Showing papers in "Journal of Financial Economics in 1999"

TL;DR: This article found that measures of board and ownership structure explain a significant amount of cross-sectional variation in CEO compensation, after controlling for standard economic determinants of pay, and that CEOs earn greater compensation when governance structures are less effective.

TL;DR: The authors examine the determinants and implications of holdings of cash and marketable securities by publicly traded U.S. firms in the 1971-1994 period and find evidence supportive of a static tradeoff model of cash holdings.

TL;DR: In this paper, the authors extend the cross-sectional results of Demsetz and Lehn and use panel data to show that managerial ownership is explained by key variables in the contracting environment in ways consistent with the predictions of principal-agent models.

TL;DR: For 307 firms over the 1990-1994 period, this paper found that board meeting frequency is related to corporate governance and ownership characteristics in a manner that is consistent with contracting and agency theory.

TL;DR: In this paper, the authors compare traditional capital structure models against the alternative of a pecking order model of corporate financing, which predicts external debt financing driven by the internal financial deficit, has much greater time-series explanatory power than a static trade-off model which predicts that each firm adjusts gradually toward an optimal debt ratio.

TL;DR: This paper found that stock options, but not common stockholdings, significantly increase the sensitivity of CEOs' wealth to equity risk and that this sensitivity is positively related to firms' investment opportunities.

TL;DR: In this article, a genetic algorithm was used to learn technical trading rules for the S&P 500 index using daily prices from 1928 to 1995, and the rules were able to identify periods to be in the index when daily returns are positive and volatility is low and out when the reverse is true.

TL;DR: In this article, the authors examined the stock price impact of international dual listings and found that the market reaction to a Depositary Receipt program is larger in magnitude and more pervasive than previously reported.

TL;DR: The authors examined the impact of foreign investors on stock returns in Korea from November 30, 1996 to the end of 1997 using order and trade data and found strong evidence of positive feedback trading and herding by foreign investors before the period of Korea's economic crisis.

TL;DR: In this article, a statistically significant indirect cost in the form of a negative relation between a fund's abnormal return and investor flows was found, and the common finding of negative return performance at open-end mutual funds is attributable to the costs of liquidity-motivated trading.

TL;DR: In this paper, the authors examined firm debt maturity in 30 countries during the period 1980-1991 and found that stock market activity is not correlated with debt levels of small firms, while the size of the banking sector is uncorrelated with the capital structures of large firms.

TL;DR: In this paper, the authors examine the impact and motivation of pension fund activism by studying the shareholder proposals of the largest, most active funds from 1987 through 1993, and find significant heterogeneity across funds in activism objectives, tactics, and impact on target firms, consistent with differing investment strategies.

TL;DR: In this article, the authors examine the equity ownership structure and board composition of a sample of 583 firms over the ten-year period 1983-1992 and find that a substantial fraction of firms exhibit large changes in ownership and board structure in any given year.

TL;DR: The authors empirically analyzed the information hypothesis that the separation of a "rm's divisions into independently traded units through a spin-o! enhances value because it mitigates information asymmetry about the "rm.

TL;DR: In this paper, the authors show that higher cash flow volatility is associated with lower average levels of investment in capital expenditures, R&D, and advertising, suggesting that firms do not use external capital markets to fully cover cash flow shortfalls but rather permanently forgo investment.

TL;DR: In this paper, the authors examine pairs of large, ''Siamese twin'' companies whose stocks are traded around the world but have different trading and ownership habitats Twins pool their cash flows, so, with integrated markets, twin stocks should move together However, the difference between the prices of twin stocks appears to be correlated with the markets on which they are traded most.

TL;DR: In this paper, the authors examine the loss in utility for a consumer who ignores any or all of the following: (1) the multi-period nature of the consumer's portfolio-choice problem, (2) the empirically documented predictability of asset returns, or (3) transaction costs.

TL;DR: The authors empirically examined the compensation of Venture Capital Limited Partnership (VCLP) managers and found that the fixed base component of incentive compensation is higher for younger and smaller firms, and no relation between incentive compensation and performance.

TL;DR: In this article, the authors examined how political and economic factors affect the offer price, share allocation, and other terms governments choose when they privatize state-owned enterprises via a public share offering.

TL;DR: This article found that the likelihood that a retired CEO serves on his own board two years after departure, as well as the likelihood of serving as an outside director on other boards, are positively and strongly related to his performance while CEO.

TL;DR: In this paper, the authors examine the importance of stockholders and bondholders in capital-structure choice and compute the expected wealth transfer between stockholders, bondholders, and other stakeholders when a "rm adopts a new project.

TL;DR: The authors empirically examined the impact of flotation costs, agency conflicts, regulation, and information asymmetries on a firm's mix between public and private debt and found that firms with larger issue sizes exploit the scale economies in flotation cost of public debt.

TL;DR: In this article, the authors examined whether an increase in focus is an explanation for the stock market gains associated with spinoffs and found that the announcement period as well the long-run abnormal returns for the focus-increasing spinoffs are significantly larger than the corresponding abnormal return for the non-focus increasing spinoffs.

TL;DR: The authors examined the time-series relations among expected return, risk, and book-to-market (B/M) at the portfolio level and found that B/M predicts economically and statistically signi cant time-variation in expected stock returns.

TL;DR: In this article, substantial long-run post-issue underperformance by "rms making straight and convertible debt o!erings from 1975 to 1989 was documented. But the authors found that the underperformance was more severe for smaller, younger, and NASDAQ-listed " rms, and for " rm issuing speculative grade debt, and they concluded that debt o!'erings are signals that the "rm is overvalued.

TL;DR: In this article, the authors simulate standard tests of performance persistence using alternative returngenerating processes, survival criteria, and test methodologies, and examine the speci ccation and power of the various persistence tests.

TL;DR: This paper examined whether the existence of a bank/firm relationship lowers the cost of public debt financing and found that firm reputation is negatively related to the at-issue yield spread for initial public debt borrowers.

TL;DR: In this paper, the competitive effect of commercial bank entry into the corporate debt underwriting market was examined with respect to underwriter spreads, ex-ante yields, and market concentration.

TL;DR: In this paper, the authors investigate the evolution of governance structure, characterized by ownership concentration, compensation policy, and board composition, in the U.S. airline industry during a 22-year period surrounding the Airline Deregulation Act of 1978.

TL;DR: This paper explains how truncation error arises and describes the Adaptive Mesh Model (AMM), a new approach that sharply reduces it by grafting one or more small sections of fine high-resolution lattice onto a tree with coarser time and price steps.