We propose a model in which an entrepreneur, seeking outside financing, sells a large equity share to an outside blockholder in order to signal his low propensity to extract private benefits. A conventional theoretical rationale for the presence of an outside blockholder is mitigation of the...

A detailed treatment of aggregation and capital heterogeneity substantially improves the performance of the investment CAPM. Firm-level predicted returns are constructed from firm-level accounting variables and aggregated to the portfolio level to match with portfolio-level stock returns....

We develop a dynamic tradeoff model to examine the importance of manager-shareholder conflicts in capital structure choice. Using panel data on leverage choices and the model's predictions for different statistical moments of leverage, we show that while refinancing costs help explain the...

This paper discusses stakeholder wealth maximization as the ultimate objective of Corporate Governance. This study investigates the role of CG in minimizing the total risk on the firm and maximizing the wealth. At the end, paper intends to examine possibility of CG as a sorting variable for...

I construct a novel measure of differences of opinion based on investor holdings data which isolates the type of disagreement that is theoretically predicted to affect prices when assets are bundled or unbundled. Empirically, using the setting of corporate spin-offs, I show that differences of...

By means of an international sample of cross-border mergers and acquisitions (M&As) involving firms with outstanding Eurobonds from the US, Europe, and other countries around the world, we show that bond performance around M&A announcements is sensitive to cross-country differences in creditor...

This paper investigates the cross-sectional and time series variation in the CDS-Bond basis, while untangling their ownership. On average the basis of private companies is 62bps higher than for comparable firms that are publicly traded. This positive difference results from a relatively less...

M&A deals in the US are done mostly at the domestic level. We examine the M&A performance of US acquirers during 1991-2014 based on the enhanced innovative capacity afforded by cross-border deals. We find that US firms engaging in cross-border M&A have superior innovative capacity, which results...