This study examines the impact of firms' overall corporate policy risk on stock liquidity. This study constructs a novel overall corporate policies risk index (PRI) for firms by capturing risk embedded in managers' different policy decisions, such as investment, financing, diversification, and...

We show the effect of CEOs' characteristics on corporate risk-taking of a hand-collected sample of 369 Latin American listed firms from Argentina, Brazil, Chile, Colombia, Mexico, and Peru for the period 2005-2020. We study six traits: CEOs’ age, tenure, gender, duality (i.e., holding...

Using natural language processing, we identify and categorize the corporate goals in the shareholder letters of the 150 largest companies in the United States, from 1955 to 2020. Corporate goals have proliferated during this period from an average of two in 1955 to almost 10 in 2020. We find a...

We survey a representative sample of the U.S. population to understand stakeholders’ desire to see their firms exit Russia after the invasion of Ukraine. 61% of respondents think that firms should exit Russia, regardless of the consequences. Only 37% think that leaving Russia is a purely...

This paper uses ChatGPT, a large language model, to extract managerial expectations of corporate policies from disclosures. We create a firm-level ChatGPT investment score, based on conference call texts, that measures managers’ anticipated changes in capital expenditures. We validate the...

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, the people running large public corporations say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take...

Using natural language processing, we identify corporate goals stated in the shareholder letters of the 150 largest companies in the United States from 1955 to 2020. Corporate goals have proliferated, from less than one on average in 1955 to more than 7 in 2020. While in 1955, profit...

In this article, we seek to contribute to the literature on corporate political activity (CPA) by exploring the impact of CEO values on this nonmarket activity. Building a database of CEO values by analyzing the text of quarterly earnings conference call transcripts, we test whether firms with...

Eine verantwortungsvolle Unternehmensführung (RBC) verfolgt das Ziel einen Beitrag zum wirtschaftlichen, ökologischen und sozialen Fortschritt zu leisten und nachteilige Effekte, die im Zusammenhang mit der Tätigkeit, den Produkten oder Dienstleistungen eines Unternehmens stehen, zu vermeiden...

On February 24, 2022, Russian troops launched a full scale invasion against Ukraine. Following the invasion, governments around the world issued a range of economic sanctions on Russian banks, state owned enterprises, the technology and financial sectors, and Russian individuals in order to stop...

This chapter reviews the literature on commercial lobbying. It places this literature into the context of the broader lobbying literature. Commercial lobbyists work for for-profit organizations that sell their services as intermediaries between policymakers and special interest groups. This...

In response to the reduction in trade policy uncertainty following China's accession to the WTO, U.S. manufacturing firms implemented more conservative capital structures, relying less on debt financing and holding more cash. We identify the effects using cross-sectional variation in exposure as...

We survey a representative sample of the U.S. population to understand stakeholders’ desire to see their firms exit Russia after the invasion of Ukraine. 61% of respondents think that firms should exit Russia, regardless of the consequences. Only 37% think that leaving Russia is a purely...

Uncertainty over future business conditions lies at the heart of firm decision-making. Uncertainty can arise from a myriad of sources and is difficult to measure. We present a simple conceptual framework showing how several key corporate decisions are affected by uncertainty. We also highlight...

We investigate how marginal corporate tax rate affects corporate policy changes in response to a regulatory credit crunch. With a surge in debt due to a fiscal stimulus after 2008, the Chinese government rolled out the “deleveraging” program in 2015 which, through tightening monetary...

By relying on upper echelons theory and agency theory, this study explores how CEO characteristics impact firms’ engagement in corporate political strategy (CPS). The current study proposes that depending on their CEOs’ tenure, firms have different interests and incentives to make CPS...

Why do competitive firms in the US provide paid parental leave (PPL)? Which firms do and to what extent? We use several firm- and individual-level data sets to answer these questions. These include the BLS-Employee Benefit Survey (EBS) for 2010 to 2018 and an extensive firm-level data collection...

