Showing 111 - 120 of 619
We explore a new mechanism through which investors take correlated shortcuts. Specifically, we exploit a regulatory provision governing firm classification into industries: A firm’s industry classification is determined by the segment that has the majority of sales. We find strong evidence...
Persistent link: https://www.econbiz.de/10010858776
This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder "voice" by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases...
Persistent link: https://www.econbiz.de/10010858777
This paper develops a theory of the opening and dynamic development of a futures market with competing exchanges. The optimal contract design involves a trade-o¤ between the hedging potential of a contract and it?s degree of substitution with competing contracts. As design costs go down slowly,...
Persistent link: https://www.econbiz.de/10010858778
This paper studies asset markets in which ambiguity averse investors face Knightian uncertainty about expected payoffs. The same investors, however, might wish to resolve their uncertainty, although not risk, by just purchasing information. In these markets, uninformed and, hence, ambiguity...
Persistent link: https://www.econbiz.de/10004997416
We study the relationship between liquid asset holding and the pattern of share ownership and control structures within the firm. We explore these issues using a data set of Belgian firms that is particularly well suited to studying the institutions of control oriented finance. The data include...
Persistent link: https://www.econbiz.de/10004997417
We study innovative industries subject to two risks. First, it is uncertain whether the innovation is strong or fragile. Second, it is difficult to monitor managers, which creates moral hazard and agency rents. As time goes by and profits are observed, beliefs about the industry are updated. As...
Persistent link: https://www.econbiz.de/10004997418
This paper analyses the incentives of the equityholders of a leveraged company to shut it down in a continuous time, stochastic environment. Keeping the firm as an ongoing concern has an option value but equity and debt holders value it differently. Equityholders decisions exhibit excessive...
Persistent link: https://www.econbiz.de/10005007827
In many long-term relationships, parties may be reluctant to reveal their private information in order to benefit from their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces another party to reveal private information. Our...
Persistent link: https://www.econbiz.de/10005007828
This paper studies the link between public trading and the activity of a firms large shareholder who can affect firm value. Public trading results in the formation of a stock price that is informative about the large shareholders activity. This increases the latters incentives to engage in value...
Persistent link: https://www.econbiz.de/10005007829
We provide a formal analysis of the notion that conglomerates are more ‘entrenched’ as they have ‘deeper pockets’. Using the financial contracting model of Bolton and Scharfstein (1990), we can isolate two effects that confirm this conjecture: the pooling of cash flows, which allows to...
Persistent link: https://www.econbiz.de/10005007830