We investigate the effect of Lesbian, Gay, Bisexual and Transgender (LGBT)-supportive corporate policies on credit ratings. To the extent that LGBT-friendly policies are beneficial to the firm and therefore improve its expected cash flows, credit rating agencies should assign more favorable...

We examine the impact of CEO tenure on corporate labor investment efficiency. While some studies show that CEO entrenchment increases in tenure (e.g., Hermalin and Weibach, 1998), others argue that managerial expertise builds over time in the office (e.g., Graf-Vlachy et al., 2020). Using a...

Motivated by the on-going debate on the costs and benefits of CSR, we explore how talented managers view CSR investments. Based on nearly 20,000 observations across 17 years, our evidence reveals a non-monotonic effect of managerial talent on CSR. Exploiting a novel measure of managerial ability...

This study seeks to ascertain the impact of employee stock ownership plans (ESOPs) on earnings management. The empirical evidence shows that firms with larger ESOP ownership exhibit a lower degree of earnings management. I suggest that this is the case because ESOPs motivate employees to monitor...

Grounded in agency theory, this study explores agency costs as a determinant of dividend policy. Specifically, we examine how dividends are related to the strength of shareholder rights. The evidence reveals an inverse association between dividend payouts and shareholder rights, indicating that...

The purpose of this study is to determine whether earning management is exacerbated or alleviated in diversified firms. An explicit distinction is made between industrial and geographic diversification. The empirical evidence shows that earnings management is mitigated by 1.8% in industrially...

We show how capital structure is influenced by the strength of shareholder rights. The empirical evidence shows an inverse relationship between leverage and shareholder rights, suggesting that firms adopt higher debt ratios where shareholder rights are more restricted. This is consistent with...

Grounded in agency theory, this study investigates how the strength of shareholder rights influences the extent of firm diversification and the excess value attributable to diversification. The empirical evidence reveals that the strength of shareholder rights is inversely related to the...

Grounded in agency theory, this study investigates how the strength of shareholder rights influences the extent of firm diversification and the excess value attributable to diversification. The empirical evidence reveals that the strength of shareholder rights is inversely related to the...

Grounded in agency theory, this paper investigates the effect of board independence on managerial ownership. We exploit the passage of the Sarbanes-Oxley Act and the associated exchange listing requirements as an exogenous regulatory shock that raises board independence. Our...