We study the choice of disclosure and share repurchase strategies of informed managers using a model that captures how they differentially impact short and long-term stock value. We identify a partial disclosure equilibrium in which firms in the lowest value region neither disclose nor...

We examine the effects of parameter uncertainty and Bayesian learning on equilibrium asset prices when all the structural parameters of the aggregate consumption and dividend growth rate processes are unknown. With realistic calibration of a parsimonious set of prior parameters, the model...

The objective of this paper is to empirically estimate the confidence intervals and compare some important statistics with regard to the mean of normal population by considering variance as ‘nuisance parameter', in the sense of Khan (1969). The paper uses the method of constructing a...

We review the recent theoretical and empirical literature on debt covenants with a particular focus on how creditor governance after covenant violations can influence the borrower's corporate policies. From the theoretical literature, we identify the key trade-offs that help explain the observed...

We review the recent theoretical and empirical literature on debt covenants with a particular focus on how creditor governance after covenant violations can influence the borrower's corporate policies. From the theoretical literature, we identify the key trade-offs that help explain the observed...

In this paper, we develop a theory of industry-wide over capacity and optimism among rational investors based on the manipulation of investors' beliefs by insiders. We analyze a dynamic model of corporate fraud, where manipulation and consequent investment distortions occur in equilibrium....

Recent corporate governance reforms focus on board independence and encourage equity ownership by directors. We analyze the efficacy of these reforms in a model where both adverse selection and moral hazard are present at the level of the firm's management. Delegating governance to the board...

This paper examines the effects of incomplete information on dynamic investment and consumption in a general equilibrium model where shocks to capital are unobservable and there is structural or parameter uncertainty regarding the volatility of these shocks; i.e., the investment risk. In this...

We theoretically and empirically examine the role of the international takeover market in improving corporate governance standards across countries by curtailing dominant shareholder influence - globally, a principal source of agency risk. In our model, firms are privately informed of takeover...

Overinvestment in certain firms or sectors induced by corporate fraud, where informed insiders strategically manipulate outside investors' beliefs by exaggerating financial performance and economic prospects, has been endemic historically, and has recently attracted much attention. Building on...