This study develops an empirical proxy for the quality of segment reporting from data in corporate annual reports, and provides evidence that financial markets price the quality of segment reporting as systematic (non-diversifiable) risk. Lower segment information quality is associated with...

We present a competitive model of takeovers among heterogeneous firms. Each firm owns a tradeable "project" and non-tradeable "skill". The complementarity between them generates takeovers. We construct an equilibrium with two segmented markets. In one market, firms pay a fee to an intermediary...

The sharp distinction drawn between firms rated narrowly above (BBB-) and below (BB+) the investment-grade cutoff provides variation in debt financing availability unrelated to firm fundamentals. We exploit this market segmentation to identify an asymmetric effect of debt capital supply on...