We provide evidence that religiosity deters unethical corporate behavior. Firms headquartered in highly religious counties are less likely to backdate options, grant excessive compensation packages to their managers, practice aggressive earnings management, and be the target of class action...

This paper presents empirical evidence that the recent rise in idiosyncratic risk is driven by the increasing propensity of firms to issue public equity at an earlier stage in their life cycle. We find that the age of the typical firm at its IPO date has fallen dramatically from nearly 40 years...

This paper shows that, contrary to existing evidence, corporate managers cannot successfully time the maturity of their debt issues to reduce their cost of capital. Our results indicate that the negative correlation between future excess long-term bond returns and the ratio of long-term debt...

This paper presents empirical evidence that stock market liquidity is an important determinant of the cost of raising external capital. Because the role of an investment banking syndicate in a public security offering is analogous to that of a block trader, investment banks should charge lower...

This paper shows that stock market liquidity is an important determinant of the cost of raising external capital. Using 2,387 seasoned equity offerings (SEOs) from 1993-2000, we find that, after controlling for other factors, investment banks charge lower fees to firms with more liquid stocks....

This paper presents empirical evidence that fluctuations in idiosyncratic risk are largely driven by the age characteristics of the firms composing the market. Consistent with previous studies, we find that the age of the typical firm at its IPO date has fallen dramatically from nearly 40 years...

We run a horse race between two competing hypotheses about the relationship between market returns and managers' decisions to issue or retire equity: that managers are successfully forecasting (timing) subsequent market returns versus reacting to prior market returns. Our empirical framework...

In this short note we respond to the argument advanced by Baker, Taliaferro, and Wurgler (2006) that our criticism of the market timing literature is simply a reinterpretation of Stambaugh's (1999) small sample bias. We show analytically how structural breaks in an economic time-series may...

This paper provides a rational explanation for the apparent ability of managers to successfully time the maturity of their debt issues. We show that a structural break in excess bond returns during the early 1980s generates a spurious correlation between the fraction of long-term debt in total...

Capital expenditures by the top 100 firms make up more than 60% of aggregate investment by publicly traded firms, and explain most of the variation in aggregate net fixed private non-residential investment. Surprisingly, these firms have the highest investment-cash flow sensitivity in the...