In this paper we contribute to a line of literature that examines behavioral biases that impact important corporate decisions. Our paper builds on prior articles that examine heaping or rounding of EPS forecasts. Herrmann and Thomas (2005), Bamber, Hui and Yeung (2010) and Dechow and You (2012)...

Growing evidence suggests that managers select financial policies partially by mimicking the financial policies of peer firms. This paper documents that the use of these peer effects in capital structure choice is unique to firms operating in a weak external corporate governance environment....

We document that product market threats increase the use of leased capital. We use Chinese import penetration in an instrumental variables setting to address endogeneity concerns. The positive relation between product market threats and leases is larger for firms that are financially...

We explore the sources of gains in horizontal mergers by exploiting heterogeneity between the merging firms' geographic footprints. We calculate the geographic overlap between the bidder, target, and their rivals and customers to identify variation in the competitive impact of horizontal...

We exploit the adoption of U.S. state-level labor protection laws to study the effect of employment protection on corporate investment and growth. We find that, following the adoption of these laws, capital expenditures decrease, resulting in firms growing sales at a slower rate. Our findings...

This paper identifies seasonal firms and their peak seasons to provide empirical evidence on the approach these firms take to finance seasonal operations. The seasonal use of funds, which builds prior to seasonal revenue, is largely financed with transitory sources of credit, such as credit...

Cash holdings are significantly lower for firms with dispersed debt maturity, and this finding is robust to entropy balancing and allowing for the simultaneous selection of dispersion and cash holdings. The relation is strongest for firms with shorter debt maturity and firms that rely on...

We show that firms located in states where property crime is more prevalent have more uncertain earnings and higher financing costs. Specifically, firms located in states with higher property crime rates have more volatile and less persistent earnings as well as lower quality analysts' earnings...

We examine the relation between corporate social responsibility (CSR) and firm value using the takeover market as an experimental setting. Firms with extreme CSR policies experience a greater likelihood of takeover and lower wealth gains in takeovers relative to firms with moderate policies. Our...

We use several different identification strategies to investigate what determines variation in the composition of the financial assets that make up corporate cash reserves. The degree to which a firm invests its cash reserves in less liquid, longer-maturity securities that earn a higher yield is...