We study the political economy of financial regulation by examining the determinants and effects of U.S. state usury laws during the 18th and 19th centuries. We argue that regulation is the outcome of private interests using the coercive power of the state to extract rents from other groups. We...

We study whether firms tend to make the compensation of their managers dependent on the relative level of valuation. We consider compensation in the sample period between 1992 and 2003 and show that an increase in company valuation leads to an increase in the pay-for-performance sensitivity....

We investigate institutional investors' trading behavior of acquiring firm stocks surrounding merger activities for the period 1992 to 2001. We label investment companies and independent investment advisors as active institutions and banks, nonbank trusts and insurance companies as passive...

We identify a specific channel (debt covenants) and the corresponding mechanism (transfer of control rights) through which financing frictions impact corporate investment. Using a regression discontinuity design, we show that capital investment declines sharply following a financial covenant...

This paper investigates whether leveraged buyouts (LBOs) increase the bargaining power of firms with their suppliers. We find that suppliers to LBO firms experience significantly negative abnormal returns at the announcements of downstream LBOs. We also find that suppliers who have likely made...

In countries with a weak legal system and a high level of corruption it has been shown that political connections are valuable to a corporation. This paper explores whether political connections are also important in the U.S., which has well-developed financial markets as well as a strong legal...

Seasoned common stock sales executed through accelerated underwitings have dramatically increased global market share recently. Block trades, bought deals and accelerated bookbuilt offerings have raised over $750 billion since 1998, and now account for over half of U.S. seasoned equity offerings...

During five weeks over March and April 2000, internet stocks declined 58%. Almost $700 billion in capitalization was lost. This sudden collapse has been attributed to an increase in the supply of shares from lock-up expirations and equity offerings. In this paper, I show that internet stocks...

We provide empirical evidence supporting the view that a sharp rise in a firm's default likelihood causes a change in its shareholder clientele: mutual funds decrease their holdings of the firm's share, trading volume and cost increase, and the order imbalance measure indicates large selling...

We do three things in this paper. We first develop a metric to measure the popularity of the value-weighted portfolio in a stock market. We use our metric to document that, though the value-weighted portfolio is less popular in emerging markets than in developed markets, its popularity is...