This paper examines the growth of electronic communication networks (ECNs) and their impact on the liquidity of Nasdaq stocks. I find that the recent growth of trading through ECNs has resulted in tighter bid-ask spreads, greater depths, and less concentrated markets. Overall, our results...

This paper presents empirical evidence that cash-flow volatility is negatively valued by investors. The magnitude of the effect is substantial with a 1% increase in cash-flow volatility, resulting in approximately a 0.15% decrease in firm value. We show that this increase, however, is not...

This paper examines the impact of the Asian crisis on U.S. firms. We find that while neither the average U.S. firm nor the average U.S. multinational was affected by the crisis, U.S. multinationals with presence in East Asia were negatively and significantly affected. On average, these firms...

Theoretical models predict that the value of a real option should be increasing in the volatility ofthe underlying asset. Thus, if real options are economically important, then firm values should bepositively related to volatility. Consistent with this prediction, we find evidence that stock...

Stock repurchases by U.S. companies experienced a remarkable surge in the 1980s and '90s. Indeed, in 1998, the total value of all stock repurchased by U.S. companies exceeded for the first time the total amount paid out as cash dividends. And the U.S. repurchase movement has gone global in the...

This article examines the interaction between capital structure and advertising competition. Using a sample of firms that raise significant amounts of capital, we find that firms whose financial leverage has decreased as a result of their new funding increase their advertising significantly more...