Staleness in measured prices imparts a positive statistical bias and a negative dilution effect on mutual fund performance. First, evaluating performance with nonsynchronous data generates a spurious component of alpha. Second, stale prices create arbitrage opportunities for high-frequency...

Previous theoretical and empirical studies suggest that CEOs' political connections are valuable to firms. We examine whether such connections become constraints if the expected political capital fails to materialize and the firm lacks other type of political power in place. Using a sample of...

We examine the effect of debt financing capacity on firm innovation by employing a shock that increases firms' asset pledgeability. We find that firms increase innovation activities after the shock, and the increase is greater in regions with more effective enforcement and in firms with more...

We examine cross-border private equity (PE) sponsored leveraged buyout (LBO) transactions in 43 countries in relation to creditor rights and other legal and institutional variables. Cross-border LBO investment is more common from strong creditor rights countries to weak creditor rights...

Both theory and empirical evidence suggest that managers' career concerns can serve as an important source of implicit economic incentives. We examine how incentives for political promotion are related to compensation policy and firm performance in Chinese state-owned enterprises (SOEs). We find...

This paper empirically examines how real estate risk impacts corporate investment and financing decisions. Using a panel of United States firms from 1985 to 2013, we document that real estate risk is negatively associated with firms' long-term investments and long-term external financing in...

This paper examines the impact of investor protection on the value creation of LBOs. We find that target shareholders' wealth gain is higher in countries with better investor protection. The impact of investor protection on takeover premium is larger for LBO than non-LBO transactions. We also...

This paper examines the relation between legal conditions and leveraged buyouts (LBOs) in 49 countries. The data indicate that sophisticated PE fund managers carrying out large international LBOs can only partially mitigate costs associated with inefficient legal protections. LBOs are more...

This paper investigates whether anticipation of adverse events can trigger silent runs in mutual funds. We define a mutual-fund silent run as a situation in which investors redeem shares in anticipation of an adverse event. The adverse event in question is the litigations filed in 2003 and 2004...

This paper is the first one to document that anticipation of adverse events can trigger runs in mutual funds. Using the event of the 2003 and 2004 litigations filed in the U.S. over market-timing and late-trading practices, we find that runs start as early as six months before litigation...