Corporate control theory suggests mergers and acquisitions protect shareholder value by allowing good managers to take control of the assets of bad managers. It therefore predicts (1) the acquisitions of poorly-managed targets by well-managed bidders will create more value than other...

This paper provides new information on the impact of the entry of foreign firms on a financial services industry by examining the Chinese insurance industry surrounding China's accession to the World Trade Organization (WTO). Our analysis reveals that insurers experienced significant growth in...

We explore whether life insurers use a unique reinsurance arrangement to manage their regulatory capital. Typical reinsurance arrangements allow insurers to reduce their regulatory capital by transferring liabilities, and the associated assets, to reinsurers. With modified coinsurance, insurers...

Insurers' principal function – underwriting – is to assess and price customer risk. Economic theory suggests that insurers should prioritize underwriting over investment as a source of income. We find that many U.S. non-life insurers conform to theory: they consistently earn high returns on...

We study the effects of using investment advisers on life insurers’ investment performance. Using a measure of investment performance that accounts for investment risk and regulatory constraints, we find that life insurers experience an economically and statistically significant increase in...