We study the effect of systematic uncertainty on firms' precautionary saving motives. As systematic uncertainty changes firms' operational and investment policies, its implications on firm cash holdings remain unclear. Using a GARCH-model based methodology, we construct novel, forward-looking...

High expected inflation is known to have a negative impact on future real growth. We show that this effect is significantly more pronounced in durable relative to non-durable goods sectors of the economy. Consistent with this macroeconomic evidence, the equity returns of durable-goods-producing...

Constructing a comprehensive data set of financially distressed firms that restructured their debts from 2000-2014, we find that firms with financial institutions' debt-equity simultaneous holdings are more likely to restructure out of court than to file for bankruptcy. The effect is stronger...

If opportunistic acquirers can buy targets using overvalued shares, then there is an inefficiency in the merger and acquisition (M&A) market: The most overvalued rather than the highest-synergy bidder may buy the target. We quantify this inefficiency using a structural estimation approach. We...

Do informed shareholders who can influence corporate decisions improve governance? We demonstrate this may not be generally true in a model of takeovers. The model suggests that a shareholder's ability to collect information and trade ex post may cause him, ex ante, to support value-destroying...

We examine how labor power affects a firm's takeover exposure and merger gains. Using a regression discontinuity design that relies on “locally” exogenous variation in labor power generated by close-call union elections, we find that increased labor power significantly reduces a firm's...

How does firm-specific human capital shape workers’ career trajectories? We develop a model that allows workers to accumulate both portable and non-portable (firm-specific) human capital through their work experience and learn about their match quality with current employers over time. The...

Special Purpose Acquisition Companies (SPACs) have exploded in popularity in recent years. Their unique business model and structures beckon a comprehensive understanding of the incentives of SPAC sponsors and the implications of hidden information on the welfare of retail SPAC investors. This...