Institutional investors’ common blockholdings within an industry produce an information advantage, allowing them to differentiate between the industry-wide and firm-specific nature of bad news released by peer firms and avoiding selling on false spillover signals (i.e., “panic exit”),...

Recent anecdotal evidence suggests that high litigation risk may induce firms to cut dividends. By comparison, litigation can be an effective governance tool for shareholders to force firms to distribute cash. Therefore, it is unclear how litigation risk affects dividend payouts on average. To...

Using the extreme returns of firms in unrelated industries of institutional shareholders' portfolios as exogenous variations in institutional investor distraction (Kempf et al., 2017), we find a positive and significant relation between institutional shareholder distraction and stock price crash...

We highlight that the inalienable nature of human capital can crucially determine corporate payouts. Exploiting the staggered rejections of the inevitable disclosure doctrine (IDD) across 15 U.S. states as exogenous shocks that potentially increase the mobility of key talents, we find that...

Hart and Moore (1994) theoretically analyze how inalienable human capital affects debt contracting. We examine, empirically, how firms address the increased threat of losing inalienable human capital by choosing between private and public debt: Following the staggered rejection of the inevitable...