We study the interplay between corporate liquidity and asset reallocation opportunities. Our model shows that financially distressed firms are acquired by liquid firms in their industries even when there are no operational synergies associated with the merger. We call these transactions...

We hypothesize that macro-level liquidity affects the choice between tender-mergers and mergers. We employ a novel methodology to test this relationship. This method finds structural breaks in the number of tender-mergers relative to mergers and finds that the structural breaks coincide...

We study the impact on industry liquidity of delistings resulting from leveraged buyout activity. Using data on U.S. LBOs during the 1985-2008 period, we uncover evidence of negative liquidity externalities. We find that the liquidity of firms in the same industry as the LBO target drops during...