An extensive body of international business research examines how cross-country variations in legal institutions influence corporate finance practices. Building on this literature, as well as the literature on capital structure and product market interactions, we investigate the effect of an...

In this study, we use board reforms across countries as a natural experiment to examine the effect of governance on firm leverage. We find that board reforms are associated with a statistically significant 1 percentage point increase in leverage overall, and a 5 percentage point increase on...

An extensive body of debt structure research explores the coordination failure among creditors of taking heterogeneous debt. This paper, in contrast, provides empirical evidence for the positive role played by debt heterogeneity in reducing stakeholder-driven costs of high leverage. Using a...

Share repurchases have become persistent. Firms use cash flow as the primary source of capital to finance repeated share repurchases. This internal financing increases (decreases) retained earnings (paid-in-capital) in the capital structure and weakens the sensitivity of investment to cash flow....

We examine the importance of Big Four audits in reducing agency costs evident in corporate debt maturity worldwide. Analyzing a large sample of public firms from 42 countries reveals that the fraction of long-term debt in firms' capital structures rises with the presence of a Big Four auditor,...