We examine the relation between employee protection legislation and corporate cash holdings. As wages become less elastic in a firm's production function, precautionary savings are expected to increase. We show that the staggered passage of legal exceptions to the “at-will” employment...

This paper examines financial interlocks between banks and industrial companies, and its relationship to earnings quality and the cost of debt. This issue is especially pertinent given the inherent conflict of interest present between banks and industrial firms, and their poorly understood...

By employing the theoretical template provided by agency theory, this paper contributes a detailed clinical analysis of a large multinational Canada-headquartered telecommunications company, Nortel. Our analysis reveals a 21st century norm of usual suspects: a CEO whose compensation is well...

This paper examines the relationship between firm complexity and board of director composition. Utilizing the board typology of Baysinger and Zardkoohi (1986), we classify board members either as insiders, business experts, support specialists, or community influentials, and examine it in...

Prior research has failed to document a consistent association between oil prices and stock prices. We propose and examine whether that failure is due to the need to link oil price changes to firm-level changes in earnings and investments. We find that the impact of oil prices on a firm's...

Although prior work indicates that insider purchases signal undervaluation, there is scant evidence about what specific information such purchases convey, or what determines the extent of the undervaluation. Our theory explains the nature of the information conveyed by insider purchases, their...

In this paper we empirically evaluate the widespread belief of managers that income smoothing results into lower stock market risk. Multivariate regressions confirm that a negative relation exists between discretionary income smoothing and idiosyncratic volatility. Further analysis indicates...

The capitalization of research and development (Ramp;D) costs is a controversial accounting issue because of the contention that such capitalization is motivated by incentives to manipulate earnings. Based on a sample of Italian listed companies, this paper examines whether companies' decisions...

In the 2003 and 2004 proxy seasons the Securities Exchange Commission allowed shareholders' proposals to expense employee stock options to be voted upon at the annual meeting. We analyze the determinants of shareholders' votes for a sample of 107 firms. We hypothesize and find that votes for...