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Ordonez, Guillermo L.; Nosal, Jaromir - National Bureau of Economic Research (NBER) - 2013

Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate endogenous crises when the government cannot commit. However, at the outbreak of financial problems, usually the government is uncertain about their nature, and hence it may delay...

Persistent link: https://www.econbiz.de/10010969240

Smokescreen: How Managers Behave When They Have Something To Hide

González, Tanja Artiga; Schmid, Markus; Yermack, David - National Bureau of Economic Research (NBER) - 2013

unusually low CEO turnover and rely on internal management promotions. Their managers exercise stock options faster than … managers of other firms. Cartel firms are large donors to political candidates. While our results are based only upon firms … engaged in price fixing, we expect that they should apply generally to all companies in which managers seek to conceal poor …

Persistent link: https://www.econbiz.de/10010969328

Capital Gains Lock-In and Governance Choices

Dimmock, Stephen G.; Gerken, William C.; Ivković, Zoran; … - National Bureau of Economic Research (NBER) - 2014

Because of differences in accrued gains and investors' tax-sensitivity, capital gains "lock-in" varies across mutual funds even for the same stock at the same time. Using this variation, we show that tax lock-in affects funds' governance decisions. Higher tax lock-in decreases the likelihood a...

Persistent link: https://www.econbiz.de/10010969406

Understanding Corporate Governance Through Learning Models of Managerial Competence

Hermalin, Benjamin; Weisbach, Michael S. - National Bureau of Economic Research (NBER) - 2014

A manager's shareholders, board of directors, and potential future employers are continually assessing his ability. A rich literature has documented that this insight has profound implications for corporate governance because assessment generates incentives (good and bad), introduces assorted...

Persistent link: https://www.econbiz.de/10010950722

Strategic News Releases in Equity Vesting Months

Edmans, Alex; Goncalves-Pinto, Luis; Wang, Yanbo; Xu, Moqi - National Bureau of Economic Research (NBER) - 2014

We show that CEOs strategically time corporate news releases to coincide with months in which their equity vests. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. CEOs reallocate news into vesting...

Persistent link: https://www.econbiz.de/10010950794

CEO Investment Cycles

Pan, Yihui; Wang, Tracy Yue; Weisbach, Michael S. - National Bureau of Economic Research (NBER) - 2013

This paper documents the existence of a CEO Investment Cycle, in which firms disinvest early in a CEO's tenure and increase investment subsequently, leading to "cyclical" firm growth in assets as well as in employment over CEO tenure. The CEO investment cycle occurs for both firings and...

Persistent link: https://www.econbiz.de/10010950835

Risk, Ambiguity, and the Exercise of Employee Stock Options

Izhakian, Yehuda; Yermack, David - National Bureau of Economic Research (NBER) - 2014

We investigate the importance of ambiguity, or Knightian uncertainty, in executives' decisions about when to exercise stock options. We develop an empirical estimate of ambiguity and include it in regression models alongside the more traditional measure of risk, equity volatility. We show that...

Persistent link: https://www.econbiz.de/10010950897

Blockholders and Corporate Governance

Edmans, Alex - National Bureau of Economic Research (NBER) - 2013

This paper reviews the theoretical and empirical literature on the different channels through which blockholders (large shareholders) engage in corporate governance. In classical models, blockholders exert governance through direct intervention in a firm's operations, otherwise known as "voice."...

Persistent link: https://www.econbiz.de/10010950935

Unethical Culture, Suspect CEOs and Corporate Misbehavior

Biggerstaff, Lee; Cicero, David C.; Puckett, Andy - National Bureau of Economic Research (NBER) - 2013

We show that firms with CEOs who personally benefitted from options backdating were more likely to engage in other forms of corporate misbehavior, suggestive of an unethical corporate culture. These firms were more likely to overstate firm profitability and to engage in less profitable...

Persistent link: https://www.econbiz.de/10010950964

Financing Through Asset Sales

Edmans, Alex; Mann, William - National Bureau of Economic Research (NBER) - 2013

Most research on firm financing studies the choice between debt and equity. We model an alternative source - non-core asset sales - and allow asset sales to occur for operational as well as financing motives. We identify three new factors that drive a firm's choice between selling assets and...

Persistent link: https://www.econbiz.de/10010950971

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