We test whether rare and extreme changes in financing policies --- switching to (from) debt financing --- has real implications on shareholder value conditional on institutional quality. Using a large firm-level dataset from 53 countries over the period 1981---2019, we find that switching to...

Using a large sample of 17,747 firms from 44 countries, we find significant positive peer effects on corporate investment. Specifically, a firm increases its investments by 2% to 6% in response to a one standard deviation increase in peer firms' investments. Further analyses show significant...