The likelihood of seasoned equity offerings (SEOs) jumps discontinuously when the stock price equals the most recent equity offer price. Anchoring on the last offer price holds after considering executive turnovers, stock splits, earnings management, or dividend adjustments. Using a fuzzy...

We develop a new method to estimate Tobin's qs of conglomerate divisions without relying on standalone firms. Divisional qs differ considerably from qs of standalone firms and, consistent with theories of corporate diversification, are less volatile and less sensitive to macroeconomic shocks. In...

We study the effect of the recent financial crisis on corporate investment. The crisis represents an unexplored negative shock to the supply of external finance for non-financial firms. Corporate investment declines significantly following the onset of the crisis, controlling for firm fixed...

This paper studies the relation between corporate liquidity and diversification. The key finding is that multi-division firms hold significantly less cash than standalone firms because they are diversified in their investment opportunities. Lower cross-divisional correlations in investment...

Disagreement is a key factor inducing trading, which has been receiving ever-increasing attention in recent years. Most research has focused on disagreement about the expected returns. Several authors have shown that if the average belief coincides with the true expected return in the portfolio...

Using daily fluctuations in local sunshine as an instrument for sentiment, we study its effect on day-to-day decisions of lower-level financial officers. Positive sentiment is associated with higher credit approvals, and negative sentiment has the opposite effect of a larger magnitude. These...

Existing evidence shows that risk aversion and trust are largely determined by environmental factors. We test whether one such factor is peer influence. Using random assignment of MBA students to peer groups and predetermined survey responses of economic attitudes, we find causal evidence of...

Atanasov and Black (2015) (AB) analyzes potential limitations of empirical studies that use shock-based IV designs, focusing specifically on our article that studies the effect of board independence on firm value (Duchin et al., 2010). With regard to our study, AB raises three concerns with our...

Using hand-collected data on financial asset portfolios, we investigate corporate risk-taking through risky financial investments. We find that distressed firms with large short-term liabilities substantially increase their investments in risky financial assets, including corporate debt, equity,...

Using individual census records, we provide novel evidence on CEOs' socioeconomic backgrounds and study their role in investment decisions. Male CEOs allocate more investment capital to male than female division managers. This gender gap is driven by CEOs who grew up in male-dominated families...