This research investigates the relationship between corporate block ownership and firm financial leverage. Corporate blockholders, which are nonfinancial firms who hold more than five percent equity in a target industrial firm, can affect the target firm's policies through their business...

We allow the preference of a political majority to determine boththe corporate governance structure and the division of profits betweenhuman and financial capital. In a democratic society where financialwealth is concentrated, a political majority may prefer to restraingovernance by dispersed...

We examine the impact of creditor control rights on corporate acquisitions. Nearly 75% of loan agreements include restrictions that limit borrower acquisition decisions throughout the life of the contract. Following a financial covenant violation, creditors use their bargaining power to tighten...

This paper analyzes the role of intermediation in the market for corporate control (mergers and acquisitions). I argue that given the decentralized nature of such market, financial intermediaries might help alleviating search frictions. A potential acquirer can search for acquisition targets...

An increasingly important external control mechanism affecting the governance of young and fast growing companies worldwide is the emergence of institutional and private equity investors, as equity owners. Institutional investors have the potential to influence management's activities directly...

Using 1320 European mergers and acquisitions (M&As) completed between 2003 and 2012, this paper investigates patterns of earnings management and the implications for non-cash acquisition premia considering both the form of payment and the target firm's listing status. The empirical evidence...

We examine whether governance matters for acquisitions. Acquisitions are frequently beneficial to the CEO of the acquiring firm, but can often be value-destructive to acquirer shareholders and other stakeholders such as employees. We find that corporate governance does not appear to influence...

We examine the incentive effects of private equity (PE) professionals' ownership in the funds they manage. In a simple model, we show that managers select less risky firms and use more debt financing the higher their ownership. We test these predictions for a sample of PE funds in Norway, where...

We compare how bond market access affects firms' investment decisions in the United States and the euro area. Having a bond rating enables US corporations to invest more and undertake more acquisitions. In contrast, in the euro area, bond ratings have no effect on investment decisions....

We compare how bond market access affects firms' investment decisions in the United States and the euro area. Having a bond rating enables US corporations to invest more and undertake more acquisitions. In contrast, in the euro area, bond ratings have no effect on investment decisions....