We examine the effects of organization capital — evident in management quality practices — on firms' implied cost of equity. We show that superior management practices decrease firms' cost of equity capital. This novel finding, robust to a battery of sensitivity analyses and to endogeneity...

Financial strategy is about how companies raise funds and manage them within their organizations. Corporate governance is relevant to both of these aspects, and an understanding of corporate governance is vital for an appreciation of corporate finance. This chapter from Corporate Financial...

This paper investigates the effect of investment opportunities, audit quality and debt maturity on the interest paid by all-equity firms. Debt holders are likely to charge higher interest to price-protect themselves because of the under-investment and asset substitution problems. All-equity...

This paper investigates whether financially constrained firms use costly audit signals to facilitate their access to external financing. We document that when facing higher financial constraints, firms pay higher audit fees and have their audit opinion reports completed sooner. The higher audit...

This paper provides a review, discussion, and analysis of research on the usefulness of corporate governance codes to U.S. firms based on the theories underlying corporate governance, anecdotal evidence, and practices. It reviews the concurrent corporate governance codes and theories in the U.S....

The paper investigates whether the presence and tenure of Private Equity (PE) investment in European companies improves their performance. Previous studies documented the unambiguous merit of a buyout during the 1980s and 1990s for listed firms in the US and UK markets. This study analyzes such...

The paper investigates the motives of activity (entry and exit) of Private Equity (PE) investors in European companies. Investment of a PE firm is not viewed unambiguously. First, it is claimed that PE investment is made for the sake of seeking shortterm gains by taking control and utilizing the...

The paper investigates the link between bank concentration and a country's buyout market. We perform a macro level analysis for 15 European countries during 1997-2007. We estimate the elasticity of the country i's buyout market to country i's concentration in the banking sector. Our major...

The paper investigates how Private Equity (PE) ownership influences out-performance of a high-growth firm, and whether it differs from the effect of two other important types of financial investors: banks and non-bank financial firms. We transform the levered return on equity into a unlevered...

The paper investigates whether the presence and tenure of Private Equity (PE) investment in European companies improves their performance. Previous studies documented the unambiguous merit of a buyout during the 1980s and 1990s for listed firms in the US and UK markets. This study analyzes such...