The high-profile scandals of the late 1990s have transformed the corporate governance landscape and increased the oversight duties of independent directors. New mandates, such as the Sarbanes-Oxley Act of 2002, have had substantial effects on corporate boards. For one thing, they dramatically...

This paper presents evidence suggesting that CEO connections facilitate investments in corporate innovation. We find that firms with better-connected CEOs invest more in R&D and receive more and higher quality patents. Further tests suggest that this effect stems from two characteristics of...

We propose a measure of the advising capacity of corporate boards that focuses on the distribution of committee assignments. We then study the characteristics and impact of directors dedicated to providing strategic counsel to top management. We find that advisory directors possess professional...

Mergers in Japan have the dubious distinction of <italic>not</italic> creating wealth for shareholders of target firms, in sharp contrast to what occurs in much of the rest of the world. Using a sample of 91 mergers from 1982 through 2003 we document several distinctive features of the merger market in Japan:...

Dual-class share unifications have typically been argued to be beneficial for voting shareholders, who are usually compensated for the loss of their superior voting privileges. However, no covenants exist that make this compensation mandatory for voting shareholders. In this paper, we examine a...

Mergers in Japan have the dubious distinction of not creating wealth for shareholders of target firms, in sharp contrast to much of the rest of the world. Using a sample of 91 mergers from 1982 through 2003 we document several distinctive features of the merger market in Japan: mergers tend to...

We examine differences in financial leverage between parent and spun-off firms that emerge from corporate spin-offs. Our tests control for past financing choices and the costs of adjusting capital structure, factors that can obscure cross-sectional patterns among firms' target leverage ratios....

In this paper, we study the relation among market structure, trading costs, and competition in National Association of Securities Dealers Automated Quotations (NASDAQ). In particular, we address the following questions: Do NASDAQ dealers exercise market power and extract economic rents in...

The two main theories of capital structure-the tradeoff theory and the pecking order theory-have opposite predictions about the expected relationship between corporate leverage and profitability. According to the tradeoff theory, companies that earn higher profits will use more debt both to...