While previous work suggests two competing explanations for the effect of labor market regulation on firms' demand for debt, our results reconcile both the “strategic use of debt” and “financial flexibility” view. Exploiting staggered changes to labor laws in 28 OECD countries, we find...

This paper explores an extensive novel panel-data set covering more than 4,000 listed firms in 16 European countries to study the effects of shareholder protection on ownership structure and firm performance. Recent research criticizes the existing law and finance literature using (i)...

We investigate the relation between state ownership and corporate investment. In a matched panel of 624 European firms, state ownership curtails firms' responsiveness to investment opportunities. With increasing government ownership, investment becomes more sensitive to internal funds when...

While previous work suggests two competing explanations for the effect of labor market regulation on firms' demand for debt, our results reconcile both the “strategic use of debt” and “financial flexibility” view. Exploiting staggered changes to labor laws in 28 OECD countries, we find...

Tax codes regularly create conflicts of interests between small and large shareholders with respect to the payout decision of firms. We use this fact to study (i) whether firm behavior reflects preferences of blockholders and (ii) the effectiveness of minority shareholder protection on...