This paper develops a real options model of capital structure to understand two distinct roles played by intellectual capital in corporate financing decisions. First, intellectual capital limits a firm's debt capacity because of its low liquidation value. Second, intellectual capital enhances a...

Using both the summary and detailed financial analysts earnings forecasts data from I/B/E/S, we study the role of financial analysts in the most recent Internet stock bubble. We examined the change of financial analysts' earnings forecasts around the Internet crash in April 2000. The empirical...

Using a sample of 611 innovation news announcements made by US biotech firms during 1983-1992, this article finds positive abnormal returns and trading volumes during the announcement period. In contrast with most other studies on long-run stock performance, a long-run negative drift in the...

This paper investigates the interaction among a firm's knowledge capital, growth opportunities, earning dynamics, and optimal leverage level. Under the corporate taxation and personal taxation framework, by assuming that knowledge capital positively affects the realization of a firm's growth...

We use a novel panel with detailed transaction records of more than one million de-identified individuals to study the effect of a large-scale Chinese government-issued digital coupon program on consumer spending. At the core of this stimulus program are a set of salient features that drive the...

High-tech firms are built much more on the intellectual capital of key personnel than on physical assets, and firms built around the best scientists are most likely to be successful in commercializing breakthrough technologies. As a result, such firms are expected to have higher market values...

Does a firm's corporate governance practice affect its market value? Are shareholders in China willing to pay a premium for good governance standard? How is the premium compared with that in other emerging markets? The paper examines these important corporate governance issues in China. We...

This paper hypothesizes that the threat of losing listing status in China's distressed ST (special treatment) firms initiates a corporate control market that does not exist otherwise. The incumbent controlling shareholder, facing the possibility of losing control right, is forced to 'tunnel...

We use a simple information-based model of corporate investment to determine when investment will be sensitive to cash flow. The key cross-sectional prediction of the model is that investment-cash flow sensitivity will be stronger for firms with more informative stock prices, higher cash flow...

This paper examines seven instances in which the market value of a parent company was less than the market value of its holdings of a publicly traded subsidiary. Efforts are made to explain this quot;parent company puzzlequot; in terms of taxes, agency costs, liquidy effects and noise trader...