We compare investment policies across public and private firms in different institutional settings. Using a large cross-country dataset, we find that public listed firms are better positioned to take advantage of growth opportunities than private firms. Specifically, public listed firms exhibit...

We investigate the Dead Hand Proxy Put, a contractual innovation in corporate debt agreements that may impact hedge fund activism. We find the provision principally in loans, not bonds, and provide evidence linking adoption of the provision to hedge fund activism. Further, controlling for...

We find that the strength of countries' legal institutions can explain the ability of private firms to identify and terminate poorly performing managers. This finding is consistent with our hypothesis that governance problems in private firms are ameliorated by strong institutions that reduce...

We examine motives to sell private firms and provide insights into the sources of value creation from acquisitions of private targets. Using a novel dataset, we document that less profitable, highly leveraged private firms that tend to underinvest are likely to be sold. Further, these firms...

We examine motives to sell private firms and provide insights into the sources of value creation from acquisitions of private targets. Using a novel dataset, we document that less profitable, highly leveraged private firms that tend to underinvest are likely to be sold. Further, these firms...

We study the impact of Dead Hand Proxy Puts on shareholder value. Courts and commentators have characterized these terms as defenses against hedge fund activism that threaten to reduce firm value by entrenching underperforming managers and thereby increasing managerial agency costs. Our findings...

Are restrictive covenants effective mechanisms in mitigating agency problems? Is the magnitude of the increase in the cost of debt due to agency problems non-trivial? We tackle these questions using a large dataset of public bonds. Contrary to the view that covenants in public bond contracts are...

Asset sales have been found to create significant abnormal returns of 0.5% - 1.5% on equity values. Several theories have been suggested to explain this result. Originally, the abnormal returns were attributed to efficient redistribution of assets. Later papers suggested that asset sales created...

Better legal protection of investors in a country is a central theme of international corporate governance research. However, investor protections can be derived not only from legal rights provided by countries' laws but also from rights attached to individual securities at the issuer's...