This paper examines how the onset of a financial crisis affects the operation of internal capital markets among firms within a diversified business group. We find that active internal capital markets within Korean business groups (chaebols) attenuated the financial constraints of the...

Using the quarterly Compustat files, we present empirical findings that business capital investment is significantly higher in the fourth quarter than in other quarters. Even after controlling for business capital investment determinants, we find that the fourth quarter capital investment is...

Using a sample of over 3,000 seasoned equity offerings (SEOs) from 1983 to 1998, we test the hypothesis that the U.S. Securities and Exchange Commission's Rule 10b-21, which disallows the covering of short positions with newly issued SEOs, makes pre-offer stock prices less informative, which, in...

The SEC was established to protect investors by providing quot;full and fairquot; disclosure of information regarding publicly offered securities through regulatory procedures. Despite the potential importance of the SEC's role, little research has been performed on the effects of the SEC's...

Using segment information from Compustat from 1978 through 1992, we find that investment by a segment of a diversified firm depends on the cash flow of the firm's other segments. The investment by segments of highly diversified firms is larger and less sensitive to their cash flow than the...

Using the quarterly Compustat files, we present empirical findings that business capital investment is significantly higher in the fourth quarter than in other quarters. Even after controlling for business capital investment determinants, we find that the fourth quarter capital investment is...

The evidence presented here is inconsistent with variants of corporate finance theory which hold that the option properties of growth opportunities or asset substitution incentives are first-order determinants of equity values, but it is supportive of risk management and capital structure...

Using a sample of over 3,000 seasoned equity offerings (SEOs) from 1983 to 1998, we find significant SEO discounts (underpricing) during the 1990s, but not during the 1980s. The natural question is: Why do we observe a difference between the 1980s and 1990s? Among the different explanations that...

We show that Tobin's q, as proxied by the ratio of the firm's market value to its book value, increases with the firm's systematic equity risk and falls with the firm's unsystematic equity risk. Further, an increase in the firm's total equity risk is associated with a fall in q. The negative...