Managers and controlling shareholders can extract wealth from firms in many different ways. We develop here a framework for analyzing different types of quot;tunnelingquot; transactions. We divide tunneling into three broad groups: cash flow, asset, and equity tunneling. We model each type of...

We provide the first systematic analysis of the role of reputation in limiting opportunistic behavior by venture capitalists towards four types of counterparties: entrepreneurs, investors, other VCs, and buyers of VC-backed startups. Using a hand-collected database of lawsuits, we document that...

We explore the potential for abuse of startup founders and other common stock shareholders by venture capitalists. We first analyze a set of 26 lawsuits involving venture capitalists and entrepreneurs. Our analysis of lawsuits reveals that VC-related litigation is almost always initiated by...

This paper examines the relation between the performance and valuations of publicly-traded subsidiaries in the United States and the ownership stake of their parent companies. Cross-sectional and time-series tests demonstrate that subsidiaries in which the parent owns a substantial minority...

We examine the effect of the Efficient Market Hypothesis (EMH) on the investment behavior of mutual fund managers. We show that managers who are more likely to be exposed to the ideas of EMH throughout their higher education are more “passive” than their unexposed peers: they are more likely...

This Online Appendix provides sample and methodology details and selected additional results for Barreto Parra, Atanasov, Whittle, Meurer, Luo, Zhang, and Black, The Effect of the COVID-19 Pandemic on the Elderly: Population Fatality Rates, COVID Mortality Percentage and Life Expectancy loss....

We examine a fund manager's alleged manipulation of platinum and palladium futures settlement prices. Using benchmarks from parallel electronic markets, we find that the manager's market-on-close trading causes significant settlement price artificiality. Defying predictions that competition...

Venture capital contracts give VCs enormous power over entrepreneurs and early equity investors of portfolio companies. A large literature examines how these contractual terms protect VCs against misbehavior by entrepreneurs. But what constrains misbehavior by VCs? We provide the first...

Using hand-collected proxy statement data, we examine the distribution of performance metrics used to calculate executive compensation in 86 US oil and gas firms. We find that the distribution of achieved–target differences is significantly discontinuous at zero over the 13-year period...

This paper develops a model that combines features of portfolio theory and corporate governance research. The model analyzes the problem of how large investors form optimal equity portfolios when the return on each investment depends on the size the investment. The optimal solution counterweighs...