We extend the literature on the effects of managerial entrenchment to consider how safety-net subsidies and financial distress costs interact with managerial incentives to influence capital structure in U.S. commercial banking. Using cross-sectional data on publicly traded, highest-level U.S....

Corruption decreases liquidity available to institutional traders and discourages foreign portfolio investment inflows into a country. Corruption also increases corporations' cost of equity capital. The effects of corruption on foreign investment and the cost of equity capital are nonlinear and...

This paper develops a new measure of the cost of capital, the empirical average cost of capital (EACC), which is consistent with existing methods of calculating the weighted average cost of capital but primarily uses information from the firm's financial statements and requires fewer and less...

The issues in today's crisis – and indeed in the most important crises, historically – can best be understood as a manifestation of asymmetric information in an environment of rapid financial innovation. The present paper reviews the asymmetric information and financial innovation frameworks...

Financial innovation is inextricably tied to asymmetric information and therefore sets the stage for financial crises. Over history, every truly meaningful crisis has had elements of asymmetric information, particularly affecting innovative financial instruments that are primary market...