The top management of corporations has a major influence on the investments and financing of the firms under their control. According to the economics-based principal-agent theory, managers will maximize their own utility, even at the expense of the shareholders and other stakeholders. The...

We analyze the importance of firm-specific and country-specific factors in the leverage choice of firms from 42 countries around the world. Our analysis yields two new results. First, we find that firm-specific determinants of leverage differ across countries, while prior studies implicitly...

We investigate how competitive behavior affects the capital structure of a firm. Theory predicts that the impact of different types of output market uncertainty (in particular, unanticipated shocks in demand and costs) on a firm's leverage depends on the type of competition in an industry. We...

We examine 865 acquisitions by Dutch industrial firms over the period 1993ndash;2004. Theoretical work based on principalndash;agent problems predicts that managers of exchange-listed corporations may pursue acquisitions even when these do not add value for the shareholders. Corporate governance...

The consequences of international accounting standards are likely to reach beyond the impact on financial statements. This paper demonstrates one of the economic implications of international standards. We focus on the impact of the IFRS regulation on preference shares (IAS 32) in the...

We examine fees on bonds issued by Japanese corporations during the 1994-2002 period. We relate fees to firms' membership of bank-led (financial) keiretsu. For the full sample of firms, we establish a positive relation between fees and risk factors. Over time, we find that fees have increased...

We examine the relationship between exchange-rate changes and stock returns for a sample of Dutch firms over 1994-1998. We find that over 50% of the firms are significantly exposed to exchange-rate risk. Furthermore, all firms with significant exchange-rate exposure benefit from a depreciation...

In this paper we present the results of an international survey among 313 CFOs on capital budgeting, cost of capital, capital structure, and corporate governance. We extend previous results of Graham and Harvey (2001) by broadening their sample internationally, by including corporate governance,...

Over recent years, a substantial fraction of U.S. convertible bond issues have been combined with a stock repurchase. This paper explores the motivations for these combined transactions. We argue that convertible debt issuers buy back their stock in order to facilitate short selling by...

This paper tests the static tradeoff theory against the pecking order theory. We focus on an important difference in prediction: the static tradeoff theory argues that a firm increases leverage until it reaches its target debt ratio, while the pecking order yields debt issuance until the debt...