We examine corporate product diversification as a dynamic process. Consistent with prior research, we find that the average diversification discount is about 8% when using the standard value-multiple approach. However, we find that a significant portion of the diversification discount arises...

We study whether cross-country differences in regulations have affected international bank flows. We find strong evidence that banks have transferred funds to markets with fewer regulations. This form of regulatory arbitrage suggests there may be a destructive “race to the bottom” in global...

Corporate managers often invest in activities that are deemed to be socially responsible. In some instances, these investments enhance shareholder value. However, in other cases, altruistic managers or managers who privately benefit from the positive attention arising from these activities may...

We investigate the factors influencing international bank flows from 26 source countries to 120 recipient countries over the past two decades and consider the implications of these flows. Controlling for other factors, we find that the bank flows are positively related to the quality of...

We examine the global geography and pricing of the syndicated loan market using a sample of more than 13,000 loan packages issued to 4,713 firms headquartered across 10 countries during the 1998 to 2004 sample period. Our results provide insights into the relative importance of information...

This paper examines the evolution of risk in the U.S. financial sector using firm-level equity market data from 1975 to 2005. We find that over the past three decades, financial sector volatility has steadily increased, particularly from 1998 to 2002. Increased volatility, driven by common...

We examine how analysts establish target prices for IPO firms and whether comparable firms used to support target prices are helpful in explaining IPO offer prices. From 1996 to 2000, the average target price is set at a level more than twice the offer price that was established less than a...

Using detailed information on the debt structure of 250 publicly traded U.S. firms over the 1980-93 period, we find that the sensitivity of investment to internally generated funds increases with a firm's reliance on bank financing. Bank-dependent firms also hold larger stocks of liquid assets...

Do federal bank examinations add value to the market's supervisory process? To address this question, we investigate whether Federal Reserve inspections of bank holding companies have affected the association between banks' reported book values and the market value of their equity. Using data...

This paper considers the extent to which loan commitments mitigate the problem of information monopolies that arise when the firm contracts with a private lender. Loan commitments in conjunction with short-term debt often provide the firm with superior investment incentives by influencing both...