Essays on the cultural factors and behavioral biases

Abstract

This dissertation includes three essays on the cultural factors and behavioral biases. The first study examines how the cultural heritage of CEOs affects R&D investment, and shows that a CEO with a high power distance heritage is more likely to increase R&D expenditures which generate significantly lower benefits in the future. The second study focuses on the behavioral bias for delayed reaction to bad news, and reports that the stocks with frequent negative daytime returns show low performance subsequently. The last paper examines whether price momentum profit is related to earnings information in the Korean stock market, and shows that price momentum profits are explained by return on equity.