The effect of corporate governance may depend on a firm's financial slack. On one hand, financial slack may be spent by managers for their private benefits; a high level is likely associated with severe agency conflicts. Thus corporate governance matters more for high financial slack firms...

We investigate the effect of shareholder litigation risk on corporate culture. We measure corporate culture by a novel machine learning metric following Li et al. (2021). Exploiting exogenous declines in shareholder litigation rights and derivative lawsuit risk following the staggered adoption...

Prior research has often taken the view that entrenched managers tend to avoid debt. Contrary to this view, we find that firms with entrenched managers, as measured by the Gompers et al. (2003) governance index, use more debt finance and have higher leverage ratios. To address the potential...

Permanent or long-term large shareholders have different governance incentives and mechanisms from institutional investors. Liquidity could facilitate either cutting and running by large shareholders or, alternatively, increased monitoring. Using an exogenous shock to liquidity in China, we...

We model the vulnerability of an economy to a financial crisis as arising from the interaction of the degree of economic specialization and the intermediated financing of the investment opportunities. The probability of a financial crisis is shown to increase in the degree of economic...

Employing the American Inventor’s Protection Act (AIPA) that mandates, all patent applications are to be published within 18 months after filing, as a quasi-natural experiment, we find that accelerated patent disclosure increases stock price crash risk. This effect is stronger when treated...

We investigate the effect of fiduciary duty of loyalty on corporate culture measured by a novel machine learning approach. We apply a difference-in-differences method exploiting the staggered adoption of the Corporate Opportunity Waiver (COW) law in the U.S. states as an exogenous decline in the...

We exploit the arrival of industry-wide synergistic merger waves to identify whether classifiedboards deter takeover bids. In a stylized model, we show that when target classified boards arecostly to bidders, their negative effect on takeover likelihood is more pronounced during mergerwaves....

We highlight that the inalienable nature of human capital can crucially determine corporate payouts. Exploiting the staggered rejections of the inevitable disclosure doctrine (IDD) across 15 U.S. states as exogenous shocks that potentially increase the mobility of key talents, we find that...

Recent surveys show that 24% of independent directors in Russel 3,000 firms have continuously served on their boards for fifteen years or more. Based on a sample of S&P 1500 firms over the period 1998-2012, we document strong positive effects on financial performance for firms with one, very...