This chapter discusses how applied researchers in corporate finance can address endogeneity concerns. We begin by reviewing the sources of endogeneity—omitted variables, simultaneity, and measurement error—and their implications for inference. We then discuss in detail a number of...

Focusing on former university classmates among corporate directors and U.S. congressmen, and the regression discontinuity design of close Congress elections from 2000 to 2008, we provide robust evidence of the causal impact of social-network based political connections on firm value. The value...

This chapter discusses how applied researchers in corporate finance can address endogeneity concerns. We begin by reviewing the sources of endogeneity - omitted variables, simultaneity, and measurement error - and their implications for inference. We then discuss in detail a number of...

We investigate the determinants of the capital structure of Brazilian companies between 2000 and 2009. We use a quantile regression model and compare its results with the ones provided by conventional models (least squares and fixed effects). We show that the effects of the capital structure...

Event studies often include cross-sectional regressions of announcement effects on exogenous variables. If the event is voluntary and investors are rational, then standard OLS and GLS estimators are inconsistent. Consistent ML estimators are constructed for a cross-sectional model of horizontal...

This paper examines the ex-dividend price and trading volume behaviour in the Greek stock market. The examined period spans over the period 2000-2004. We use both the standard event study methodology and the regression analysis in order to assess the ex-dividend stock price anomaly. We find that...

The study raises the question of the existence of size effect and, consequently, size premium of companies from emerging markets, exemplified by the Russian market. Lack of such studies on the Russian market, as well as a paucity of them on emerging markets on the whole prompted me to study this...

Changing economic environments, geopolitical instability, and the explosive growth of emerging markets, compounded by the recent turbulence in the world's capital markets, has posed new challenges for the study of asset pricing. The following study raises questions about the existence (lack of...

We study how the geographical distance between large debtholders and large shareholders affects firms' risk and risk-shifting incentives. We argue that greater distance reduces debtholders' ability to observe shareholder characteristics and increases their information asymmetry vis-à-vis...