In this study we analyze the effect of information asymmetry on corporate cash holdings. Using various measures of information asymmetry, we show that companies that operate in higher information asymmetry environments have smaller cash holdings. We continue to find a negative relation between...

This paper studies an infinite horizon adverse selection model with an underlying two-state Markov decision process. It introduces a novel approach that constructs the continuation payoff frontier exactly, as the fixed point of a functional operator. If the model supports an incentive compatible...

This study identifies a new economic benefit of common institutional ownership, which refers to the increasingly contentious phenomenon of U.S. firms sharing stockholders with their industry competitors. We find a significantly negative relation between common ownership and insider trading...