In this paper, we study shareholder views on corporate political contributions. We find that, with shareholders’ explicit approval, firms are more likely to have higher corporate political contribution, measured by the amount of donations to the US political parties in the next election cycle....

Law-abiding firms often attempt to conceal their corporate political activity (CPA), yet the concealment of CPA has not been matched by our understanding of the phenomenon. We develop a theoretical framework consisting of three components to analyze firms’ strategy of CPA concealment. First,...

We study whether CEO political ideology affected how S&P 500 firms reacted to the Covid-19 pandemic, an exogenous shock to demand and supply. We hypothesize that conservative CEOs are more likely to adopt shareholder-friendly than employee-friendly reactions to the pandemic. Hence, they should...

We theoretically examine voting for corporate policies when shareholders or board members face a trade-off between maximizing firm value and implementing social objectives (like minimizing pollution). If voters care about one social objective, we show that voting can successfully aggregate...

Syndicated loans integrate bank monitoring with risk sharing similar to corporate bonds. Consistent with this argument, we find that firms use more loans and fewer bonds, and increase capital expenditures, after initial access to the syndicated loan market. The growth of collateralized loan...

Purpose: We investigate the effect of uncertain times on LGBT-supportive corporate policies, exploiting a novel text-based measure of economic policy uncertainty (EPU) recently constructed by Baker et al. (2016). LGBT-supportive policies have attracted a great deal of attention in the media...

Eine verantwortungsvolle Unternehmensführung (RBC) verfolgt das Ziel einen Beitrag zum wirtschaftlichen, ökologischen und sozialen Fortschritt zu leisten und nachteilige Effekte, die im Zusammenhang mit der Tätigkeit, den Produkten oder Dienstleistungen eines Unternehmens stehen, zu vermeiden...

Using natural language processing, we identify and categorize the corporate goals in the shareholder letters of the 150 largest companies in the United States, from 1955 to 2020. Corporate goals have proliferated during this period from an average of two in 1955 to almost 10 in 2020. We find a...

Firms increasingly take stances on polarizing issues but at the same time invest in political activities that may contradict their claims. In this paper, we analyze whether firms’ sociopolitical claims and political activities are aligned. We develop a dictionary of claims related to diversity...

Individuals with an Anglo-Saxon cultural background are customarily considered to be less risk-averse than other individuals. The validity of this assumption appears to be borne out in the world of corporate finance. We investigate the risk-related corporate decisions of the board of directors,...

I survey recent papers that connect firms’ policies to their expected returns. Policies such as hiring, investment, inventory, and innovation all predict stock returns. However, most of these anomalies are explained by the Q-factor model. This finding supports conditional model...

We investigate the effect of CEO relative age, an early-life measure defined as age relative to others in the same school cohort determined by the cutoff date policy at primary school entry, on corporate risk-taking. We base our analysis on the arguable randomness of managers’ birth months and...

This paper documents the partisan divides of corporate political activities. The partisan preferences of firms in their PAC contributions are persistent over the past 30 years. We find that the political partisanship of firm executives is a key factor driving the orientation of corporate...

Ziel des Beitrages ist es, die geschäftspolitischen Entscheidungen der Reedereien in dem extrem volatilen Umfeld einer Pandemie, geprägt von regulatorischen und operativen Schwierigkeiten, zu analysieren, um anschließend nachzuvollziehen, wie die gesamte Branche der Containerlinienreedereien...

We investigate the unique role and mechanisms of industry growth in firms’ risk-taking policies. We find that industry growth is negatively associated with corporate risk-taking, consistent with the prospect theory that a high-growth industry gives firms a superior external environment, which...

We study how non-financial multinational companies propagate economic declines from their subsidiaries located in countries experiencing an economic downturn to subsidiaries in countries not experiencing one. We find that investment is 18% lower in subsidiaries of these parents relative to the...