship between interest rate changes and issues of floating and fixed-rate debt. Our results in...

"Using a sample that comprises more than 14,000 new issues of corporate debt for the period 1970-2001, we examine the relation between debt issues and the level of interest rates relative to historical levels. Consistent with recent survey evidence, we find that companies issue more debt, more debt relative to investment spending, and more debt com...

Recent evidence indicates irrational behavior among retail investors. They hold onto losses and sell winners in a manner consistent with the disposition effect. Market professionals often use the term “discipline” to indicate trading strategies that minimize potential behavioral influences. We investigate the nature of trading discipline and whethe...

Graham and Harvey (2001) provide survey results suggesting that managers attempt to time interest rates in their debt issuance decisions. Some of their results may be interpreted as forward-looking (i.e., trying to issue before interest rates rise), and some are backward-oriented, suggesting issuance when interest rates are low compared to historic...

A commonly cited motivation for off-balance sheet financing is a reduction in reported book (balance sheet) leverage. Operating leases, the most common form of off-balance sheet financing, are required to be disclosed in financial statement footnotes, but limited disclosure complicates external evaluation of the effective amount of off-balance shee...

Recent survey evidence suggests that managers try to time financial markets in making their financing decisions. We examine a sample of more than 14,000 new issues of corporate debt to test for evidence of timing of new debt issues. We focus our attention on interest rates in terms of their decile rankings relative to historical rates, and we ident...

We examine the trading activity of a population of professional futures traders for evidence of the behavioral characteristics generally referred to as overconfidence and/or "gambling with the house money". The results are broadly consistent with the Gervais and Odean (2001) model of overconfidence and learning, which predicts that successful and i...

We consider trading costs in the transparent, competitive open outcry markets of the Chicago Mercantile Exchange (CME), in which market makers have no affirmative obligation to trade. We document that while CME spreads are similar in magnitude to those in other markets, realized spreads are often negative. A plausible explanation is that CME market...

This paper employs a highly detailed data set to analyze the trading profits of futures market makers by decomposing profits into two components, one due to the sale of liquidity and the other due to the impact of price movements. Because our data reports trade direction (buy or sell) we are able to discover several empirical regularities that have...

We provide evidence that, in the futures markets, off-exchange customers' trades with locals have a larger impact on prices than other types of trades. Furthermore, it appears that locals' trades are at least as strongly related to volatility as customers' trades. This evidence is derived from a detailed examination of generally proprietary CFTC da...

this paper. We would also like to thank Peter Alonzi, Kerry Back, Hank Bessembinder, Corinne Bronfman, Doug Foster, Peter Locke, Norman Mains, Steve Manaster, Rex Thompson and seminar participants at Southern Methodist University for their comments and advice on earlier versions of this paper. Spread Behavior in Competitive Markets This paper exami...

We use futures transaction data to investigate cross-sectional relationships between market-maker inventory positions and trade activity. The investigation documents strongly that traders control inventory throughout the trading day. Despite this evidence of inventory management, typical inventory control models are contradicted by our data. These...

We analyze futures market liquidity using audit trail data that allows for direct calculation of market attributes such as depth, spread and spread-free volatility. Depth is relatively stable throughout the trading day, in particular contrast to customer spreads, which are much higher at open and close, consistent with equity market evidence. Inter...

Thesis (Ph. D.)--David Eccles School of Business, University of Utah, 1994. Includes bibliographical references (leaves [134]-139).