We analyse the effect of mean-reverting cash flows on the costs of shareholder-bondholder conflicts arising from partially debt-financed investments. In a partial equilibrium setting we find that such agency costs are significantly lower under mean-reverting (MR) dynamics, when compared to the...

In this research we show how institutional investors export their home country's culture and related investing preferences by affecting the managerial behaviour of the firms they invest in. Using data on international institutional holdings of investors from 62 countries into S&P 500 firms from...