Distressed firms and the banks that lend to these firms often have conflicting interests when going through the Chapter 11 process, freefall bankruptcy vs prepack bankruptcy. We examine whether common ownership, i.e., an institution with holdings in both the borrowing and the lending firms,...

How does bank integration affect the market for corporate control for nonfinancial firms? We provide causal evidence that interstate bank deregulation affects acquisitions mainly through reducing the information asymmetry between acquirers and targets, instead of increased credit supply. After...

This paper analyzes the market reaction to CEO turnover announcements in the presence of information frictions. We find that the market reaction to forced CEO turnover announcements is negatively related to the level of asymmetric information between a firm and its investors. No such relation...

This paper examines the role of corporate governance for payout policy design from the perspective of pre-commitment. We test the effect of external and internal corporate governance on the design of payout policy and use of pre-commitment, level and structure of cash distributions, and firm...

We examine how firms structure payout and debt commitments to address governance weaknesses. Firms with severe agency conflicts precommit through a combination of dividends and debt or through dividends rather than debt alone. Such firms also shift their shareholder payouts towards regular...

We examine the impact of the social attachment through age similarity between the independent directors and the CEO on earnings management. Using changes in independent director composition due to director death and retirement for identification, we find that firms with the presence of the...

This paper challenges the stereotypical view that transient institutional investors, characterized by short-term horizons, exacerbate managerial myopia and harm corporate innovation. Our evidence implies that the results of previous studies may have been biased due to endogeneity issues. To...

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...

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 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...