Head-to-head competition hurts profitability, and firms can benefit from avoiding it. Our model argues that strict transparency requirements help public firms soften competition and studies how that affects innovation aimed at displacing rivals. We show that intermediately attractive innovation...

This paper argues that endogenizing how acquirers finance their cash bids is just as important for understanding bidding in takeovers as endogenizing acquirers' payment method choice. The paper shows that acquirers finance their cash bids with equity only if they lack access to competitive...

Skilled workers often have strong bargaining positions in compensation negotiations. This paper studies the implications for firm financing, workers' compensation structure, and turnover. There are three main insights. First, workers in strong bargaining positions demand equity-based...

We analyze whether growth firms should delay current investment to hoard cash in order to reduce dilution from external financing. This hoarding motive is the natural counterpart to saving cash as a precaution to help secure funding for future investment opportunities. However, the two motives...

We argue that stronger debt enforcement in bankruptcy can reduce indirect costs of financial distress: (i) by increasing the likelihood of restructuring outside bankruptcy and (ii) by improving the recovery rate of stakeholders, such as trade creditors, through explicit legal provisions....