This paper examines the historical question of whether treasury shares and newly issued shares are equivalent by considering their use in stock based M&A transactions. We quantify the differential market response to M&A announcements when bidders have sufficient currency in the form of cash or...

This paper tests for asymmetric information problems between the lead arranger and participants in a lending syndicate. One problem comes from adverse selection, whereby the lead has a private informational advantage over participants. A second problem comes from moral hazard, whereby the lead...

In this paper, we investigate the effect of accounting biases on firms' financing decisions and the role of accounting biases in endogenous information quality. We show that in industries with generally low-profit prospects, a downward-biased accounting system performs better than a neutral...

Opportunism, either governmental or private, may become a powerful deterrent against public-private project financing, especially considering the scale of the investment in infrastructure. The parties can however secure themselves against opportunism of the counter-party by assigning the...

Information problems and lack of collateral value should make R&D more susceptible to financing frictions than other investments, yet existing evidence on whether financing constraints limit R&D is decidedly mixed, particularly in studies of non-U.S. firms. We study a large sample of European...

We extend recent research on the links between political connections and financial reporting by examining the role of auditor choice. Our evidence that public firms with political connections are more likely to appoint a Big Four auditor supports the intuition that insiders in these firms are...

This study examines the extent to which individual demographic characteristics of owners influence capital structure decisions. Using the Federal Reserve's 2003 Survey of Small Business Finances, we estimate the joint effects of traditional capital structure determinants and manager age, gender,...

Macroeconomic fluctuations such as interest rate and exchange rate can be considered sources of good or bad “luck” for corporate performance. Incentive effects of performance-based compensation for management may be weakened or biased by macroeconomic influences depending on the ability of...

The aim of this paper is to propose an instrument for identification of R&D sub-optimal investments situations, by exploring the deeper informational dimensions of the R&D market valuation, commonly called "γ," in order to help investors and decision makers screening out signals of suboptimal...

In this paper we examine the role of the CFO in setting risk management strategy with respect to macroeconomic risk, in particular, and we consider the information requirements for setting a strategy that is consistent with corporate objectives. We argue that macroeconomic risk management...