We relate the firm legal structure to the degree of credit advantage of the headquarters. We argue that subsidiary-based firms are born as the outcome of a process of agglomeration around firms with better credit advantage. Therefore, subsidiary based firms have better credit advantage than...

This paper explores the spillover effects of Hurricane Katrina on corporate bonds through the liquidations of bond holdings by property and reinsurance companies exposed to the Katrina shock. We find that the sales of exposed property and reinsurance companies create a persistent negative price...

We show that the currency risk embedded in the benchmarks of international mutual funds negatively affects fund performance. More specifically, a high benchmark-implied currency risk induces funds to invest in markets with less volatile currencies, leading to a higher degree of currency...

We study outsourcing relationships among international asset management firms. We find that in companies that manage both outsourced and inhouse funds, inhouse funds outperform outsourced funds by 0.85% annually (57% of the expense ratio). We attribute this result to preferential treatment of...

We study international outsourcing in the asset management industry. We argue that subcontractor management companies use the funds they manage on behalf of third parties to subsidize their own inhouse funds. On average, inhouse funds outperform the outsourced funds by 7.5 basis points per...

We examine international bond issues by US firms to study the benefits of investor taste for cross-border security issuances. We proxy for firms' international investor taste with the fraction of prior international bond holding in firms' domestic and international bonds and find that...

We study the link between a firm's quality of governance and its alliance activity. We consider alliances as a commitment technology that helps a company CEO overcome agency problems that relate to the inability to ex-ante motivate division managers. We show that well-governed firms are more...

We study right offerings around the world, using a sample of 8,238 rights offers announced during 1995-2008 in 69 countries. Although shareholders prefer having the option to trade rights, issuers deliberately restrict tradability in 38% of the offerings. We argue that firms restrict rights...

We study how information about one firm transmits to otherwise unrelated firms sharing the same major blockholder. Using information on US firms over the 2001–2008 period, we show that the financial conditions of these firms signal the controlling ability of the owner and therefore indirectly...

We study how firms choose their debt maturity structure. We argue that because of lower information-gathering costs, institutional investors prefer to invest in firms with bonds outstanding across multiple maturities. We show that, in segmented markets, this preference for firms with bonds of...