We examine why firms use nonlinear derivatives (e.g., options). Our results suggest that option characteristics in investment opportunities and debt, the payoff structure of incentive compensation, and free cash-flow agency problems influence the firm's choice. Investment opportunities,...

We examine international bank expansions, which are classified as banking (scale related) or nonbanking (complementary) moves into developed or developing markets. The market responds favorably to expansions through joint ventures by U.S. banks, and insignificantly to expansions through...