We investigate the impact of hedge fund activism on corporate transaction markets. We find that activism targets as well as firms exposed to hedge fund threats increase divestitures and receive more merger bids. On balance, they also make fewer acquisitions, but this effect is entirely due to...

This paper compares the success of venture capital investments in the United States and in Europe by analyzing individual venture-backed companies and the value generated within the stage financing process. We document that US venture capitalists generate significantly more value with their...

This paper shows that the pooling of financial resources in an internal capital market may magnify financial distress situations. This effect, which is closely related to the well-known debt overhang phenomenon, arises when there is a illiquidity in one part of the conglomerate, which then...

We investigate the role of industry specialization in horizontal cross-border mergers and acquisitions. We find that acquirers from more specialized industries in a country are more likely to buy foreign targets in countries that are less specialized in these same industries. The role of...

Firms will exert too little care due to a limited liability effect if damages are likely to exceed their equity. This is particularly important for environmental and product liability and motivates the current discussion about mandatory insurance and extending liability to creditors. We model...

We analyze the economic consequences of financing with utility tokens that give access to consumption utility and are traded on a secondary market. Projects can be financed by selling equity or tokens. In a baseline analysis, efficient projects prefer equity, while inefficient projects prefer...