On September 11, 2001, terrorists launched a devastating attack against the United States using commercial airliners loaded with jet fuel as weapons. Using the multivariate regression model methodology, we investigate the reaction of airline stock prices to the attack. We test whether the market...

The paper shows that variables commonly used in takeover prediction models also help to explain the likelihood of several other restructuring events, including divestitures, bankruptcies and significant employee layoffs. This finding helps to explain the larger misclassification errors in...

This study assesses the validity of widespread criticisms of the large, quot;nationally recognizedquot; credit rating agencies (CRAs). The accounting scandals of 2000-2002, in particular the highly publicized failure of Enron in December, 2001, led many to question their competence and the value...

Using a broad socio-economic conception of capital markets agency relationships, this study analyzes an immportant economic transition in US economic history. It focuses on the institutional and informational changes that attended the reform of corporare governance and regulation in the railroad...

We use stock return data to investigate the effects of the First Executive (FE) failure on other life insurance firms. In contrast to previous studies, we explicitly test for the separate effects of individual (retail) and institutional customer responses. The announcement of an accounting...

We use a unique loan-level dataset to compare portfolio and securitized commercial real estate loans. The paper documents how the types of loans banks choose to hold in their portfolios differ substantially from the types of loans the same banks securitize. Banks tend to hold loans that are...

When foreign sovereigns default on their debt, creditors sometimes sue them. These creditors are sophisticated actors, and they sue even though courts can do little to force a sovereign to satisfy a judgment. Why do they sue? This Article argues that courts serve as information intermediaries...

We find that Credit Rating Agencies (CRAs) see through transitory shocks to credit risk that stem from transitory shocks to equity prices, while market-based measures of credit risk do not. For a given stock return, CRAs are significantly less likely to downgrade firms with transitory shocks...

This paper examines the impact of equity misvaluation on the predictive accuracy of bankruptcy models. We find that structural bankruptcy prediction models are not affected by misvaluation. However, for hazard models, forecasting accuracy for properly-valued firms is greater than for misvalued...

As a result of Solvency II, academics and practitioners anticipate further consolidation in the insurance industry as the new regulatory framework rewards well-diversified insurers with lower capital requirements and challenges smaller insurers to meet the (operational) regulatory requirements....