Theories of banks as efficient monitors could suggest that bank debt should be junior to other creditors in order to precipitate bankruptcy when other creditors are still in-the- money. This paper provides an explanation why bank debt is usually senior: banks would more strongly contest the...

This paper examines how imperfect institutional memory affects organizational decisions. In our model, a manager knows his firm's previous actions but (owing, e.g., to turnover) not the rationale for these actions. If the environment is stable, we find that a firm that has followed an old policy...

Governments and vocal institutional shareholders have been exerting pressure on companies they deem to have objectionable operations (such as tobacco or chemical producers). This paper studies the effect of the most important legislative and shareholder boycott to date, the boycott of the South...

Ritter and Loughran~(1995a) and Spiess and Affleck-Graves~ (1995) document that firms issuing seasoned equity offerings (SEOs) severely underperform the stock market within five years after the offering. Our paper examines the hypothesis that SEO investors are too optimistic because they naively...

This study predicts cross-sectional investment (capital expenditure) changes in the U.S., Canada, Great Britain, Europe, and Japan. We find that lagged stock returns are the most important cross-sectional (and positive) predictors of investment (capital expenditure) increases in all five...