Window Dressing Research Articles

Portfolio Pumping in Singapore: Myth or Reality?

A 2004 case involving portfolio pumping led to the successful prosecution of a fund manager in Singapore in 2010. Relative to the prominent profile of the fund manager and the size of the AUM (Assets under management) under his charge, the amount of fines doled out was not significant. The signaling effect on the industry towards improving market integrity is therefore unknown. Against this background and together with the availability of hard to come by tick by tick equity market transaction data from the Singapore Exchange, we commenced a quantitative enquiry to examine the bourse’s degree of portfolio pumping activity before and after the legal prosecution and regulatory events.During the process, we also attempted to understand whether the existing regulatory framework is effective in dealing with such activities. Portfolio pumping (also known as marking the close) occurs when the price of a stock is bid up artificially at the end of the day (typically at quarter ends), and thereafter reverts down to its market equilibrium level the following day. Our findings found excess returns at the year ends, however it did not find evidence that these were due to portfolio pumping activities. The study also found limited evidence of window dressing activities (window dressing occurs when poor-performing stocks in the portfolio are sold and replaced with well-performing stocks. This typically occurs at the end of the year in an effort to paint a favorable picture of the fund manager’s portfolio when it is published in the annual report). We suspect that these results were due to the combination of the signaling effects of enforcement actions and relevant reforms in the regulatory framework, making portfolio pumping activity an expensive affair. The study also identified common characteristics of Singapore-listed companies that might merit further analysis.

Included, but still not equal? Gender segregation at quota regulated boards

In 2003 Norway introduced a new regulation that required at least 40 percent of each gender on company boards. Norway was the first country in the world to introduce such a law, but several countries have since proposed similar arrangements. Before the reform, opponents of the law in Norway claimed that the new women directors would not be allowed to participate fully in board decision-making. Instead, their role would only be window dressing. Based on a questionnaire sent to all directors in public limited companies in 2009, the article studies this allegation. Results show that women directors report less ability to influence board decision making than men directors. Moreover, women to a lesser extent feel they are part of the inner circle on boards where such phenomena is perceived to exist. These tendencies also hold when we control for many other independent variables such as board role, ownership interest, number of directorships, and occupation, among others. Hence, the quota regulated boards might show tendencies of gender hierarchies and resegregation.

Why do we examine calendar anomalies only in financial markets? Month effect evidence from the Greek banking industry

Calendar anomalies (CAs) have been puzzling financial economists and practitioners for decades. The existence of CAs violates one of the most significant financial theories: the efficient market hypothesis (Fama in J Finance 25:383–417, 1970). Up to date most financial economists have examined the existence of CAs only in capital markets. However, as most scholars suggest, an economy’s financial structure includes two main distribution channels: financial markets and financial intermediaries. Therefore, a question that emerges is why do we examine the CAs only in financial markets? Banks are the most important amongst the financial intermediaries; therefore in this study we try to implement the CAs approach to banking. We present the theoretical framework and analytically explain how we apply this approach to banking. In order to examine whether CAs exist we implemented this newly suggested approach in the Greek time deposits market during the period 2003–2013 and we provided empirical evidence for a month effect pattern. The CAs existence: (1) is an indication of market inefficiency, (2) it could be an indirect way to conclude the window dressing (WD) implementation, which is a way to increase the bank opacity, (3) documents a new calendar effect, and (4) may suggest a new approach to the banking efficiency study. Moreover, CAs could be linked to bankers’ WD behavior, “forcing” them to increase the new offered bank premiums at the quarters’ end, in order to attract more deposits.

The Second Arab Awakening: Revolution, Democracy, and the Islamist Challenge from Tunis to Damascus

The Second Arab Awakening: Revolution, Democracy, and the Islamist Challenge from Tunis to Damascus

Challenges of corporate social responsibility (CSR) in domestic settings: An exploration of mining regulation vis-à-vis CSR in Ghana

While some attempts have been made by countries such as Indonesia to make corporate social responsibility (CSR) mandatory, the whole idea everywhere else is benched on the voluntariness and discretion of corporations to pick and choose what would constitute their social responsibility initiatives. But the argument is that for countries with weaker regulation, corporations may not do much in terms of real CSR activities that transcend mere window dressing. This paper examines the domestic institutional dynamics that influence CSR policies and practices in Ghana. It attempts to emphasize the argument that effective domestic regulation and governance can play a role in ensuring sustainable corporate practices and initiatives, leading to a positive impact on the lives of people living in local mining communities. Insight for the paper is drawn from interviews conducted with several stakeholders in Ghana’s mining sector, including government officials and officers of two foreign-owned mining companies (i.e. Newmont Ghana Gold Ltd. and Chirano Gold Mines Ltd.).

