We study the effect of trust on debt contracting. We find that, after the revelation of option backdating, borrowers that likely backdated their previous option grants pay higher interest rates on loans. This adverse effect is mitigated by CEO replacements. Conversely, we find no impact on the...

We examine the effect of board independence on spending and payout policy using the 2003 NYSE and NASDAQ board independence requirements as an exogenous shock. Non-compliant firms that are forced to raise board independence reduce the spending on acquisitions and capital expenditures and...

We examine the effects of Chinese import penetration on executive compensation of US firms. We find that import penetration reduces executives' total compensation, stock grants, wealth-performance sensitivity, and opportunistic grant timing, suggesting that competition mitigates agency problems...

We examine the impact of social networks when they are likely to be most valuable. We find that firms well-connected to other firms through executives and directors have better performance and more investments during the 2007-2009 financial crisis, and this is especially true among financially...

We find evidence that labor unions affect CEO compensation. First, we find that firms with strong unions pay their CEOs less. The negative effect is robust to various tests for endogeneity, including cross-sectional variations and a regression discontinuity design. Second, we find that CEO...

We examine the effect of Chinese import penetration on the innovation activities of US manufacturers. We find that firms boost innovation in response to greater import penetration. The boost in innovation builds on narrow focus and familiar technology and results in greater product...

We examine how directors with investment banking experience affect a firm's acquisition behavior. We find that the presence of investment banker directors is associated with a higher probability of subsequent acquisitions, and such positive relation is not driven by reverse causality. Focusing...

We examine the effect of Chinese import penetration on the innovation activities of US manufacturers. We find that firms boost innovation in anticipation of greater import penetration. The boost in innovation relies on familiar technology and results in greater product differentiation. However,...

We investigate whether and how executives' social interactions affect their compensation. Using the social networks among 2,936 chief executive officers (CEOs) during 1999-2008, we report that socially connected CEOs receive significantly more similar compensation than non-connected CEOs. This...