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Financing Decisions and Product Introductions of Private and Publicly Traded Firms

Phillips, Gordon M.; Sertsios, Giorgo - National Bureau of Economic Research (NBER) - 2014

We exploit Medicare national coverage reimbursement approvals of medical devices as a quasi-natural experiment to investigate how private and publicly traded firm financing decisions and product introductions respond to exogenous changes in investment opportunities. We find that publicly traded...

Persistent link: https://www.econbiz.de/10010950886

Outside Purchase Contracts, Human Capital and Firm Capital Structure

Phillips, Gordon M.; Moon, S. Katie - National Bureau of Economic Research (NBER) - 2014

We examine the impact of outside purchase contracts on firm risk and firm capital structure. We find that firms with more outside purchase contracts have less risky cash flows. Despite these less risky cash flows, firms with these contracts also have less financial leverage especially when they...

Persistent link: https://www.econbiz.de/10010951012

Trade Credit and Taxes

Hines, James R. Hines, Jr.; Desai, Mihir A.; Foley, C. Fritz - National Bureau of Economic Research (NBER) - 2012

This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax …-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those …-tax jurisdictions use trade credit to lend, whereas those in high-tax jurisdictions use trade credit to borrow: ten percent lower local …

Persistent link: https://www.econbiz.de/10011271378

Neoclassical Factors

Zhang, Lu; Chen, Long - National Bureau of Economic Research (NBER) - 2007

Building on neoclassical reasoning, we propose a new multi-factor model that consists of the market factor and factor mimicking portfolios based on investment and productivity. The neo- classical three-factor model outperforms traditional factor models in explaining the average returns across...

Persistent link: https://www.econbiz.de/10005830265

Investment-Based Underperformance Following Seasoned Equity Offerings

Zhang, Lu; Lyandres, Evgeny; Sun, Le - National Bureau of Economic Research (NBER) - 2005

Adding a return factor based on capital investment into standard, calendar-time factor regressions makes underperformance following seasoned equity offerings largely insignificant and reduces its magnitude by 37-46%. The reason is that issuers invest more than nonissuers matched on size and...

Persistent link: https://www.econbiz.de/10005580565

Overconfidence and Early-life Experiences: The Impact of Managerial Traits on Corporate Financial Policies

Malmendier, Ulrike; Tate, Geoffrey; Yan, Jonathan - National Bureau of Economic Research (NBER) - 2010

We show that measurable managerial characteristics have significant explanatory power for corporate financing decisions beyond traditional capital-structure determinants. First, managers who believe that their firm is undervalued view external financing as overpriced, especially equity. Such...

Persistent link: https://www.econbiz.de/10008624578

Are Firms in "Boring" Industries Worth Less?

Chen, Jia; Hou, Kewei; Stulz, René M. - National Bureau of Economic Research (NBER) - 2015

Using theories from the behavioral finance literature to predict that investors are attracted to industries with more salient outcomes and that therefore firms in such industries have higher valuations, we find that firms in industries that have high industry-level dispersion of profitability...

Persistent link: https://www.econbiz.de/10011133503

The Cost of Diversity: The Diversification Discount and Inefficient Investment

Rajan, Raghuram G.; Servaes, Henri; Zingales, Luigi - National Bureau of Economic Research (NBER) - 1998

In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions. The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...

Persistent link: https://www.econbiz.de/10005777474

Grossman-Hart (1986) Goes Global: Incomplete Contracts, Property Rights, and the International Organization of Production

Antras, Pol - National Bureau of Economic Research (NBER) - 2011

I survey the influence of Grossman and Hart's (1986) seminal paper in the field of International Trade. I discuss the implementation of the theory in open-economy environments and its implications for the international organization of production and the structure of international trade flows. I...

Persistent link: https://www.econbiz.de/10009321289

Physical Capital, Knowledge Capital and the Choice Between FDI and Outsourcing

Chen, Yongmin; Horstmann, Ignatius J.; Markusen, James R. - National Bureau of Economic Research (NBER) - 2008

There exist two approaches in the literature concerning the multinational firm's mode choice for foreign production between an owned subsidiary and a licensing contract. One approach considers environments where the firm is transferring primarily knowledge-based assets. An important assumption...

Persistent link: https://www.econbiz.de/10005830204

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