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Bulow, Jeremy I.; Huang, Ming; Klemperer, Paul - C.E.P.R. Discussion Papers - 1996

Part ownership of a takeover target can help a bidder win a takeover auction, often at a low price. A bidder with a ‘toehold’ bids aggressively in a standard ascending auction because its offers are both bids for the remaining shares and asks for its own holdings. While the direct effect of...

Persistent link: https://www.econbiz.de/10005136550

Does the director labor market offer ex post settling-up for CEOs? The case of acquisitions

Harford, Jarrad; Schonlau, Robert J. - In: Journal of Financial Economics 110 (2013) 1, pp. 18-36

We examine the rewards for experience and ability in the director labor market. We show that large acquisitions are associated with significantly higher numbers of subsequent board seats for the acquiring CEO, target CEO, and the directors. We also find that, in the case of acquisitions,...

Persistent link: https://www.econbiz.de/10010702373

On the Incentive Problems in Financial Conglomerates

Lóránth, Gyöngyi - C.E.P.R. Discussion Papers - 2002

This paper analyses the effects of scope expansion on the core activity of banks and provides a rationale for their interest in offering a wider product range. We show that scope economies may stem from moral hazard in the core business, and argue that a cost of scope expansion might be the...

Persistent link: https://www.econbiz.de/10005791861

Corporate investment and changes in GAAP

Shroff, Nemit - 2012

This paper investigates whether changes in Generally Accepted Accounting Principles (GAAP) affect corporate investment … decisions. Using a sample containing forty nine changes in GAAP, I find that changes in accounting rules affect investment … decisions. I then examine two mechanisms through which changes in GAAP affect investment. First, I find that changes in GAAP …

Persistent link: https://www.econbiz.de/10010195104

Understanding discretion in conservatism: An alternative viewpoint

Roychowdhury, Sugata; Martin, Xiumin - In: Journal of Accounting and Economics 56 (2013) 2, pp. 134-146

Various studies have investigated variation in reporting conservatism with pre-specified contractual incentives. Lawrence et al. (forthcoming), hereafter LSS, propose a model to control for “normal” or “non-discretionary” conservatism while testing for variation in conservatism with...

Persistent link: https://www.econbiz.de/10011043082

Contract heterogeneity, operating shortfalls, and corporate cash holdings

Jiang, Hao; Kim, U-chʾan; Rao, Ramesh K. - 2009

There is anecdotal evidence that the primary reason why managers hold cash on their balance sheets is to cover operating losses (operating shortfalls). In this paper, we rationalize this as an optimal response in a world with contract heterogeneity. Specifically, we relax the standard assumption...

Persistent link: https://www.econbiz.de/10003904170

The information environment and the investment decisions of multinational corporations

Shroff, Nemit; Verdi, Rodrigo S.; Yu, Gwen - 2012 - Current draft: March 2012

This paper examines how the external information environment in which foreign subsidiaries operate affects the investment decisions of multinational corporations (MNCs). We hypothesize and find that the investment decisions of foreign subsidiaries in country-industries with more transparent...

Persistent link: https://www.econbiz.de/10009579236

A dialogue on the costs and benefits of automatic stays for derivatives and repurchase agreements

Duffie, Darrell; Skeel, David - 2012 - Last rev.: March 04, 2012

For nearly two years, the two of us have had a running discussion of the costs and benefits of automatic stays in bankruptcy for qualified financial contracts (QFCs) such as derivatives and repurchase agreements, particularly those held by systemically important major dealer banks. Under current...

Persistent link: https://www.econbiz.de/10009504439

Quadrophobia : strategic rounding of EPS data

Grundfest, Joseph A.; Malenko, Nadya - 2011

Managers' incentives to round up reported EPS cause under-representation of the number four in the first post-decimal digit of EPS, or "quadrophobia." We develop a novel measure of aggressive financial reporting practices based on a firm's history of quadrophobia. Quadrophobia is pervasive and...

Persistent link: https://www.econbiz.de/10009506620

Diversity on corporate boards : how much difference does difference make?

Rhode, Deborah L.; Packel, Amanda K. - 2010

In recent years, increasing attention has focused on the influence of gender and racial diversity on boards of directors. Sixteen countries now require quotas to increase women's representation on boards, and many more have voluntary quotas in corporate governance codes. In the United States,...

Persistent link: https://www.econbiz.de/10009506954

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