The trade-off theory of corporate cash holdings predicts that there is an optimal level of cash. We test the trade-off theory by investigating the relation between deviations from optimal cash holdings and the valuation of cash from a shareholder's perspective. We decompose corporate cash...

The coinsurance effect hypothesis predicts that firm diversification reduces financial constraints through imperfectly correlated cash flows among segments. We empirically test the hypothesis by studying the relation between coinsurance effect and bank lines of credit. We find that coinsurance...

We focus on an exogenous event that changes the cost of capital of a company – the addition of its stock to the S&P 500 index – and investigate how companies react to it by modifying their corporate financial and investment policies. This allows us to test capital structure theories in an...

This paper empirically tests the transaction cost theory of managerial ownership in the settings of seasoned equity offerings (SEOs) and repurchases. SEOs and repurchases result in changes of managerial ownership due to non-contracting reasons. We use a benchmark specification to obtain the...

The transaction cost theory of managerial ownership and firm value predicts that deviations from optimal managerial ownership reduce firm value. This paper empirically tests the transaction cost theory by studying the relation between deviations on either side of optimal CEO ownership and firm...

This paper studies the effect of firm diversification on the value of corporate cash holdings. We develop two hypotheses based on efficient internal capital market and agency problems. We find that the value of cash is lower in diversified firms than in single-segment firms, and that firm...

Using a multinomial logit model, this paper explains the initial destination choices of skilled-worker immigrants from four South Asian countries (India, Pakistan, Bangladesh, and Sri Lanka) who landed in Canada in 1992-2001, based on the micro data of Citizenship and Immigration Canada. We...

This paper considers returns policies under which consumers’ valuation depends on the refund amount they receive and the length of time they must wait after the item is returned. Consumers face an uncertain valuation before purchase, and the realization of that purchase's value occurs only...