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We find that a firm's tendency to engage in financial misconduct increases with the misconduct rates of neighboring firms. This appears to be caused by peer effects, rather than exogenous shocks like regional variation in enforcement. Effects are stronger among firms of comparable size, and...
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We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. It also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect...
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City level differences in industry-adjusted Tobin's q, an estimate of the value created for shareholders, are large, and have widened sharply over the last twenty years. Proxies for a city's appeal to high-skill workers, such as existing education rates and favorable weather, are strongly...
Persistent link: https://www.econbiz.de/10012898734
We find that a corrupt local environment amplifies the effects of financial distress. Following regional spikes in financial misconduct, credit becomes both more expensive and harder to obtain for nearby borrowers -- even those not implicated themselves. This is particularly harmful for...
Persistent link: https://www.econbiz.de/10012937666
Financial misconduct (FM) rates differ widely between major U.S. cities, up to a factor of three. Although spatial differences in enforcement and firm characteristics do not account for these patterns, city-level norms appear to be very important. For example, FM rates are strongly related to...
Persistent link: https://www.econbiz.de/10012938044
We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. It also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect...
Persistent link: https://www.econbiz.de/10013049693