Purpose It has been found that stock market returns vary seasonally with the amount of daylight, and they attribute this effect to seasonal affective disorder (SAD). which is a psychological condition that causes depression and heightened risk aversion during the fall and winter months. The goal of this study is to examine whether this effect also manifests itself in the pricing of initial public offerings (IPOs). Design/methodology/approach -The authors conduct an empirical analysis on IPO data collected over the period 1986-2000. Specifically. we examine potential pricing differences between lPO that go public during the fall and winter months, relative to other issues. The paper begins by exploring differences on a univariate basis (Le. testing via t-statistics), subsequently extending the analysis by controlling for firm and offer characteristics in a multiple regression framework.Findings -The paper finds that lPOs experience higher levels of underpricing in both the fall and winter months and that offer price revisions are higher during the winter months. Both of these results are consistent with SAD influencing the IPO pricing process.Originality/value The results suggest that behavioral issues (Le. the emotions of buyers) may have as much of an effect on the pricing of IPOs as more traditional characteristics. Further. the results imply that firms with flexible issuance schedules should avoid going public during months affected by SAD. thereby potentially reducing the cost of issuance.

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We examine the influence of credit rating changes on corporate excess cash holdings. We find that downgraded firms increase excess cash holdings by approximately 3% of total noncash assets, compared to a matched sample of firms without a rating change. We largely observe no significant cash policy change following upgrades. While our findings support existing studies on the value of precautionary cash hoarding in the face of increased financial constraint, we find hoarding is value‐decreasing for shareholders. The marginal value of excess cash declines by at least 40% for downgraded firms and much more so when firms have histories of excess cash hoarding.

Objective:To determine whether Lexington, Kentucky’s smoke-free law affected employment and business closures in restaurants and bars. On 27 April 2004, Lexington-Fayette County implemented a comprehensive ordinance prohibiting smoking in all public buildings, including bars and restaurants. Lexington is located in a major tobacco-growing state that has the highest smoking rate in the US and was the first Kentucky community to become smoke-free.Design:A fixed-effects time series design to estimate the effect of the smoke-free law on employment and ordinary least squares to estimate the effect on business openings and closings.Subjects and settings:All restaurants and bars in Lexington-Fayette County, Kentucky and the six contiguous counties.Main outcome measures:ES-202 employment data from the Kentucky Workforce Cabinet; Business opening/closings data from the Lexington-Fayette County Health Department, Environmental Division.Results:A positive and significant relationship was observed between the smoke-free legislation and restaurant employment, but no significant relationship was observed with bar employment. No relationship was observed between the law’s implementation and employment in contiguous counties nor between the smoke-free law and business openings or closures in alcohol-serving and or non-alcohol-serving businesses.Conclusions:No important economic harm stemmed from the smoke-free legislation over the period studied, despite the fact that Lexington is located in a tobacco-producing state with higher-than-average smoking rates.

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