Analyzing hand-collected data on the corporate subsidiary locations of all publicly listed firms in China, we find that “hometown firms,” firms headquartered in the hometown of the key political leaders of the province, set up more subsidiaries in their home provinces. This effect is...

Public firms are becoming increasingly interconnected through institutional investors' stock ownership, specifically through cross-ownership, in which an institutional investor has a significant stake in multiple firms in the same industry. When a firm seeks external financing for its investment...

Credit default swaps (CDSs) are an effective tool to trade credit risk, and they can improve the corporate information environment. We find that firms use more public debt and less bank debt when CDSs reference their debt start trading. The results are robust to the endogeneity of CDS trading....

We examine how executive equity risk-taking incentives affect firms' choice of debt structure. Using a longitudinal sample of U.S. firms, we document that when executive compensation is more sensitive to stock volatility (i.e., has higher vega), firms reduce their reliance on bank debt...

How political uncertainty affects the supply of value relevant information about a firm is an important but unresolved question. Using an emerging market setting where political leaders are expected to exert significant influence on economic activities, we examine the effect of political...

To enact a policy, a leader needs votes from committee members with heterogeneous opposition intensities. She sequentially offers transfers in exchange for votes. The transfers are either promises paid only if the policy is put to a vote or paid up front. With transfer promises, the leader buys...

This study presents a laboratory experiment of the first and second price sealed bid auctions with independent private values, where the distribution of bidder valuations may be unknown. In our experimental setting, in the first price auction, bids are lower in the presence of ambiguity. This...

Do governments in the emerging Asia and Pacific region independently set their corporate tax rates? The answer is no. This paper contributes to the growing empirical tax competition literature by (i) generating a predictable tax reaction function within the new tax competition framework...

We examine the role that the emotional and mental states of innovative workers have on firm value through the innovation channel. Analyzing a large inventor-level dataset, we find that sunshine-induced mood is positively associated with the economic value that inventors generate for their firms...