I investigate whether restrictive loan covenants disrupt or improve firms' operating performance. Using an instrumental variables approach to address the endogenous relationship between covenant strictness and firms' efficiency, I find that stricter loan covenants lead to an increase in...

This paper studies how directors' reputational concerns affect board structure, corporate governance, and firm value. In our setting, directors affect their firms' governance, and governance, in turn, affects firms' demand for new directors. Whether the labor market rewards a...