Incremental Value Relevance of Disaggregated Book Values and Disaggregated Earnings: Evidence from Nigeria

The link between accounting information and firm value has attracted the attention of accounting and finance researchers since the seminar work of Ball and Brown (1968) and Beaver (1968). The association of accounting information with firm value is value relevance research. Value relevance is the degree to which accounting information captures information impounded in stock prices. Ohlson (1995) provided the conceptual linkage between accounting information and firm value. Since then, value relevance research has increased in volume and diversity. A trend in this line of enquiry is to determine if disaggregated accounting information is incrementally value relevant beyond bottom line accounting information. The objective of this paper was to ascertain if disaggregated accounting information has more value relevance compared to bottom line measures for firms listed on the Nigerian Stock Exchange Market. We specifically investigated the value relevance of disaggregated accounting information for Nigerian listed firms, using a sample of 940 firm-years from 1994 to 2013. The study contributes to the extant value relevance literature by employing a methodology that accounts for documented inefficiencies of the Nigerian capital market. Given the analysis conducted, findings indicate that disaggregated earnings are incrementally value relevant beyond bottom line earnings. Besides, disaggregated book value is found to be more value relevant compared to book value. In the light of these findings, both investors and analysts should shift emphasis from bottom line accounting information, like earnings and book value to disaggregated accounting numbers to improve the quality of investment decisions they make. Besides, regulatory authorities must improve on the corporate governance environment in order to mitigate incidences of window dressing, creative accounting and other corporate malfeasances

Is Audit Quality Associated with Window Dressing of Short-Term Borrowings in the Banking Industry?

We investigate the role of audit specialists in the banking industry. Different from prior research examining audit specialists in nonfinancial firms, we find that banks audited by specialists have lower levels of both accruals management (through abnormal loan loss provisions) and real activities management (through quarter-end repo transactions). We also find that this reduction of accruals and real activities management exists in banks audited by national as well as city level specialists.

Board Overlaps in Mutual Fund Families

We examine a unique characteristic of mutual fund governance: a common set of di- rectors serving simultaneously on the boards of multiple funds within a fund family. At rst glance, this governance structure appears to bene t investors because it is associated with higher fund returns and better fund manager quality. However, funds with higher degrees of board overlap also charge higher marketing and distribution fees, which have been criticized as being the least transparent cost component for mutual fund investors. Board overlaps are also associated with detrimental unobserved actions by fund managers: window dressing and strategic performance transfer between funds occur more often in mutual fund families with greater degrees of director overlap. We conclude that director oversight of multiple funds is a mixed blessing.

National bank window dressing and the call loan market, 1865–1872

Abstract After the American Civil War, market observers attributed increases in interest rates around quarterly reporting dates to window dressing by national banks. Window dressing is a temporary change in portfolio designed to produce a more appealing report to regulators or to the public. This paper tests for increases in interest rates at quarter end under a natural experiment, a change in the reporting law. Using daily data on the call loan interest rate in New York City, we find no evidence of systematic increases in the call loan rate just before the quarterly reporting dates of national banks.

