We investigate determinants of foreign ownership in newly privatized firms. We analyze data on privatized Czech firms to address two related general questions. First, what characteristics distinguish transition firms that attract a foreign investor? Second, how do firm-specific characteristics...

Internal capital markets of diversified firms have been associated with inefficient allocation of investment funds across divisions, leading to value losses. Utilizing a sample of diversified firms that adopted or eliminated Economic Profit Plans (EPPs) between 1990 and 2009, we show that...

Using a sample of bank loans issued to U.S. firms from 2000-2009 we find that specific governance mechanisms determine a firm's cost of borrowing in syndicated credit agreements. Firms with governance mitigating agency risk between stakeholders, i.e. independent boards, strong shareholder...

We study the effect of social connections between divisional managers and CEO on the scale and success of innovation activities in U.S. diversified conglomerates. Divisional managers who previously worked or studied with CEO file a greater number of patents during their tenure at the segment....

Inefficiency of internal capital allocation is one of the sources of the observed diversification discount. We use a hand-collected sample of divisional managers in S&P500 industrial conglomerates and find that social connections among divisional managers are associated with capital allocation...

Suppliers socially connected to major customers with relation-specific investments have higher leverage ratios compared to unconnected suppliers. The presence of connections partially reduces supplier underleverage observed in supplier-customer relationships with relation-specific investments....

Existing finance theory predicts that managers of takeover targets will increase leverage to enhance managerial control which can, in turn, allow target managers to thwart a takeover attempt altogether. We find that targets significantly increase leverage, by not only issuing more debt, but also...