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作者：Lin, Chen; Ma, Yue; Xuan, Yuhai
作者单位：Harvard University; Chinese University of Hong Kong; Lingnan University
摘要：This article examines the impact of the divergence between corporate insiders' control rights and cash-flow rights on firms' external finance constraints via generalized method of moments estimation of an investment Euler equation. Using a large sample of U.S. firms during the 1994-2002 period, we find that the shadow value of external funds is significantly higher for companies with a wider insider control-ownership divergence, suggesting that companies whose corporate insiders have larger ex...
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作者：Ivashina, Victoria; Sun, Zheng
作者单位：Harvard University; National Bureau of Economic Research; University of California System; University of California Irvine
摘要：Between 2001 and 2007, annual institutional funding in highly leveraged loans went up from $32 billion to $426 billion, accounting for nearly 70% of the jump in total syndicated loan issuance over the same period. Did the inflow of institutional funding in the syndicated loan market lead to mispricing of credit? To understand this relation, we look at the institutional demand pressure defined as the number of days a loan remains in syndication. Using market-level and cross-sectional variation ...
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作者：Price, Richard; Roman, Francisco J.; Rountree, Brian
作者单位：Rice University; Texas Tech University System; Texas Tech University
摘要：This study examines the influence of Mexico's efforts to improve corporate governance on firm performance and transparency. We utilize compliance data from the Code of 'Best' Corporate Practices, disclosed annually by public firms in Mexico, as a measure of corporate governance strength. We document a significant increase in compliance over 2000-2004 indicating Mexican companies view non-compliance as costly. However, we find no association between the governance index and firm performance, no...
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作者：Kapadia, Nishad
作者单位：Rice University
摘要：This paper shows that exposure to aggregate distress risk is the underlying source of the premiums for the Fama-French size (SMB) and value (HML) factors. Using a unique data set of aggregate business failures of both private and public firms from 1926 to 1997, I build portfolios that track news about future firm failures. These tracking portfolios optimally hedge aggregate distress risk and earn a Capital Asset Pricing Model (CAPM) alpha of approximately -4% a year. Both HML and SMB predict c...
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作者：Liu, Yixin; Mauer, David C.
作者单位：University of Texas System; University of Texas Dallas; University System Of New Hampshire; University of New Hampshire
摘要：We examine the effect of chief executive officer (CEO) compensation incentives on corporate cash holdings and the value of cash to better understand how compensation incentives designed to enhance the alignment of manager and shareholder interests could influence stockholder-bondholder conflicts. We find a positive relation between CEO risk-taking (vega) incentives and cash holdings, and we find a negative relation between vega and the value of cash to shareholders. The negative effect of vega...
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作者：Faleye, Olubunmi; Hoitash, Rani; Hoitash, Udi
作者单位：Northeastern University; Bentley University
摘要：We study the effects of the intensity of board monitoring on directors' effectiveness in performing their monitoring and advising duties. We find that monitoring quality improves when a majority of independent directors serve on at least two of the three principal monitoring committees. These firms exhibit greater sensitivity of CEO turnover to firm performance, lower excess executive compensation, and reduced earnings management. The improvement in monitoring quality comes at the significant ...
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作者：Benmelech, Efraim; Bergman, Nittai K.
作者单位：Harvard University; Massachusetts Institute of Technology (MIT); National Bureau of Economic Research
摘要：We provide novel evidence linking the level of creditor protection provided by law to the degree of usage of technologically older, vintage capital in the airline industry. Using a panel of aircraft-level data around the world, we find that better creditor rights are associated with both aircraft of a younger vintage and newer technology, as well as firms with larger aircraft fleets. We propose that by mitigating financial shortfalls, enhanced legal protection of creditors facilitates the abil...
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作者：Lin, Chen; Officer, Micah S.; Zou, Hong
作者单位：Loyola Marymount University; Chinese University of Hong Kong; City University of Hong Kong
摘要：We examine the effect of directors' and officers' liability insurance (D&O insurance) on the outcomes of merger and acquisition (M&A) decisions. We find that acquirers whose executives have a higher level of D&O insurance coverage experience significantly lower announcement-period abnormal stock returns. Further analyses suggest that acquirers with a higher level of D&O insurance protection tend to pay higher acquisition premiums and their acquisitions appear to exhibit lower synergies. The ev...
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作者：Yang, Wei
作者单位：University of Rochester
摘要：Durable consumption growth is persistent and predicted by the price-dividend ratio. This provides strong and direct evidence for the existence of a highly persistent expected component. Durable consumption growth is left-skewed and exhibits time-varying volatility. I model durable consumption growth as containing a persistent expected component and driven by counter-cyclical volatility, nondurable consumption as a random walk, and dividend growth as exposed to the expected component of durable...
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作者：Campbell, T. Colin; Gallmeyer, Michael; Johnson, Shane A.; Rutherford, Jessica; Stanley, Brooke W.
作者单位：Texas A&M University System; Texas A&M University College Station; Mays Business School; University System of Ohio; Miami University; University of Virginia; Winthrop University
摘要：We show theoretically that optimism can lead a risk-averse Chief Executive Officer (CEO) to choose the first-best investment level that maximizes shareholder value. Optimism below (above) the interior optimum leads the CEO to underinvest (over-invest). Hence, if boards of directors act in the interests of shareholders, CEOs with relatively low or high optimism face a higher probability of forced turnover than moderately optimistic CEOs face. Using a large sample of turnovers, we find strong em...
