Internal capital markets of diversified firms have been associated with inefficient allocation of investment funds across divisions, leading to value losses. Utilizing a sample of diversified firms that adopted or eliminated Economic Profit Plans (EPPs) between 1990 and 2009, we show that...

Non-U.S. firms have two options to converge toward U.S. capital market and legal regulations - to cross-list in the U.S. or to agree to be acquired by a U.S. bidder. We show that companies that have lower growth opportunities, are more capital intensive, and seek bonding benefits through...

We examine how the organizational structure for diversification decisions involving firms from different countries is affected by the institutional context of the target country. Our theoretical analysis suggests that as legal systems improve and information asymmetry is reduced, a transition...

Despite SEC and state-level resistance, and contrary to the trend pursued by other firms, many electric utilities have diversified into non-electric and unregulated businesses. Moreover, this failure to focus has been rewarded with higher firm values, again contrary to the discounts documented...

Significant increases in the level of target leverage have been previously documented, following unsuccessful takeover attempts. This increased leverage may signal managerial commitment to improved performance, suggesting that corporate performance and leverage should be positively related. If,...

Consistent with prior literature, we find that increases in target leverage have a positive impact on returns to target shareholders irrespective of the source of debt. Even so, financing with bank debt has a remarkably different impact. If a target firm's debt is primarily sourced from banks,...

This paper investigates the evolution of corporate governance and firm performance in emerging markets. It focuses on Czech ammunition manufacturer Sellier and Bellot (Samp;B) following voucher privatization in 1993. Exogenously imposed diffuse ownership, combined with legal, capital market, and...

There is scant empirical evidence on how the leverage of target firms affects gains to their shareholders, although there are several widely-cited economic theories offered in the literature. The limited available evidence shows that shareholders of targets with greater leverage experience...

Firms receiving shareholder proposals are 16% more likely to become a target of acquisition. Such companies earn approximately 7.2% lower acquisition returns compared to gains for targets with no proposals. Higher acquisition likelihood and lower target returns are primarily associated with...