I cover three topics in empirical microeconomics. In the first chapter, titled Investor Attention to Firm versus Market-wide Information Shocks: Evidence from North Korean Missile Tests, I study whether attention towards salient political events leads to underutilization of firm-specific information in the South Korean stock market. I find that companies with earnings surprises in the top quartile experience a 1.6% increase in the abnormal return on the announcement day, but a same-day missile test takes away 70% of the positive response. In the second chapter, titled Does Cultural Proximity Mitigate the Effect of Immigration on Electoral Outcomes? (with Gerard Domènech), we study the effect of immigration on electoral outcomes using individual-level administrative data in Spain. In a multiple instrumentations framework, we find that recent immigrants who arrived within two years are associated with an increase in the vote share of the extremist parties. Such an effect persists for additional two years but dissipates in the long-term. When split by regions of origin, African immigrants have the greatest impact, followed by Latin American immigrants. European immigrants do not affect the extremist vote shares. An analysis of the unemployment rate and the number of children suggests that immigrants tend to assimilate over time. The findings are consistent with the hypothesis that cultural proximity mitigates the political reaction to immigrants. In the third chapter, titled The Effect of Daddy Quota on Gender Labor Market Outcomes (with Petra Niedermeyerova), we study the impact of a father-specific parental leave policy on labor market outcomes in Quebec, Canada. Using a province-level difference-in-difference approach, we find that the so-called daddy quota increases the probability of employment for women and decreases the wage of younger men. The results suggest that the daddy quota promoted equal opportunities for women in the labor market. In a theoretical framework, we show that policy-driven changes in gender norms are consistent with our findings.

This paper investigates whether greater investor distraction on the Swedish stock market during the summer months of June, July and August leads to a more pronounced post earnings announcement drift (PEAD) effect, during the ten year period between 2000 and 2009. PEAD is an anomaly whereby the information contained in earnings announcements is not immediately or completely incorporated into stock prices, in the cases where the announcement contains an ‘earnings surprise’. The methodology involves using the standardised unexpected earnings (SUE) metric to measure the level of ‘earnings surprise’ and a buy and hold abnormal returns (BHAR) trading strategy to measure return. The study tests and confirms the existence of greater investor distraction during summer months on the Swedish market. For a holding period of 12 months, a BHAR trading strategy generates a greater abnormal return for summer months (11.3%) compared with the abnormal return for non-summer months (10.5%). These results are also interesting in a broader context, as they confirm the existence of the PEAD effect, one of the strongest counter-arguments to the efficient markets hypothesis (EMH); the foundation of many financial models used for stock market valuation. This is because, according to the EMH, in an efficient market it should not be possible to generate abnormal returns based on available information. However, it may be noted that these results do not take into account transaction costs. This means that while it can be demonstrated that there is greater investor distraction during the Swedish summer, in order to implement a successful trading strategy based on this finding, further testing would be required. Therefore, based on the findings of this paper, a number of areas for future research have been identified.