Re-examination of the banking window dressing theory

Purpose – The purpose of this paper is to re-examine in detail the banking window dressing (WD) theory. Using data from the Greek banking industry during the euro period (2001-2013), the results suggest that there are signs of upward assets and deposits WD. Moreover, it tries to explain, using new-alternative approaches, the incentives for the WD and how the deposits WD occur. Design/methodology/approach – To examine why bank managers upwardly WD the deposits and which strategy increases the regular payments cost, the author uses a Granger causality procedure and confirms the theory that the aim of increased assets report causes the deposits WD. Moreover, using a GARCH(1,1) and a methodological approach that is usually used in calendar anomalies, but is more flexible than the one usually applied, enables us not only to confirm that there is a WD but also under which mechanisms it occurs. Findings – Bank managers prefer to pay increased regular payments due to the upward deposits WD to upwardly WD the bank assets, for the following reasons: they receive compensation depending on the assets’ volume, they gain prestige and most managers try to present increased bank assets and deposits to include them in the “too big to fail ” (TBTF) regime. The author also finds that managers increase the new offered bank premiums in the quarters’ end to attract more deposits, and in this way, the deposits WD occurs. Research limitations/implications – The findings of this study are limited to the Greek case, but the methodological approach may be applied to other cases to examine the WD theory and it could present a new-flexible way for WD research. Practical implications – Examining the institutional framework, the theoretical background and the results, the author may suggest that reforms, at least in the way that the regular payment to the Greek deposits insurer are paid, should be applied. In Greece, 80 per cent of the regular DIS payments are deposited in the same financial institution. This reduction of the ratio significantly increase the deposits WD cost. Originality/value – The contribution of this paper is to re-examine the WD theory and to suggest new and more flexible methodological approaches. Moreover, this is the first study that examines the WD for the Greek case.

The calculus of corruption: a paradox of ‘strong’ corruption amidst ‘strong’ systems and institutions in developing administrative systems

Without the right political will to battle corruption, systems and institutions are put in place and tend to be façade and window dressing. Ghana, especially, in the new millennium has seen the proliferation of various institutions ostensibly to curb the phenomenon of corruption, yet its impact has only been marginal. This study adopts two models of corruption to critically assess the institutional development of Ghana since the Fourth Republican Dispensation and how these institutions have impacted the fight against corruption. The study adopts mainly secondary data and resources from the 1992 Republican Constitution, Acts of Parliaments and Legislative Instruments relevant corruption combat. An analysis of the corruption perception index of Ghana from 2000 to 2014 and other data portrays poor performance. What accounts for this phenomenon? Are there really demons who obstruct the spirit and letter of the institutions? Are the systems weak or the human elements (demons) rather stronger in adapting and outsmarting the institutions? Copyright © 2015 John Wiley & Sons, Ltd.

Performance Budgeting: Incentives and Social Waste From Window Dressing

Performance budgeting schemes in the public sector have to operate with imperfect performance measures. We argue that these imperfections generate incentives for the potential recipients of performance-based funds to use up resources in socially wasteful window dressing. Using a theoretical model, we analyze the trade-off between the efficiency-enhancing effect of performance budgeting (PB) and the social waste it induces. We show that the social waste from window dressing may outweigh the gains from PB. This social waste provides an explanation for the mixed empirical evidence concerning the impact of PB on public sector performance. We provide first guidance on how to assess window dressing and its consequences in future empirical studies.

Visual Merchandising: The Image of SellingLouisaIarocci, Editor. Burlington, VT: Ashgate, 2013.

Visual Merchandising: The Image of Selling Louisa larocci, Editor. Burlington, VT: Ashgate, 2013.With this collection of essays, architectural historian and editor Louisa larocci presents a fascinating thumbnail of the history of merchandising and its relationship to commercial visual culture. Together, the essays in this book examine spaces of display and consumption both historically and as an artistic practice. In a realm where art and commerce intersect, visual merchandising-or, the artistic presentation of retail goods-creates its own distinctive visual language aimed at cultivating visual appeal and consumer desire (10). These essays, initially brought together at the Society for Architectural Historians annual meeting, provide an innovative look at the intersections between visual culture, design, consumption, and public space.Organized along the themes of promotion, product, and place, the twelve essays in this book collectively argue that commercial space has played an important role in influencing consumer habits, in driving advertising practice, and in changing American culture after 1880. Part One considers the relationship between print advertisements and their relationship to geographic space, whether the neighborhood, city, or nation. Part Two explores the ways that particular commodities shaped the retail environment itself, and Part Three explores the relationship between interior/ exterior design and selling in spaces such as automobile dealerships. Like any good anthology, this collection combines broad historical overviews-such as larocci's discussion of window dressing, for example-with narrow examinations of particular practices and themes, including the purposeful design of retail space to heighten appeals to consumers, the iconography of automobile hood ornaments, changing mannequin designs, commodities with exotic appeal, the merchandising of luxury goods (such as Armani), and the commodification of death vis-a-vis the funeral home. Some of the most intriguing essays here include Kathleen Chapman's look at German advertising posters and Emily Bills' examination of AT&T's advertising campaigns in the early twentieth century.According to Chapman, the German Sachplakat, or object poster, was developed in response to the increasingly fast-paced and visually-saturated environment of the modern city at the turn of the twentieth century (38). The Sachplakat minimized design elements and eliminated the lengthy advertising texts more common in magazine advertisements of the time. The highly stylized posters functioned like a hieroglyph, a word-picture that [could] be apprehended instantly in a process that prioritize[d] seeing over reading (40). This type of environment-driven aesthetics became one of the first advertising appeals developed specifically for the fast-moving and visually-loud cityscape, complete with its omnibuses, street cars, dense foot traffic, and increasing use of electric lighting and signage. …

