Firms with greater shareholder rights have higher risk-shifting incentives. Such firms should have more concentrated loan syndicates to ensure more intensive monitoring. In the United States, the second generation antitakeover laws reduced the shareholder rights significantly. We find that loan...

We study the exposure of the US corporate bond returns to liquidity shocks of stocks and Treasury bonds over the period 1973 - 2007 in a regime - switching model. In one regime, liquidity shocks have mostly insignificant effects on bond prices, whereas in another regime, a rise in illiquidity...

This paper examines how external governance pressure provided by both the product market and the market for corporate control affects the type of debt that firms issue. Consistent with a governance mechanism substitution effect, we find that (i) an exogenous increase in governance pressure from...

We estimate the value of equity analyst research motivated by regulatory changes such as MIFID II, which unbundles equity research and trading functions. We find that changes in target prices (CTPs) of equity analysts even as early as 120 days before a rating change can accurately predict actual...

Why do firms go public? Despite the existence of many theories addressing this question, lack of data on private firms before they are public hampers our ability to test these theories. We circumvent this challenge by testing reverse predictions of going public theories using firms' decisions to...

We study the role of borrower accounting quality in debt contracting. Specifically, we examine how accounting quality affects the borrower's choice of private versus public debt market and how the design of debt contracts vary with accounting quality in the two markets. We find that accounting...

Using a novel information asymmetry index based on measures of adverse selection developed by the market microstructure literature, we test whether information asymmetry is an important determinant of capital structure decisions, as suggested by the pecking order theory. Our index relies...