We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This...

We identify important conflicts of interests among shareholders and examine their effects on corporate decisions. When a firm is considering an action that affects other firms in its shareholders' portfolios, shareholders with heterogeneous portfolios may disagree about whether to proceed. This...

We study large discrete decreases in CEO pay and compare them to CEO forced turnover. The determinants are similar, as are the performance improvements after the action. After the pay cut, the CEO pay-for-performance sensitivity is abnormally high, such that the CEO can restore his pay level by...

Within a cost-benefit framework, we hypothesize that independent institutions with long-term investments will specialize in monitoring and influencing efforts rather than trading. Other institutions will not monitor. Using acquisition decisions to reveal monitoring, we show that only...

In the context of large acquisitions, we provide evidence on whether firms have target capital structures. We examine how deviations from these targets affect how bidders choose to finance acquisitions and how they adjust their capital structure following the acquisitions. We show that when a...

This paper considers the impact of Regulation FD on firms' information environments and costs of capital. For NYSE/AMEX firms we find little evidence of a change in the cost of capital attributable to Regulation FD. For NASDAQ firms we find that Regulation FD increased firms' costs of capital by...

This paper investigates whether corporate political influence affects government investment decisions. We study the efficacy of the various forms of political influence, ranging from the relatively passive connections between firms and politicians, such as those based on politicians’ voting...

Using hand-collected data on divisional managers at the S&P 500 firms, we provide one of the first studies of their role in internal capital budgeting. Divisional managers with connections to the CEO receive more capital. Managers’ informal connections, such as social ties to the CEO, outweigh...

We study the effect of government assistance on bank risk taking. Using hand-collected data on bank applications for government investment funds, we investigate the effect of both application approvals and denials. To distinguish banks? risk taking behavior from changes in economic conditions,...

We show that acquisitions initiated during periods of high merger activity (“merger waves”) are accompanied by poorer quality of analysts' forecasts, greater uncertainty, and weaker CEO turnover-performance sensitivity. These conditions imply reduced monitoring and lower penalties for...