The Changing Role of Reserve Bank of India in Bank Supervision and Corporate Governance with the Introduction of Risk Based Parameters

The role of RBI has undergone through a rigorous change over the period of time. Earlier, it was a common perception that the roles of RBI is confined to credit control by changing different key policy rates depending on the economic environment of the national as well as international level. In the recent past the global banking practices faced a number of jugglery and malpractices such as window dressing, over and undervaluation of mortgage and collateral, overpricing the default risk and under pricing the credit risk. Basel III is a recently developed area of the banking sector where major impetus was provided towards the liquidity risk. The objective of the research paper is to identify the changing role of RBI, interpret the changes which have taken place with the implementation of Basel norms, analyze the role of the central banks as controller of the liquidity of the nation, demonstrate the challenges of measuring, mitigating and managing of different type of risks, develop the strategies to combat against non performing assets and critically analyze the corporate governance framework of the banks. The proposed research paper will incorporate the secondary information available on Risk management in banking, scope and direction of the successive Basel norms and corporate governance practice followed by Indian banks. This paper will focus a paradigm shift in the role of RBI. It will provide a new dimension in the literature of corporate governance, risk management in banking and ethical obligations of the banks as well as successful implantation of International Basel Norms on capital adequacy framework by issuance of relevant norms and guidelines.

The Importance of Setting a Target: The EU Ambition of a High Level of Protection

AbstractThe European Union (EU) aims to ensure a high level of environmental protection. This is a key message of primary EU law. This article explores the purpose and meaning of this explicit ambition. It deciphers its influence on case law and on judicial review of legislative and administrative discretion. It argues that the requirement goes beyond window dressing and that its added value lies both in supporting the legitimacy of bold decisions and in preventing a manifest dismissal of the requisites of environmental protection.Although primarily focused on EU law and on its technicalities, the article may offer helpful insights to other transnational or federal systems. It may help to build a better understanding of some of the challenges facing any environmental law regime confronted with the sensitive issue of ‘ambition’.

The Baron’s Cloak: A History of the Russian Empire in War and Revolution by Willard Sunderland (review)

