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AbstractThis paper uses a sample of firms listed in the NYSE, AMEX, and NASDAQ between January 1963 and December 2012 to analyze the interaction between size effect and momentum effect in cross‐sectional stock returns. Furthermore, this paper focuses on the evolution of this interaction through different market states. I report a significant shift in stock returns structure during the rising markets of the 1990s and the 2000s. First, momentum has absorbed the size effect. Second, the momentum effect has become stronger in larger, not smaller, firms. These patterns are indicative of a strong interaction between the two effects. Conceivably, in up markets, firms grow fast, and thus, the size and momentum effects stem from a common economic phenomenon: growth. The findings are robust to variations in the length of the formation period and to the use of residual return (instead of total return) to rank stocks.

AbstractThis study joins a rapidly growing body of research that investigates the multi‐faceted impacts of the Covid‐19 pandemic on consumers' behavior. Specifically, we examine how the pandemic‐induced state of vulnerability impacts consumers' saving, investing, and spending decisions. Using survey data from four different countries (i.e., USA, UK, South Africa, and Mexico), we examine the role of personality on consumer vulnerability, create an index of consumer vulnerability, and establish the role of vulnerability in impacting important financial decisions. We report evidence that perceptions of vulnerability and the pandemic‐induced changes in financial and consumption behaviors vary across residents of developed and developing countries. The results indicate that vulnerability is experienced and reflected through a multitude of fears and concerns and is influenced by personality traits (agreeableness, neuroticism, conscientiousness, need for material resources, and need for body resources) and can result in increased spending on products/services that are not normally perceived as necessities. Our findings carry important theoretical and managerial implications.

AbstractThe present research examines the relationship between emotional vulnerability, economic vulnerability, and intentions to improve financial planning for American households in the post‐Covid‐19 era. Using a survey of 504 household financial decision markers, we show that the effects of psychological fears and concerns experienced during the pandemic (i.e., emotional vulnerability) on post‐pandemic household financial planning intentions are mediated by their perceived economic vulnerability. Specifically, for those who experience higher levels of emotional vulnerability, economic vulnerabilities are perceived to be harsher, further motivating them to raise their financial preparedness. Moreover, we identify an individual factor, personality trait of conscientiousness, as a boundary condition affecting this relationship. Specifically, individuals who are more conscientious tend to be more willing to learn from harsh pandemic experiences and are more willing to adapt in the long run.