We analyze the link between creditor rights and firms' investment policies, proposing that stronger creditor rights in bankruptcy reduce corporate risk-taking. In cross-country analysis, we find that stronger creditor rights induce greater propensity of firms to engage in diversifying...

We propose an explanation for the quot;disappearing dividendquot; phenomenon: the decline in the information content of dividend announcements. This reduces the propensity of firms to pay or increase dividends, since dividends are costly. The decline in the information content of dividend, is...

New tests are presented on the effects of stock illiquidity on stock return. Over time, expected market illiquidity positively affects ex ante stock excess return (usually called acirc;not;Srisk premiumacirc;not;?). This complements the positive cross-sectional return-illiquidity relationship. The...

This paper examines the effects of cross-border bank mergers on the risk and (abnormal) returns of acquiring banks. We find that overall, the acquirers risk neither increases nor decreases. In particular, on average neither their total risk nor their systematic risk falls relative to banks in...

This paper examines the value effects of improvements in the trading mechanism. Stocks on the Tel Aviv Stock Exchange were transferred gradually from a daily call auction to a mechanism where the call auction was followed by iterated continuous trading sessions. This event was associated with a...

We provide an economic basis for permitting freezeouts of non-tendering shareholdersfollowing successful takeovers. We describe a specific freezeout mechanism based on easily verifiable information that induces desirable efficiency and welfareproperties in models of both corporations with widely...

This paper examines the effects of cross border bank mergers on the risk and (abnormal)returns of acquiring banks. We find that overall, the acquirers risk neither increases nor decreases. In particular, on average neither their total risk nor their systematic risk fallsrelative to banks in...

We propose an explanation for the acirc;not;Sdisappearing dividendacirc;not;? phenomenon: the decline in the information content of dividend announcements. It reduces the propensity of firms to pay or increase dividends, since dividends are costly. A reason for the decline in the information...

New tests are presented on the effects of stock illiquidity on stock return. Over time, expected market illiquidity positively affects ex ante stock excess return (usually called acirc;not;Srisk premiumacirc;not;?). This complements the positive cross-sectional return-illiquidity relationship. The...

We propose a new hypothesis testing method for multi-predictor regressions with finite samples, where the dependent variable is regressed on lagged variables that are autoregressive. It is based on the augmented regression method (ARM; Amihud and Hurvich(2004)), which produces reduced-bias...