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Disclosure and the Cost of Capital: Evidence from Firms' Responses to the Enron Shock
Leuz, Christian; Schrand, Catherine - National Bureau of Economic Research (NBER) - 2009
This paper examines the link between disclosure and the cost of capital. We exploit an exogenous cost of capital shock created by the Enron scandal in Fall 2001 and analyze firms' disclosure responses to this shock. These tests are opposite to the typical research design that analyzes cost of...
Persistent link: https://www.econbiz.de/10005714190
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Capital Structure and Debt Structure
Sufi, Amir; Rauh, Joshua D. - National Bureau of Economic Research (NBER) - 2008
substantial fraction of capital structure variation. We then show that relative to high credit quality firms, low credit quality … subordinated non-bank debt with loose covenants. Further, while high credit quality firms enjoy access to a variety of sources of … discretionary flexible sources of finance, low credit quality firms rely on tightly monitored secured bank debt for liquidity. We …
Persistent link: https://www.econbiz.de/10005580399
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Endogenous Information Flows and the Clustering of Announcements
Acharya, Viral V.; DeMarzo, Peter M.; Kremer, Ilan - National Bureau of Economic Research (NBER) - 2010
We consider the strategic timing of information releases in a dynamic disclosure model. Because investors don't know whether or when the firm is informed, the firm will not necessarily disclose immediately. We show that bad market news can trigger the immediate release of information by firms....
Persistent link: https://www.econbiz.de/10008684851
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Maturity Rationing and Collective Short-Termism
Milbradt, Konstantin; Oehmke, Martin - National Bureau of Economic Research (NBER) - 2014
Financing terms and investment decisions are jointly determined. This interdependence links firms' asset and liability sides and can lead to short-termism in investment. In our model, financing frictions increase with the investment horizon, such that financing for long-term projects is...
Persistent link: https://www.econbiz.de/10010969405
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Reaching for Yield in the Bond Market
Becker, Bo; Ivashina, Victoria - National Bureau of Economic Research (NBER) - 2013
important factor contributing to the credit cycle. This paper presents a detailed study of this phenomenon in the corporate bond … higher rated bonds. However, conditional on credit ratings, insurance portfolios are systematically biased toward higher …
Persistent link: https://www.econbiz.de/10010950683
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Limited Managerial Attention and Corporate Aging
Loderer, Claudio; Stulz, René; Waelchli, Urs - National Bureau of Economic Research (NBER) - 2013
As firms have more assets in place, more of management's limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory...
Persistent link: https://www.econbiz.de/10010950710
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Matching Capital and Labor
Berk, Jonathan B.; Binsbergen, Jules H. van; Liu, Binying - National Bureau of Economic Research (NBER) - 2014
We establish an important role for the firm by studying capital reallocation decisions of mutual fund firms. At least 30% of the value mutual fund managers add can be attributed to the firm's role in efficiently allocating capital amongst its mutual fund managers. We find no evidence of a...
Persistent link: https://www.econbiz.de/10010950822
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Governing Misvalued Firms
Kadyrzhanova, Dalida; Rhodes-Kropf, Matthew - National Bureau of Economic Research (NBER) - 2014
Equity overvaluation is thought to create the potential for managerial misbehavior, while monitoring and corporate governance curb misbehavior. We combine these two insights from the literatures on misvaluation and governance to ask 'when does governance matter?' Examining firms with standard...
Persistent link: https://www.econbiz.de/10010950985
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Financial Constraints on Corporate Goodness
Hong, Harrison; Scheinkman, Jose; Kubik, Jeffrey D. - National Bureau of Economic Research (NBER) - 2012
An influential thesis, dubbed "Doing well by doing good," argues that corporate social responsibility is profitable. But heterogeneity in firm financial constraints can induce a spurious correlation between profits and goodness even if the motives for goodness are non-profit in nature. We use...
Persistent link: https://www.econbiz.de/10010950999
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Limited Partner Performance and the Maturing of the Private Equity Industry
Sensoy, Berk A.; Wang, Yingdi; Weisbach, Michael S. - National Bureau of Economic Research (NBER) - 2013
We evaluate the performance of limited partners' (LPs) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991-1998 period,...
Persistent link: https://www.econbiz.de/10010951045