Debt capacity creates financial flexibility and collateral-based debt capacity is the least sensitive to cash flow shocks. Using variation in real estate prices as exogenous shocks to corporate financing capacity, we investigate the causal effects of financial flexibility on firms' cash...

Building on two sources of exogenous shocks to analyst coverage – broker closures and mergers, we explore the causal effects of analyst coverage on mitigating managerial expropriation of outside shareholders. We find that as a firm experiences an exogenous decrease in analyst coverage,...

Building on two sources of exogenous shocks to analyst coverage (broker closures and mergers), we explore the causal effects of analyst coverage on mitigating managerial expropriation of outside shareholders. We find that as a firm experiences an exogenous decrease in analyst coverage,...

“Everybody talks about financial innovation, but (almost) nobody empirically tests hypotheses about it” Frame and White (2004).The financial turmoil from 2007 onwards has spurred renewed debates on the “bright” and “dark” sides of financial innovation. Using bank-, industry- and...

“Everybody talks about financial innovation, but (almost) nobody empirically tests hypotheses about it”. Frame and White (2004)The financial turmoil from 2007 onwards has spurred renewed debates on the “bright” and “dark” sides of financial innovation. Using bank-, industry- and...

This study uses two distinct quasi-natural experiments to examine the effect of institutional shareholders on corporate social responsibility (CSR). We first find that an exogenous increase in institutional holding caused by Russell Index reconstitutions improves portfolio firms' CSR...

We investigate the effect of information asymmetry on corporate tax avoidance. Using a difference-in-differences matching estimator to assess the effects of changes in analyst coverage caused by broker closures and mergers, we find that firms avoid tax more aggressively after a reduction in...

We use import tariff reductions as a natural experiment to explore how trade liberalization causally affects the tax avoidance activities of U.S. firms. Using a Difference-in-Differences matching estimator approach, we find a significant increase in tax avoidance following tariff reductions. The...

This paper investigates the monitoring effect of institutional investors on portfolio firms' audit quality. We identify an exogenous discontinuity in institutional ownership around the Russell index threshold to overcome the endogeniety concerns. We find that an exogenous increase in a firm's...

This paper studies how globalization affects corporate tax planning strategies of U.S. manufacturing firms. Using U.S. granting China Permanent Normal Trade Relations (PNTR) as a quasi-natural experiment, we find a significant increase in tax avoidance for firms facing higher exposure to Chinese...