Activists and journalists argue that allocation of greater control rights to shareholders mitigates the classic agency problem in corporations. I show that the effectiveness of such control rights depends on the cost of acquiring information on a firm. These rights have a positive effect on firm...

We study capital allocations to managers with two mutual funds, and show that investors learn about managers from their performance records. Flows into a fund are predicted by the manager's performance in his other fund, especially when he outperforms and when signals from the other fund are...

We present a model that shows that strong shareholder rights have a greater impact on value for firms that operate in less opaque information environments. We model shareholder rights as an option at the disposal of shareholders to stop projects chosen by a manager, and show that the value of...

Using the staggered introduction of fast-track debt recovery courts in India, we estimate the causal effect of a reduction in debt contract enforcement costs on financing and asset maturity. A reduction in enforcement costs is associated with an increase in long-term debt and a decrease in...

We derive the first closed-form optimal refinancing rule for mortgages: Refinance when the current mortgage interest rate falls below the original mortgage interest rate by at least (1/ψ)[φ W(-exp(-φ))], where W(.) is the principal branch of the Lambert W-function, ψ=((√(2(ρ λ)))/σ),...

Higher sales tax in the home country relative to a neighboring country creates a huge incentive for consumers who live closer to the border to purchase goods across the border. Using a unique panel dataset of consumer financial transactions, we find that, when facing higher domestic sales tax,...

We study private firms' strategic disclosure of financial statements in shaping bank lending decisions and structuring debt contracts in informationally opaque credit markets. Using a unique dataset of loan applications by small businesses to a large bank, we document that the availability of...

We study local employment, establishment density, and establishment size across industries delivering final consumption, which comprise a substantial fraction of production, shape local amenities, and pay different wages. In a stylized model of consumer mobility, lower industry...

This paper shows how liquidity infusions affect loan modification in the mortgage market. The design of pooling and servicing agreements leads mortgage servicers to prefer foreclosure over modification when they are liquidity constrained. Therefore, a positive liquidity shock is expected to...