Prior research shows that Dodd-Frank Act's regulations on credit rating agencies (CRAs) increase rated firms' risk of rating downgrades, regardless of their credit quality (see Dimitrov, Palia and Tang (2015)). Our difference-in-differences estimates suggest that after Dodd-Frank, low-rated...

Agency theory - as applied to debates in corporate governance - rests on a myth of separated ownership and control. The true separation, however, is between ownership and ownership: ownership of shares by shareholders and ownership of assets by the corporation. Shareholders are not principals;...

Outliers represent a fundamental challenge in empirical finance research. We investigate whether the routine techniques used in finance research to identify and treat outliers are appropriate for the data structures we observe in practice. Specifically, we propose a multivariate identification...

We examine how creditor protection affects firms with different levels of owners' and managers' personal costs of bankruptcy. Theoretically, we show that firms with high personal costs of bankruptcy borrow and invest more under a more debtor-friendly management stay system, whereas firms with...

We study how employment protection laws (EPLs) affect corporate cash-holding decision. By exploiting within-country changes in EPLs across 20 OECD countries as a source of variation in labor adjustment costs, we show that following an increase in the stringency of EPLs, firms' cash holdings...

We provide evidence that managerial incentives to manipulate real activities can influence the effectiveness of fiscal policy. Increases in federal spending lead government-dependent firms to expand R&D investment whereas industry-peer firms contract. The net result is a reduction in...

We exploit pension funding relief enacted in 2012 to estimate the effects of a positive shock to internal liquidity on market prices and investment. Measuring unexpected increases in internal liquidity using a priori expected pension contributions disclosed under FAS132R, we report positive...

The city of Indore, a commercial hub of Madhya Pradesh province of India through a SPV, Atal Indore City Transport Service Ltd. (AICTSL), initiated the development of BRTS on a PPP (public-private partnership) model in 2007. It invited partnerships with private parties for bus operators,...

We explore a long standing prediction in the international business literature that managers' subjective perceptions of political risk – not just the level of risk – are important for how firms manage political risk. The importance attributed to political risk by corporate executives has...

We investigate the impact of IFRS adoption on merger premiums. Using a comprehensive database of M&A deals within the EU during 2000–2011 we examine the role of overall IFRS adoption, the differences between voluntary and mandatory adopters and the role of the target country's pre-IFRS...