We demonstrate a link between the twin storms underlying the current financial crisis - the market for collateralized debt obligations (CDOs) and the market for leveraged loans. We show that structural changes in credit markets that led to the explosion in CDOs created an increased supply of...

Using data on the backgrounds of board members of S&P companies, we show that venture capitalists (VCs) play an important role in mature public firms long after their initial public offering (IPO). Almost one-third of mature public companies have at least one VC director on their board. VC...

We present evidence that busy outside directors are associated with weak corporate governance based on a sample of U.S. industrial firms from 1989 to 1995. When a majority of outside directors serve on three or more boards, firms exhibit lower market-to-book ratios as well as weaker operating...

On September 30, 2018, California became the first U.S. state to set quotas for women directors on corporate boards. The passage of this law resulted in a significant decline in shareholder value for firms headquartered in California. The decline in shareholder value is directly related to the...

Exploiting exogenous variation introduced by a significant change in S&P's methodology, we show that credit ratings have a first-order causal impact on capital structure and investment decisions. Quantifying debt capacity within a firm's credit rating (Ratings Capacity) using precise metrics, we...

Shareholder value creation from hedge fund activism occurs primarily by influencing takeover outcomes for targeted firms. Controlling for selection decisions, activist interventions substantially increase the probability of a takeover offer. Third-party bids for targets have higher returns,...

Hedge fund activists target firms engaging in empire building and improve their future acquisition and divestiture strategy. Following intervention, activist targets make fewer acquisitions but obtain substantially higher returns by avoiding large and diversifying deals and refraining from...

Using a sample of IPOs from 1994 to 2004, we show that newly public firms make acquisitions at a torrid pace. This acquisition activity is fueled not only through the initial IPO proceeds, but also through the creation of an acquisition currency that is used to raise capital for both cash and...

We analyze why firms use non-intermediated short-term debt by studying the commercial paper (CP) market. Using a comprehensive database of CP issuers and issuance activity, we show that firms use CP to provide start-up financing for capital investment. Firms' CP issuance activity is driven by a...

We study the relation between firms? banking relations, ownership structures, and q ratios in Japan. At low levels of equity ownership by main banks, firms? q ratios fall as bank equity ownership rises. At higher levels of bank equity ownership, this relationship is mitigated and, in some...