Reviewed by: The Baron’s Cloak: A History of the Russian Empire in War and Revolution by Willard Sunderland Samuel J. HIRST (bio) Willard Sunderland, The Baron’s Cloak: A History of the Russian Empire in War and Revolution (Ithaca: Cornell University Press, 2014). 368pp., ills. Bibliography. Index. ISBN: 978-0-8014-5270-3. Willard Sunderland recently noted the irony that the imperial turn in Eurasian historiography, although often dated to Andreas Kappeler’s sweeping synthesis, has generally produced works focused “on breaking things down rather than building.”1 While Sunderland’s new bookis certainly the deeply researched microhistory that he claims it is, it is also more. The Baron’s Cloak builds, and it offers an important new interpretation of key issues in the late imperial period from colonialism and modernization to Russification and nationalism. The owner of the cloak – Baron Nikolai Roman Max von Ungern-Sternberg – is the ostensible subject of the book, but Sunderland superbly demonstrates the rewards of seeing a life as a microhistory. He distances himself from biographers who, he claims, write with the conviction that a life has at least some value in and of itself; instead, Sunderland uses Ungern to write the story of the Russian Empire. In his mobility, Ungern shared much with the subjects of a growing number of “imperial” or “transnational” lives.2 If diversity is to be part of the definition of empire – as Sunderland insists (P. 5) – no location or tribe can be taken as representative. And though the category of the imperial life is first a challenge to narrative structured by ethnic or national identity, movement has become an all but requisite component. While plenty of imperial lives were defined by immobility, mobile men and women provide narrative focus for the circulation of bodies, goods, and ideas that transnational historians highlight as evidence of the interconnectedness of places in the past. Ungern was born in 1886 in what is now Austria, spent his childhood in what is now Estonia, trained to be [End Page 557] an officer in what is now once again St. Petersburg, and is best known for leading troops that captured what is now the capital of Mongolia. He was shot in 1921, shortly after the last feat, and most historical accounts focus on the end of this story. Sunderland, however, strives to pay equal attention to each phase in Ungern’s life. The absence of reliable sources for the earlier years is both obstacle and opportunity.3 Each chapter is devoted to a particular geography, and with few documents for Ungern’s time in many of these places, Sunderland is able to choose stories that allow him to engage most productively with the existing historiography. Ungern’s childhood in Estonia presents occasion to analyze the dilemma that local “subcontractors” faced in an increasingly homogeneous imperial order; service in Manchuria during the Russo-Japanese War is reason to tell the story of the Trans-Siberian railroad and Russia’s “pivot to the East” as a part of a new, more racialized imperialism; and Ungern’s 1913 journey through Mongolia allows Sunderland to advance an argument about the emergence of Russian “neocolonialism.” But if the documents for Ungern’s story are scarce, Sunderland has been meticulous in reconstructing the places he moved through. The sources are in many languages, from across the breadth of the Russian Empire: Estonian reveals key information about the burning of Ungern’s childhood home (P. 59 n. 61) and Chinese does the same for negotiations in Kiakhta in 1921 (P. 193 nn. 7–8). Sunderland makes this a wonderfully textured history by drawing on nontextual sources as well. His reading of the eponymous cloak presages his close reading of photographs and the physical spaces of Ungern’s journey. Throughout, the detail is more than window dressing and becomes a part of Sunderland’s analysis. By his own words, Sunderland set out to “offer a tableau” (P. 229) and to “take the measure” (P. xii) of the Russian Empire; fittingly, therefore, the arguments emerge gradually. Sunderland contends that the Russian Empire must be understood as part of European imperial history. Ungern’s Habsburg origins set the stage for the theme of...

Commentary on Stone: The Fallout in My Groups From Having Written a Book About My Experiences as a Patient–Trainee

Commentary on Stone: The Fallout in My Groups From Having Written a Book About My Experiences as a Patient–Trainee Robert S. Pepper1 issn 0362-4021 © 2015 Eastern Group Psychotherapy Society group, Vol. 39, No. 2, Summer 2015 163 1 Director of Training, Long Island Institute of Mental Health, Rego Park, New York. Correspondence should be addressed to Robert S. Pepper, PhD, CGP, 110-50 71st Road, #1E, Forest Hills, NY 11375. E-mail: DrRobertSPepper@aol.com. Heisenberg (1927), in his work with quantum mechanics, noticed that measuring the direction of a subatomic particle changed its speed, and measuring its speed changed its direction. From these observations, he derived his famous theory of indeterminacy, which states with deceptive simplicity, “To observe something is to change it.” Perhaps a similar thing could be said of my experience leading treatment groups in the wake of the publication of my new book on boundaries in analytic group psychotherapy. Writing about it has changed it. And, as with so many things in life, the results have been decidedly mixed. When I wrote the manuscript, my daughter expressed concern that I was revealing too much about myself. She felt protective of me. In my many years of practicing and writing about group therapy, I have been scrupulous about keeping personal disclosure to a minimum, but in this age of Google and Internet access, I have come to the conclusion that motivated patients can readily find out plenty about me anyway, so I decided to be more open about myself and my experiences as a patient–therapist at a group training institute. If it weren’t for my editor, who called my memoir-like material “window dressing,” I would have revealed even more. But, at the same time, I was torn between wanting to tell it all and protecting my groups, and myself, from too much exposure of my neurotic side. Part of my motivation for writing the book was to set the record straight with critics of earlier writings who had accused me of taking a “holier than thou” attitude toward the complications of dual relationships in the training of group therapists. I took it personally when one reviewer of an article that I submitted for publication in a prestigious group journal rejected it, using an ad hominem argument to 164 pepper discredit me. He wasn’t the only one to have assumed that I wrote from an ivory tower when it came to blurred boundaries and that I had no real life experience with their downside. Nothing could have been further from the truth. I wrestled with the conflict over wanting to avenge myself and vengeance’s possible negative impact on my groups—and on me. When the book came out, I decided not to announce its publication to my groups. Even if it weren’t unethical, I thought it inappropriate to promote my narcissism and my financial interest on group time. As much as I have been scrupulous about transparency, I have also strived to be careful to provide a safe environment for my groups. Having been trained and treated in group therapy under one roof, where the boundary was blurred between therapy and not-therapy, and where I had seen the harm that can ensue as a result, I had vowed to do it differently in my practice , which means, among other things, that there is no social contact outside the group room. Although publishing a memoir-ish book is a long way from creating dual relationships, I worried that it might be too close for comfort for some group members. I have since issued a disclaimer to group members who have expressed an interest in reading the book: “It may contain more personal information about me than you want to know” (or than I may have wanted to reveal). I decided to wait and see if members would google me and find out about the publication and for it to come to light that way. However, the unconscious mind always rules, and I unconsciously on purpose (I suppose) outed myself. I “inadvertently ” left the book on my desk in the group room, so when several snoopy members saw it lying there...

