We study the lobbying choices of firms that invest in green innovation. Using a novel method to determine the direction of a firm’s lobbying efforts, we find that green innovators are equally likely to lobby in favor of green or brown legislative agendas. To understand why firms’ lobbying...

In firms with multiple blockholders governance via exit is affected by how blockholders react to each others' exit. Institutional investors, who hold the majority of equity blocks, are heterogeneous in their incentives. How do these incentives affect the manner in which institutional...

We show that supply side effects arising from the bond holdings of open-end mutual funds affect corporate credit risk. In our model, funds exposed to flow-performance relationships are reluctant to refinance bonds of companies with poor cash flow prospects fearing future investor outflows as a...

We ask why we observe multiple layers of decision-making in fund management with investors, sponsors, fund managers, and consultants, even if additional decision-makers are costly and do not contribute to superior performance. In our model, an investor hires a wealth manager (“sponsor”), who...

Optimal risk sharing in financial markets requires investors with high risk-bearing capacity to hold relatively large stakes. But holding large stakes might incentivize such investors to expend resources in monitoring the firm, a public good. Does this dissuade them from acquiring large stakes?...