-
作者：Feng, Felix Zhiyu; Westerfield, Mark M.
作者单位：University of Washington; University of Washington Seattle
摘要：We study a firm's internal resource allocation using a dynamic principal-agent model with endogenous cash flow volatility. The principal supplies the agent with resources for productive use, but the agent has private control over both project volatility and resource intensity and may misallocate resources to obtain private benefits. The optimal contract can yield either overly risky or overly prudent project selection. It can be implemented with a constant pricing schedule (i.e., a static, dec...
-
作者：Ersahin, Nuri; Irani, Rustom M.; Le, Hanh
作者单位：Michigan State University; Michigan State University's Broad College of Business; University of Illinois System; University of Illinois Urbana-Champaign; University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital
摘要：We examine the within-firm resource allocation and restructuring outcomes at firms violating debt covenants. Using establishment-level data from the US Census Bureau, we find that covenant violations are followed by reductions in employment, investment, and more frequent establishment closures among violating firms' noncore business lines and less productive establishments. These changes are concentrated among establishments at which manager-shareholder agency costs are pronounced and when key...
-
作者：Bolton, Patrick; Kacperczyk, Marcin
作者单位：Columbia University; Imperial College London; Centre for Economic Policy Research - UK; National Bureau of Economic Research
摘要：We study whether carbon emissions affect the cross-section of US stock returns. We find that stocks of firms with higher total carbon dioxide emissions (and changes in emissions) earn higher returns, controlling for size, book-to-market, and other return predictors. We cannot explain this carbon premium through differences in unexpected profitability or other known risk factors. We also find that institutional investors implement exclusionary screening based on direct emission intensity (the r...
-
作者：Xu, Yongxin; Xuan, Yuhao; Zheng, Gaoping
作者单位：Monash University; Southwestern University of Finance & Economics - China; Royal Melbourne Institute of Technology (RMIT)
摘要：In 2010, Google unexpectedly withdrew its searching business from China, reducing investors' ability to find information online. The stock price crash risk for firms searched for more via Google before its withdrawal subsequently increases by 19%, suggesting that Internet searching facilitates investors' information processing. The sensitivity of stock returns to negative Internet posts also rises by 36%. The increase in crash risk is more pronounced when firms are more likely to hide adverse ...
-
作者：Chen, Jiakai; Kim, Joon Ho; Rhee, S. Ghon
作者单位：University of Hawaii System; University of Hawaii Manoa
摘要：We examine how search frictions affect merger outcomes. Exploiting firm connections in common bank networks (CBNs) as a channel for reducing search costs, we show that like-buys-like mergers are more probable between firms connected through a CBN. This effect is amplified if the connection has been recently formed or the network contains many plausible choices for merger partners. CBN-facilitated mergers exhibit higher synergy and lower post-merger cost of debt. We confirm that CBNs reduce sea...
-
作者：Gospodinov, Nikolay; Robotti, Cesare
作者单位：Federal Reserve System - USA; Federal Reserve Bank - Atlanta; University of Warwick
摘要：Intermediary and downside risk asset pricing theories lay the foundations for spanning the multi-asset return space by a small number of risk factors. Recent studies show strong empirical support for such factors across major asset classes. We revisit these results and show that robust evidence for common factor pricing remains elusive. Importantly, the proposed risk factors do not seem to provide incremental information to the traditional market factor. We argue that most of the economic and ...
-
作者：Wang, Zigan; Yin, Qie Ellie; Yu, Luping
作者单位：University of Hong Kong; Hong Kong Baptist University; Xiamen University
摘要：We use staggered share repurchases legalization from 1985 to 2010 across the world to examine its impact on corporate behaviors. We find that share-repurchasing firms do not cut dividends as a substitution. The cash for repurchasing shares comes more from internal cash than external debt issuance, leading to reductions in capital expenditures and R&D expenses. While this strategy boosts stock prices, it results in lower long-run Tobin's Q, profitability, growth, and innovation, accompanied by ...
-
作者：Rouen, Ethan; So, Eric C.; Wang, Charles C. Y.
作者单位：Harvard University; Massachusetts Institute of Technology (MIT)
摘要：Using a novel dataset, we show that components of firms' GAAP earnings stemming from ancillary business activities or transitory shocks are significant in frequency and magnitude. These components have grown over time and are dispersed across various sections of the 10-K. Excluding them from GAAP earnings yields a core earnings measure that distinguishes between the recurring and non-recurring components of net income and forecasts future performance. Analysts and market participants are slow ...
-
作者：Denbee, Edward; Julliard, Christian; Li, Ye; Yuan, Kathy
作者单位：Bank of England; University of London; London School Economics & Political Science; Center for Economic & Policy Research (CEPR); University System of Ohio; Ohio State University
摘要：Using a structural model, we estimate the liquidity multiplier of an interbank network and banks' contributions to systemic risk. To provide payment services, banks hold reserves. Their equilibrium holdings can be strategic complements or substitutes. The former arises when payment velocity and multiplier are high. The latter prevails when the opportunity cost of liquidity is large, incentivising banks to borrow neighbors' reserves instead of holding their own. Consequently, the network can am...
-
作者：Li, Frank Weikai; Mukherjee, Abhiroop; Sen, Rik
作者单位：Singapore Management University; Hong Kong University of Science & Technology; University of New South Wales Sydney
摘要：We identify the broker each corporate insider trades through, and find that analysts and mutual fund managers affiliated with such inside brokers have a substantial information advantage on the insider's firm. Affiliated analysts issue more accurate earnings forecasts, and affiliated mutual funds trade the insider's stock more profitably than their peers, fol-lowing insider trades through their brokerage. Notably, this advantage persists well after these insider trades are publicly disclosed. ...
