Following surprise independent director departures, affected firms have worse stock and operating performance, are more likely to restate earnings, face shareholder litigation, suffer from an extreme negative return event, and make worse mergers and acquisitions. The announcement returns to...

Market liberalization may not result in global pricing or full market integration if implicit barriersare important. We test this proposition for 22 emerging markets using the conditional version ofErrunza and Losq (1985) model. We estimate and compare the degree of integration for stocksthat...

We survey research on corporate finance in Europe. The ambition is to provide the reader with an overview of what we learned, particularly since the beginning of the 1990s. We focus on two themes: (1) the practice and institutions in Europe are heterogeneous and different from those in the...

We analyze the risk levels chosen by agents who have private information regarding their quality, and whose performance will be judged and rewarded by outsiders. Assume that risk choice is observable. Even risk-neutral agents will choose risk strategically to enhance their expected reputation....

We conduct an experiment assessing the extent to which people trade off the economic costs of truthfulness against the intrinsic costs of lying. The results allow us to reject a type-based model. People's preferences for truthfulness do not identify them as only either quot;economic typesquot;...

We study changes in the design of CEO contracts when firms transition from being public with dispersed ownership to being private with strong principals in the form of private equity sponsors. These principals redesign many, but far from all, contract features. There is no evidence that they...

This paper provides a cross-country analysis to determine whether CEO turnover is a credible threat, whether it is effective in delivering performance improvements, and whether better governance improves credibility and effectiveness of CEO turnover. The analysis is based on a detailed panel of...

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...

Market integration and currency risk are two main factors that distinguish international investment and financing decisions. Hence, we investigate the impact of currency factor on the dynamics of market integration. We compare integration indices estimated from conditional international asset...

Despite international financial disintegration, we document a dramatic increase in dollar borrowing among leveraged Eurozone corporates during the Great Financial Crisis. Using loan-level data, we trace this increase to the twin crisis in the credit market and in funding markets. The reduction...