We examine the relation between corporate diversification, real earnings management, and firm value. Our analysis indicates that industrial diversification and the combination of industrial and global diversification exacerbate real activities manipulation, whereas global diversification...

Starting in 2007, Sovereign Wealth Funds (SWFs) from Asia and the Middle East have invested billions of dollars in major U.S. financial firms. The primary driving force behind their growth is rising commodity prices, in particular oil. Given that SWFs represent a relatively new, cash-rich...

In this article, we assess the stock price performance of 184 firms emerging from Chapter 11 bankruptcy between 1980 and 2006. We find their mean post-bankruptcy performance to be similar to the performance of their size and-book-to-market control firms, as well as to the performance of their...

Entrepreneurship is not only used to create a business idea, but also to restructure a business in response to environmental conditions. Firms that issue equity after emerging from bankruptcy are unique in that they exhibit less asymmetric information than other firms that issue equity. They...

While studies have documented that Initial Public Offering (IPO) aftermarket performance is weak, little is known about how the aftermarket performance is affected by takeovers of the newly public firms. We find that the aftermarket performance of IPOs is more favourable for those newly public...

In a competitive market for takeover bids, the takeover premium serves as an effective proxy for the expected synergy. We find that the expected synergy is primarily related to the premiums paid in other recent takeovers in the same industry. This relation is even stronger when considering...

We investigate the informational role of the takeover premium as a forward looking price to expected synergies in the global market for corporate control. We find that premiums paid in the global market for corporate control are clustered in waves and driven to some extent by the US premium....

The accounting fraud of Enron and other firms prompted acquirers to be more diligent before investing in companies. The fraud also led to the creation of the Sarbanes-Oxley Act (SOX), which contains provisions that require more due diligence for firms that pursue mergers. We document significant...