This paper examines the impact of capital gains taxation on firms’ investment and financing decisions. We develop a real options model in which the timing of investment, the decision to default, and the firm’s capital structure are endogenouslyand jointly determined. Our analysis shows that...

We propose an equity finance model with agency problems and investigate the relationship between dividend taxation and inefficient investments. Contrary to both the old and the new view of dividend taxation, a fall in the dividend tax rate is found to improve corporate governance by increasing...

This paper studies the corporate policy distortions caused by realization-based capital gains taxation at the personal level in a dynamic trade-off theory model. The lock-in effect of embedded capital gains creates severe conflicts of interest between incumbent and new investors. The firms...

In this paper, we use a unique hand-collected dataset to analyze stock listing as an entrepreneurial decision. By comparing mainland Chinese entrepreneurial firmslisted in Hong Kong with the same type of firms opting for a domestic listing on the Shenzhen second board market, we argue that the...

The wealth dynamics of insurance companies strongly depends on the success of their investment strategies, but also on liquidity shocks which occur during unfavorable years, when indemnities to be paid to the clients exceed collected premia. An investment strategy that does not take liquidity...

We characterize the conditions under which firms choose to (i) merge, (ii) form an alliance, or (iii) trade assets. For that prupose, we distinguish between the firms' assets (what can be traded in isolation), thei knowhow (what can be learned but not traded), and their core competencies (what...

Recent organizational theories suggest that there is a tradeoff between loyalty and competence. This paper tests several such theories in the context of public agencies. Prime ministers, chancellors, and kings alike need to secure the (efficient or inefficient) loyalty of their agencies, such as...

The paper develope a models for evaluating the optimal hedging and trading strategies under default risk mitigation policies. It deals with an exchange traded derivative Instrument, i.e. future contracts but ures can succeed in locking the asset value, but they may create two additional risks...

Companies' investments in research and development (R&D) are usually associated with better growth opportunities incorporated in the firms' market valuation. This study focuses on the question how does the firms' market value attributable to R&D investments depend on the firms' ability to employ...

The purpose of this note is to review and understand what is called the shareholders unanimity result in the finance literature. We first will stress that "unanimity" is an equilibrium concept, which requires that an investment decision in a largely held firm be taken only if all shareholders...