We develop a leverage-based alternative to traditional asset pricing models to investigate whether the book-to-market ratio acts as a proxy for risk. We argue that the book-to-market ratio should act as a proxy because of the expected relations between (1) financial risk and measures of capital...

This study examines the expectations that both small business firms and bankers have regarding the bank selection process. The purpose of the study is to determine whether or not bankers understand the needs of the small business customer. It is based on a nationwide survey of 115 small business...

We identify conditions of prior performance and pay-performance sensitivity under which an increase in incentives is associated with improved performance. We find that increasing sensitivity increases risk-adjusted performance in firms with poor prior performance, but has little impact on...