We model credit contracting and bidding in a first-price sealed-bid auction when bidder valuation and wealth are private information. An efficient separating equilibrium exists only if the wealth levels of both bidder types are sufficiently different. If not, high-valuation bidders signal by...

This paper examines the relation between cash-flow availability and investment spending in the Netherlands. In particular, we are interested whether managerial discretion and/or asymmetric information drive the positive relation between cash-flow and investment spending. This relation is...

This paper examines the relation between cash-flow availability and investment spending in the Netherlands. In particular, we are interested whether managerial discretion and/or asymmetric information drive the positive relation between cash-flow and investment spending. This relation is...

Using a panel of 1122 UK firms listed on the London Stock Exchange over the period of 1981 to 2009, endogenous switching regression models (SRM) incorporating a predicted corporate efficiency index are estimated in this paper in an effort to clarify the role of cash flow in examining the impact...

This paper studies the relationship between a financially constrained firm and a stronger opponent who is not cash-constrained when these firms repeatedly compete in a procurement context. We characterize and discuss the procurement agency's optimal strategy when faced with such asymmetric...

This paper studies the interaction between financially constrained and financially strong firms on a procurement market. It characterizes and discusses a procurement agency’s optimal response when faced with financially asymmetric firms. By considering a dynamic setting, both present and...

The paper develops a methodology for estimating the intra-day probability of informed trading for NYSE stocks, implied by the specialist’s quotes and depths. The time series pattern of our measure (PROBINF) in an intra-day analysis around earnings announcements is consistent with previous...

The 2007 global financial crisis led to a chaotic financial environment characterized by highly uncertain and volatile stock markets. This created additional uncertainty about the fundamental value of shares and potentially increased the benefit of inside information. In this paper, we use event...

Exploring a unique database on insider trading in Belgium, we investigate whether high-quality corporate communication contributes to reducing insider trading profitability and information asymmetry. Using disclosure scores of professional financial analysts as a proxy for communication quality,...

We investigate whether senior officers use accrual-based earnings management to meet voluntary earnings disclosure (i.e., management earnings forecasts) before selling or buying their own shares when they have private information. This study is the first to use the differences in timing of...