Using a large sample of bank loans issued to U.S. firms between 1990 and 2004, we find that lower takeover defenses (as proxied by the lower G-index of Gompers, Ishii, and Metrick 2003) significantly increase the cost of loans for a firm. Firms with lowest takeover defense (democracy) pay a 25%...

We establish a causal link between carbon emissions and shareholder value using the passage of the Regional Greenhouse Gas Initiative (RGGI) that imposed a cap-and-trade policy for carbon emission on electric utilities in several Northeastern and Mid-Atlantic states. The regulation was...

We introduce and estimate a model that leverages a system-wide approach to identify systemically important financial institutions. Our Debiased Lasso penalized Vector Auto-regressive (DLVAR) framework, based on formal Granger Causality tests for large multivariate time series, explicitly allows...

Following a severe currency crisis in 1998, the Brazilian economy switched from a fixed to a floating exchange rate regime in 1999. Brazilian firms that had accumulated foreign currency liabilities in the fixed exchange rate regime suddenly found themselves exposed to significant currency risk....

This paper examines whether the market underreacts to the negative information implicit in the SEO (seasoned equity offerings) announcements. While rational and mispricing theories both predict SEO's, in the aggregate, should earn low returns in the long run, they offer sharply different...

We undertake a broad-based study of the effect of managerial risk-taking incentives on corporate financial policies and show that CEOs' and CFOs' risk-taking incentives significantly influence their firms' financial policies. In particular, we find that CEOs' risk-decreasing (-increasing)...

Using data on over 6000 loans issued to US firms between 1990 and 2004, we find that lower takeover defenses (as proxied by lower G-index of Gompers, Ishii and Metrick (2003)) significantly increase the cost of bank loans for a firm. Firms with lowest takeover defense (democracy) pay 25% higher...

We show that the U.S. commercial banks have become increasingly similar in their risk exposure after the global financial crisis. Pairwise correlation in bank equity returns increased threefold after the enactment of annual stress tests under the Dodd-Frank Act (DFA). Non-financials and non-bank...

We find weak governance is a primary reason investors react negatively to the announcement of seasoned equity offerings (SEOs). Using a difference-in-differences approach, we find investors worry about non-productive use of SEO proceeds when external pressure for good governance lifts due to an...

After the introduction of a nationwide Unified Payment Interface (UPI) in 2016, India has become one of the world's leading economies for cashless transactions. We exploit the heterogeneity in the intensity of the adoption of digital payments across districts to show that the household income...