On November 8, 2002, two new exchanges, OneChicago and NQLX, began trading single stock futures (SSFs) in U.S. We study how these exchanges choose the listed products, and we compare the trading volumes on the two exchanges. The selection process is consistent with the objective of maximizing...

This paper provides a link that integrates public finance and corporate finance. We analyze a world in which costly tax avoidance or evasion could occur. The class of solutions considered here involve changes in the tax system that economize on the deadweight costs of avoiding taxes and...

We examine a large sample of mergers involving earnout payments made by bidders to target shareholders. Our findings suggest that earnouts serve two non-mutually-exclusive functions: as risk reduction mechanisms against misvaluation of high asymmetric information targets, and as retention...

We investigate empirically the nature of Japanese executives' compensation contract. The principal issues examined are: the extent Japanese executives are rewarded for performance both in the short term and in the long term, the role of alternative governance and control mechanisms unique to...

The volume of acquisitions involving privately held firms has far surpassed that of publicly traded firms in recent years; yet this segment of the take-over market remains largely unexplored. In analysing the unique features of private target take-overs, we compare the mergers and acquisitions...

We model that firms endogenize the extent of information asymmetry by choosing the optimal level of direct communications with capital markets. We find that leaner firms with less slack (lower cash balance and higher long-term leverage) tend to have greater formal communications. We show that...

In comparison to the abundant evidence on CEOs' compensations, little is known about the compensation of other senior executives and on how the pay differential between CEO and other senior executives affects firm performance. We examine several potential explanations of the pay differential in...

A two-stage stock-financed merger occurs when an acquiring firm first issues shares, and then engages in a cash acquisition shortly afterward. Such deals allow us to test two important hypotheses derived from decoupling: by clienteles via segmentation and by time. The acquirer's value is...

We study whether dividend yield (DY) can predict aggregate stock returns while controlling for the effects of structural breaks in the parameters and bias induced by autocorrelation in the predictor variable. To do so we apply the Bai and Perron (BP) (1998, 2000) methodology to test for...

This study examines the relationship between the high-yield bonds market and the stock market and indicates that stock returns lead high-yield bond returns. Specifically, this study further shows that this lead–lag relationship is more solid during bear market periods since a downward trend in...