Cost stickiness measures the degree of suboptimal cost reduction in response to a decline in a firm's activity. This study examines the role of institutional monitoring in addressing the value-decreasing cost-stickiness problem exhibited in many firms. Using alternative proxies for institutional...

This paper examines whether global insurance mergers and acquisitions (M&As) create value for shareholders by conducting an event study of M&A transactions for the period 1990-2006. Insurance acquirers realized small positive cumulative average abnormal returns (CAARs), whereas targets realized...

We investigate the link between firm size and risk-taking among financial institutions during the period of 1998-2008 and make three contributions. First, size is positively correlated with risk-taking measures even when controlling for other observable firm characteristics. This is consistent...

Recent studies have debated the impact of investor protection law on corporate behavior and value. I exploit the staggered passage of state securities fraud statutes (“blue sky laws”) in the United States to estimate the causal effects of investor protection law on firm financing decisions...

A financial distress of company should be able anticipated smartly by its management to rerun the business without having any loss due to business failure. Thus, we need a model which could provide an early signal to company the probability of financial distress so that remedial efforts can be...

This paper examines the investment terms of SWFs in respect of control rights in investee firms. Having reviewed extensive evidence from the China Investment Corporation from 2007 to 2015, I show that this SWF takes significant equity in investees, but often in the form of non-controlling...

This paper examines how the structural form of a bank's compensation payment function may impact on incentive-compatibility conditions between the centre of the bank (principal) and managers in the bank (agents). If this payment function is asymmetrical, with bonuses paid only upon the...

Hedge funds and other private equity funds are aggressive monitors of corporate America. Their investment strategies are designed to squeeze agency costs and other inefficiencies out of under performing companies. Mutual funds and public pension funds, by contrast, have remained relentlessly...

The aim of this article is to review key issues connected with the structural aspects of the financial system and the resulting financial system models. The structure of the article derives directly from this aim and reflects its review character. First, the structure of the financial system and...

Prior evidence suggests that managers learn indirectly from stock prices, which contain private information impounded by informed investors' trades. However, stock price is an indirect aggregate signal, which is likely to be insufficient for managerial learning. I propose that managers seek out...