Employee treatment is a dilemma for many business owners and executives: while everyone prefers a pleasant working environment, satisfying employee needs can be costly to shareholders. Given such costs, is it still worthwhile to make employees happy on a daily basis? This study provides evidence...

We examine the effects of mandatory ESG disclosure around the world using a novel dataset. Mandatory ESG disclosure increases the availability and quality of ESG reporting, especially among firms with low ESG performance. Mandatory ESG reporting has in turn beneficial effects on firm’s...

This study empirically examines the impact of the interaction between market and default risk on corporate credit spreads. Using credit default swap (CDS) spreads, we find that average credit spreads decrease in GDP growth rate, but increase in GDP growth volatility and jump risk in the equity...

We provide direct evidence of selective default on government debt when creditors can be identified. Using unique loan-level data, we find that local governments in China choose to default on banks that have weaker political power, as those banks have little influence over local politicians'...

The rise of credit default swaps (CDS) provides creditors with a market-based approach to obtaining protection, but it can also affect lenders' monitoring of the borrowers. We find that after CDS begin trading on a given firm, new loans to that firm are less likely to require collateral and have...

Analyzing 916 CDOs, we find that a top credit rating agency frequently made positive adjustments beyond its main model that amounted to 12.1% larger AAA tranche sizes. These adjustments are difficult to explain by likely determinants, but exhibit a clear pattern: CDOs with smaller model-implied...