Using hand-collected data on divisional managers at the S&P 500 firms, we provide one of the first studies of their role in internal capital budgeting. Divisional managers with connections to the CEO receive more capital. Managers’ informal connections, such as social ties to the CEO, outweigh...

We study the effect of government assistance on bank risk taking. Using hand-collected data on bank applications for government investment funds, we investigate the effect of both application approvals and denials. To distinguish banks? risk taking behavior from changes in economic conditions,...

Using hand-collected data on divisional managers at conglomerates, we find that a change in industry surplus in one division generates large spillovers on managerial payoffs in other divisions of the same firm. These spillovers arise only within the boundaries of a conglomerate but not between...