We study the effects of corruption on the capital structures of firms in 72 countries. Using the Corruption Perception Index, we show that corruption increases the costs of debt and equity. Interestingly, as the level of corruption decreases, these costs become more sensitive to changes in...

We hypothesize that if the cultural characteristics of a region are important, then firms located in Protestant and Catholic-majority counties within the U.S. will have different attitude towards leverage. We find that a one percent increase in a county's Protestant religiosity leads to a 0.4%...

We investigate the relationship between the firms' cash holdings and public health risks. We find that in comparison to firms whose employees can work remotely, firms with more on-site employees increase cash during the H1N1 pandemic. This increase in cash is larger for firms that are more...

An important debate in corporate finance is whether CEOs exploit equity mispricing. In this article I construct a measure of the unexplained change in the CEO's stockholdings of the firm to empirically test the contrasting predictions of market timing, catering and classical theories of...

We hypothesize that macro-level liquidity affects the choice between tender-mergers and mergers. We employ a novel methodology to test this relationship. This method finds structural breaks in the number of tender-mergers relative to mergers and finds that the structural breaks coincide...

This study investigates what features of large US banks could have made them susceptible to a systemic crisis. Employing both market and accounting data we isolate four factors. The first is the long-term trend in rates of return (on equity or assets) which was negative for about a decade...

A large fraction of acquisitions occur between unrelated firms-acquisitions that are neither horizontal nor vertical. Unrelated acquirers have high levels of information asymmetry, have a higher cost of capital, are more financially constrained, and use more stock in their acquisitions....

The idea of "Too Many to Fail" (hereafter TMTF) is that -- even if the large banks are healthy -- small and medium sized banks can cause a banking crisis if enough of them fail simultaneously. Therefore, it has been argued, containing the risks of "Too Big to Fail" banks (hereafter TBTF) does...