We show that some influential literature supporting the RPM efficiency view is flawed when it relies on the presale service justification for RPM. In particular we consider presale services that do not modify in use value of a good, what we term sterile services. We debunk what we call the Bork...

A structural event study methodology accounts for the interaction of two M&A effects: synergy (total value) and dominance (bargaining power). This interaction jointly (simultaneously) determines the parties’ abnormal returns. We propose an instrumental variable approach. An application in...

The Brazilian privatization program raised about US$100 billion as a result of the sale of state-owned firms and assets over the period 1990 to 2001. Despite official claims that the privatization auctions were successful in revenue raising, statistical evidence suggests that the buyers, not the...

Product information which is beneficial for an individual consumer may hurt if disseminated widely. Even with rational expectations, a fallacy of composition may occur if information leads to demand and price increases.

We use the Korean Financial Crisis as a natural laboratory for examining interactions among firm diversification, equilibrium capital structure and tail probability events. When the crisis hit in 1997, several major firms, including a large number of highly leveraged conglomerates (Chaebols),...

The Brazilian privatization program raised about US$100 billion as a result of the sale of state-owned firms and assets over the period 1990 to 2001. Despite official claims that the privatization auctions were successful in revenue raising, statistical evidence suggests that the buyers, not the...

Some claim that the event-study methodology literature is quot;maturequot;. But the overlooked IVWA-based test is more powerful than conventional tests. Its implementation requires the same inputs as the traditional test. Its functional form yields the power improvement. Using CRSP monthly data...