We analyze how the introduction of repurchases in 1998, and a major tax reform in 2001, affected the payout policy of German firms. To this end, we estimate Lintner (1956) partial adjustment models for both dividends and total payouts. We also analyze the implications for payout of changes in...

Using a unique panel data set of private German firms over the period 2002 to 2013 we analyze the relation between managerial overconfidence and investment policy in small and medium-sized firms. We construct direct estimates of managerial overconfidence that are based on sales forecasts. We...

M&A rumors cause anxiety, distraction, and reduced employee morale due to the implicit threat of job loss. Using an international sample of M&A rumors that do not materialize, we show that firm productivity temporarily declines after rumors surface. This productivity dip is more pronounced for...

This paper uses a new perspective to analyze information obtained from capital structure decisions. Most previous studies either separately tested how firms adjust to leverage targets, or observed how financial policy changes convey information such as balance sheet items. However, we analyze...

We analyze the impact of expected (targeted) capital structure decisions on information asymmetries. We measure information asymmetry from equity liquidity through the use of an information asymmetry index that is based on six measures that capture trading activity, trading costs, and the price...