Using a large representative sample of individual credit bureau records, we document that personal financial distress increases a married couple’s probability of divorce by 4%-8%. Foreclosures strongly affect marital dissolution, whereas Chapter 13 bankruptcies, which protect debtors from...

An increase in the cost of selling short should increase the bearish information content of short interest announcements by driving relatively uninformed short sellers out of the market. We extend the Diamond and Verrecchia (1987) model to include short selling against the box and test the...

We link consumer credit bureau data to data on household demographics and consumption choices. We show that financial stress not only changes how and where consumers shop, but it also affects the types and quality of food they buy. Consumers exhibit a dramatic shift toward purchasing cheap,...

We use a sample of 86 counties to examine the cross-sectional determinants of sovereign credit ratings. We find that the quality of a country's legal and political institutions plays a vital role in determining these ratings. A one-standard-deviation increase in our legal environment index...

We show that state corruption and political connections have strong effects on municipal bond sales and underwriting. Higher state corruption is associated with greater credit risk and higher bond yields. Corrupt states can eliminate the corruption yield penalty by purchasing credit...

We show that stock market liquidity is an important determinant of the cost of raising external capital. Using a large sample of seasoned equity offerings, we find that, ceteris paribus, investment banks' fees are significantly lower for firms with more liquid stock. We estimate that the...