We examine whether differences in investment opportunities and corporate ownership structure can explain the disparate findings of other researchers regarding the market's price reaction to the announcement of international joint ventures. We study a sample of 320 such ventures from the period...

Management controls the issuing and repurchasing of securities, but they have no direct control over leverage changes stemming from changes in stock price or from profits and losses. By separating managed from unmanaged changes in leverage ratios, we draw three basic conclusions: 1) management...

This paper reviews the theoretical foundations of residual income as a tool for evaluating a firm's interim performance for purposes of assigning incentive compensation. Although residual income can be easily linked to the discounted cash flow model of firm valuation, it bears no necessary...

Enron plummeted from the 7th largest US firm and six-time winner of Fortune's most innovative firm award to bankruptcy in less than one year. However, management used financial engineering and related-party transactions to disguise Enron's financial condition for over three years. These...

We test the effectiveness of internal corporate governance systems by examining the replacement of founder CEOs at poor performing firms. Managerial entrenchment in these firms is expected to constrain the effectiveness of external corporate governance through the market for corporate control....

In this paper I review the role of securitization in the credit markets and in particular the possible contribution of securitization to the credit crisis of 2007-2008. Based on this review I make the following observations: (i) over the last three decades the originate-to-distribute via...

In this note I lay out an argument supporting the integration of some elements of the corporate social responsibility movement under the goal of maximizing shareholder value. Specifically, this involves honoring the non-contractual promises made by the firm to its customers, suppliers,...

We investigate share price responses to announcements of 93 business alliances using minority equity purchases to bond the agreements. On average, selling firms realize significant increases in share value while buying firms garner neutral share price responses. Analysis of financial performance...