We analyze a unique dataset that separately reports research and development expenditures for a large panel of public and private firms. We establish new empirical facts about how equity ownership status relates to innovation strategy and then compare these facts to equilibrium outcomes...

We examine the role of placement agents in private investments in public equity (PIPE) deals of firms that went public via a reverse merger (RM). We find that reputable placement agents with greater expertise (expert agents) help RM firms to complete their PIPE deals in a smaller number of...

Does corporate governance structure matter for firm value? We develop a model in which the allocation of control rights between shareholders and managers (“governance structure”) affects managers' incentive to invest (strong governance tightens managerial freedom and weak governance loosens...

Existing studies show that common institutional ownership of multiple industry firms improves governance over management, because such common owners possess industry-wide information advantage and governance expertise. This paper studies whether creditors perceive common owners as allied...

One-size-fits-all recommendations are common in many contexts, including those with a widespread heterogeneity. We propose a model that rationalizes this phenomenon. An expert recommends publicly to two agents whether to adopt a policy. The expert is privately informed about agents' payoffs from...

Scholars and antitrust enforcers have raised concerns about anticompetitive effects that may arise when institutional investors hold substantial stakes in competing firms. Their concern rests on empirical evidence that such common concentrated ownership is associated with higher prices and lower...

We show that managerial learning from stock prices can lead to feedback loop vulnerability: liquidity-induced trading can impose a negative externality on the firm's investment decisions, inducing liquidity unconstrained investors to sell their stock holdings. Interestingly, overconfident...

This paper investigates whether private equity (PE)-backed acquirers have a “parenting advantage” in the mergers & acquisitions (M&A) market. We employ a sample of 788 PE-backed firms and a carefully matched control group of 6,652 non-PE backed peers, for which we observe the entire...

Prior studies show that creditors' simultaneous equity holding mitigates shareholder-creditor conflict. We show that a new type of conflict arises in syndicates with such dual holders, due to the heterogeneity across syndicate members' equity-to-loan positions. We find that loans with higher...