This paper examines reasons for alliance formation between private equity bidders when compared to sole-sponsored private equity deals. Testing a comprehensive set of hypotheses, we find strong evidence for the relative-risk hypothesis of Robinson (2008), as private bidders are more likely to...

We analyze the impact of the bank CEO’s pay-risk sensitivity (‘vega’) on four loan contract terms, loan spreads, existence of collateral, and the number and strictness of covenants. Using a bank-level fixed effects model to control for time-invariant bank characteristics, we find that...

This paper investigates the influence of external cost shock on the speed of adjustment (SOA) toward target capital structure. To look at the impact of an exogenous shock on the speed of adjustment, we employ mandatory contributions (MCs) of defined benefit (DB) pension plans as a measure of the...

We document that product market threats increase the use of leased capital. We use Chinese import penetration in an instrumental variables setting to address endogeneity concerns. The positive relation between product market threats and leases is larger for firms that are financially...

In this paper, we investigate whether product market threats have a significant impact on firms' tax avoidance. By adopting the market fluidity measure introduced in Hoberg, Phillips, and Prahbala (2014) as a proxy for product market threats, we find that product market threats increase the...