Vol. 65 April 2010 No.

2
Editor
CAMPBELL R. HARVEY
Duke University
Co-Editor
JOHN GRAHAM
Duke University
Associate Editors
ANAT R. ADMATI
Stanford University
YACINE AIT-SAHALIA
Princeton University
ANDREW ANG
Columbia University
KERRY BACK
Rice University
MALCOLM BAKER
Harvard University
HENDRIK BESSEMBINDER
University of Utah
MICHAEL W. BRANDT
Duke University
ALON BRAV
Duke University
MARKUS K. BRUNNERMEIER
Princeton University
DAVID A. CHAPMAN
Boston College
JENNIFER S. CONRAD
University of North Carolina
FRANCESCA CORNELLI
London Business School
BERNARD DUMAS
INSEAD
DAVID HIRSHLEIFER
University of California, Irvine
BURTON HOLLIFIELD
Carnegie Mellon University
HARRISON HONG
Princeton University
NARASIMHAN JEGADEESH
Emory University
STEVEN N. KAPLAN
University of Chicago
G. ANDREW KAROLYI
Cornell University
JONATHAN M. KARPOFF
University of Washington
ARVIND KRISHNAMURTHY
Northwestern University
MICHAEL LEMMON
University of Utah
FRANCIS A. LONGSTAFF
University of California, Los Angeles
ANDREW METRICK
Yale University
TOBIAS J. MOSKOWITZ
University of Chicago
DAVID K. MUSTO
University of Pennsylvania
TERRANCE ODEAN
University of California, Berkeley
CHRISTINE A. PARLOUR
University of California, Berkeley

LUBO S P ASTOR
University of Chicago
LASSE H. PEDERSEN
New York University
MITCHELL A. PETERSEN
Northwestern University
MANJU PURI
Duke University
RAGHURAM RAJAN
University of Chicago
MICHAEL R. ROBERTS
University of Pennsylvania
ANTOINETTE SCHOAR
Massachusetts Institute of Technology
HENRI SERVAES
London Business School
ANIL SHIVDASANI
University of North Carolina
RICHARD STANTON
University of California, Berkeley
ANNETTE VISSING-JORGENSEN
Northwestern University
ANDREW WINTON
University of Minnesota
Business Manager
DAVID H. PYLE
University of California, Berkeley
Editors Staff
WENDY WASHBURN
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Volume 65 CONTENTS for APRIL 2010 No. 2
ANNOUNCEMENT OF 2009 SMITH BREEDEN
AND BRATTLE GROUP PRIZES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
MORGAN STANLEYAMERICAN FINANCE ASSOCIATION AWARD
FOR EXCELLENCE IN FINANCE 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
ARTICLES
The Variability of IPO Initial Returns
MICHELLE LOWRY, MICAH S. OFFICER, and G. WILLIAM SCHWERT. . . . . . . . 425
Levered Returns
JOAO F. GOMES and LUKAS SCHMID. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
The New Game in Town: Competitive Effects of IPOs
HUNG-CHIA HSU, ADAM V. REED, and J ORG ROCHOLL . . . . . . . . . . . . . . . . . . . 495
Financial Structure, Acquisition Opportunities, and Firm Locations
ANDRES ALMAZAN, ADOLFO DE MOTTA, SHERIDAN TITMAN,
and VAHAP UYSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
Taxes on Tax-Exempt Bonds
ANDREW ANG, VINEER BHANSALI, and YUHANG XING. . . . . . . . . . . . . . . . . . . . 565
Do Bonds Span Volatility Risk in the U.S. Treasury Market?
A Specication Test for Afne Term Structure Models
TORBEN G. ANDERSEN and LUCA BENZONI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603
Personal Bankruptcy and Credit Market Competition
ASTRID A. DICK and ANDREAS LEHNERT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655
Corporate Political Contributions and Stock Returns
MICHAEL J. COOPER, HUSEYIN GULEN, and ALEXEI V. OVTCHINNIKOV. . . . 687
The Interdependent and Intertemporal Nature of Financial Decisions:
An Application to Cash Flow Sensitivities
VLADIMIR A. GATCHEV, TODD PULVINO, and VEFA TARHAN. . . . . . . . . . . . . . . 725
Performance and Persistence in Institutional Investment Management
JEFFREY A. BUSSE, AMIT GOYAL, and SUNIL WAHAL. . . . . . . . . . . . . . . . . . . . . 765
MISCELLANEA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791