We examine the relation between the CEO's childhood socioeconomic class and corporate labor policies. We find that CEOs raised in low socioeconomic class families are less likely to invest in employee friendly firm policies measured by several types of labor and employment litigation, including...

Informal risk sharing within social networks and formal financial contracts both enable households to manage risk. We find that financial contracting reduces participation in social networks. Specifically, increased crop insurance usage decreased local religious adherence and congregation...

This study examines implications for mergers and acquisitions (M&As) by focusing on deals that are subsequently divested. A comprehensive data set on the corporate divorce phenomenon during the past quarter of a century is constructed with financial news as well as SEC filings. Using this...

Large shareholders may play an important role for firm performance and policies, but identifying this empirically presents a challenge due to the endogeneity of ownership structures. We develop and test an empirical framework which allows us to separate selection from treatment effects of large...

We show that firm valuations fell after a key expense became more visible in financial statements. FAS 123-R required firms to deduct option compensation costs from earnings, instead of disclosing them only in footnotes. Firms that granted high option pay experienced a significant earnings...

We find significant persistence in various investment and financing policies. This persistence survives even the split-up of a firm through a spin-off transaction. We find that spin-off firms choose policies that are more similar to those of their parent firms than to those of their own matched...

This paper examines the role that advertising plays in the mutual fund industry and whether advertising affects investors' fund and portfolio choices. Content analysis shows that only a small fraction of fund advertising is directly informative about characteristics relevant for rational...

Analyzing a large panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers' pay. CEOs with more control pay their workers more, but financial incentives through ownership of cash flow rights mitigate such behavior. These findings do not seem to...

We develop and test a nested logit model to examine how firms choose between a rights offering and a private equity placement. We find that family-controlled firms avoid issue methods that dilute control benefits or subject them to more monitoring, in particular when the family's control margin...