We propose that syndicate pressure distorts unaffiliated analysts' incentive to produce information. To examine this newly proposed conflict of interest problem, we separate unaffiliated analysts into two types. The first type is the analysts employed by syndicate banks, which do not have direct...

We examine how monitoring costs and costs of financial distress affect the use of performance pricing provisions in bank loan contracts. We find that firms that are easier to monitor, such as those with better accounting quality, lower information opacity, or a stronger prior relationship with...

We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of “good” employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and...

By integrating the staggered interstate bank deregulation into a gravity model following Goetz, Laeven, and Levine (2013, 2016), we construct a time-varying bank-specific instrument for geographic diversification and investigate its causal effect on corporate innovation via the lending channel....

Consistent with the monitoring role of analysts, we find work-related injury rates are negatively related to higher levels of analyst coverage. This result is robust to approaches designed to mitigate endogeneity concerns and is stronger in industries where unions are less powerful, for firms...

We examine the effect of bank interventions on corporate innovation and firm value via the lens of debt covenant violations. Bank interventions have a significantly negative effect on innovation quantity, but no significant effect on quality. The reduction in innovation quantity is concentrated...

To what extent do credit lines provide liquidity insurance? We investigate this question using a unique dataset with firms' actual draw-down rates and find that firms draw down their lines of credit at higher rates than the initial contract rates recorded in Dealscan. More importantly, we find...

This paper examines the financial and operational hedging activities of U.S. pharmaceutical and biotech firms that are subject to high level of information asymmetry stemming from R&D investments during 2001-2006. We find evidence in support of the information asymmetry hypothesis à la Froot,...

Debt covenant violation alters firm dynamics, providing creditors with the right to demand repayment, and via that right, influence firm actions. We provide evidence consistent with creditors employing that channel to influence CEO compensation. Using regression discontinuity analysis, we show...