The purpose of this study is to establish empirical proxies for the economic viability of firms in financial distress and to ascertain their role in reorganization policy. The data suggest that firms with stronger pre-bankruptcy operating performance, higher pre-bankruptcy leverage, and higher...

The purpose of the present study is to investigate whether information can partly explain the price increases associated with the S&P 500 Index additions. We examine the earnings performance of newly added firms for the period after additions. Firms newly added to the S&P Index do not exhibit an...

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the terms of earnout contracts, i.e. the potential size of the earnout, the performance measure on which the contingent payment is based,...

Corporate spinoffs present a unique opportunity to analyze the choice of directors from a pool of potential candidates. We find that post-spinoff unit and remaining parent firms are more likely to select pre-spinoff parent directors who have: i) relevant industry expertise; and ii) pre-spinoff...

We document that firms whose compensation peers experience weak say on pay votes reduce CEO compensation following those votes. Reductions reflect proxy adviser concerns about peers' compensation contracts and are stronger when CEOs receive excess compensation, when they compete more closely...

We study 130 large asset downsizings in 1985-1994. We find that downsizings are most often accomplished by selling assets. The decision to downsize is negatively related to operating performance at both the firm and industry levels and is positively related to firm debt ratio and level of...

Using a sample of 224 Chapter 11 filings reported from 1985-1994, we relate operating and financial characteristics to the decision to reorganize in Chapter 11 and to measures of success following reorganization. We find that reorganization success is related to firm profitability measured as of...

Within diversified firms, the negative impact of leverage on investment is significantly greater for high q than for low q segments, and significantly greater for non-core than for core segments. This is consistent with the view that diversified firms allocate a disproportionate share of their...

We survey two generations of research on corporate governance systems around the world, concentrating on countries other than the United States. The first generation of international corporate governance research is patterned after the US reasearch that precedes it. These studies examine...

Using a sample of 44,288 firm-years over the period 1984-1997, we document an increase in both the incidence and the extent of global diversification over time. This trend does not, however, reflect a substitution of global for industrial diversification. We also find that global diversification...