Traditional macroeconomics finds a multiplier of 1.0 when taxes and expenditures are increased by the same amount. It results from uniform tax increases and a constant marginal propensity to consume. We show that a greater multiplier results when the tax rate increases on those with a lower...

The extant literature on trade credit emphasizes its financing role wherein financially sound firms provide trade credit to ease the credit constraints of weaker trading partners. We offer an alternative, though not mutually exclusive, perspective in which trade credit serves as a commitment...

We develop and test hypotheses on the impact of target shareholders investment style preferences on the method of payment and premiums in acquisitions. Stock offers (unlike cash offers) allow target shareholders to defer capital gains taxes. This deferral value, however, depends on target...

We examine the extent to which a fund's cash flows are affected by the stellar performance of other funds in its family - and consequences of such spillovers. We show that star performance results in greater cash inflow to the fund and to other funds in its family. Moreover, families with higher...

We use a novel database to study the timeliness of hedge fund managers' voluntary disclosures of monthly fund returns. We show that funds disclose returns at a much slower rate when performance is poor. Funds often release the returns of two or more months together in clusters. These clusters...

We study the role of covenants in syndicated bank loans. We argue that, in addition to being a device for monitoring the borrower, covenants can help mitigate conflicts of interest between the lead-arranger and participating banks in the syndicate. Such disagreements can arise when, for...

We investigate the importance of board expertise by analyzing the role of “directors from related industries” (DRIs) on a firm's board. DRIs are officers and/or directors of companies in the upstream (supplier) or downstream (customer) industries of the firm. About 40% of firm-years in our...

The extant literature on trade credit emphasizes its financing role wherein financially sound firms provide trade credit to ease the credit constraints of weaker trading partners. We offer an alternative, though not mutually exclusive, perspective in which trade credit serves as a commitment...