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...

Since 2010 the German law allows for non-binding votes on management compensation by shareholders during the annual meeting. In a broad study covering all non-financial German Prime Standard firms we examine determinants affecting (i) the likelihood of a voting and (ii) the result of a vote. We...

Although often criticized for their inefficiency, director networks are observed in many economies of the world. This raises two questions: What is the empirical effect of director networks on firm performance and what are the determinants of director networks? We empirically examine both issues...

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...

We study recent developments on the ownership of listed German firms. Based on a large panel with 9,501 firm-year observations spanning the period 2006-2021, we document four key results: (i) holdings of institutional investors gain in importance in German listed equity, (ii) foreign investors,...

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...