Turn-of-the-Month: Window Dressing Behavior

We study the impact of trading during the end of the month cycle. We find that there is a meaningful negative expected return from owning equities in the last trading hour of the month. The effect is large and potentially exploitable by investors that are not tied to monthly reporting cycles. The return pattern is different from other days in equity markets and has persisted over more than a decade. The effect is generally larger for US small cap indices than large cap indices.The reasons for the effect may be related to window dressing by fund managers, risk control, lottery-ticket behavior or less likely market manipulation. The effect applies to broad indices making it less likely that it is driven by a few traders but rather by the behavior of a large group of traders responding to the same incentives.

Systematic and transparent inclusion of ethical issues and recommendations in clinical practice guidelines: a six-step approach.

BackgroundClinical practice guidelines (CPGs), a core tool to foster medical professionalism, differ widely in whether and how they address disease-specific ethical issues (DSEIs), and current manuals for CPG development are silent on this issue. The implementation of an explicit method faces two core challenges: first, it adds further complexity to CPG development and requires human and financial resources. Second, in contrast to the in-depth treatment of ethical issues that is standard in bioethics, the inclusion of DSEIs in CPGs need to be more pragmatic, reductive, and simplistic, but without rendering the resulting recommendations useless or insufficiently justified. This paper outlines a six-step approach, EthicsGuide, for the systematic and transparent inclusion of ethical issues and recommendations in CPGs.MethodsThe development of EthicsGuide is based on (a) methodological standards in evidence-based CPG development, (b) principles of bioethics, (c) research findings on how DSEIs are currently addressed in CPGs, and (d) findings from two proof-of-concept analyses of the EthicsGuide approach.ResultsThe six steps are 1) determine the DSEI spectrum and the need for ethical recommendations; 2) develop statements on which to base ethical recommendations; 3) categorize, classify, condense, and paraphrase the statements; 4) write recommendations in a standard form; 5) validate and justify recommendations, making any necessary modifications; and 6) address consent. All six steps necessarily come into play when including DSEIs in CPGs.ConclusionsIf DSEIs are not explicitly addressed, they are unavoidably dealt with implicitly. We believe that as ethicists gain greater involvement in decision-making about health, personal rights, or economic issues, they should make their methods transparent and replicable by other researchers; and as ethical issues become more widely reflected in CPGs, CPG developers have to learn how to address them in a methodologically adequate way. The approach proposed should serve as a basis for further discussion on how to reach these goals. It breaks open the black box of what ethicists implicitly do when they develop recommendations. Further, interdisciplinary discussion and pilot tests are needed to explore the minimal requirements that guarantee a simplified procedure which is still acceptable and does not become mere window dressing.

Institutions and the turn-of-the-year effect: Evidence from actual institutional trades

Using a large proprietary database of institutional trades, we investigate whether institutional investors drive the turn-of-the-year (TOY) effect. Institutions that engage in window dressing, tax-loss selling, or risk shifting will contribute to the TOY effect by selling small, poorly performing stocks at the end of December and/or buying those same stocks at the beginning of January. We find abnormal pension fund selling in small stocks with poor past performance during the final trading days in December, providing some support for the window dressing hypothesis. However, we find little evidence that institutional tax-loss selling or risk-shifting trading strategies contribute to TOY returns. Furthermore, stocks with no institutional trading around the year-end exhibit considerably stronger TOY return patterns than stocks in which institutions trade. Taken together, our results suggest that institutions play a limited role in driving the TOY effect.