Open AccessPosted Content
Financial Structure, Acquisition Opportunities, and Firm Locations
TLDR
This article investigated the relation between firms' locations and their corporate finance decisions and found that firms located within industry clusters make more acquisitions, and have lower debt ratios and larger cash balances than their industry peers located outside clusters.Abstract:
This paper investigates the relation between firms’ locations and their corporate finance decisions. We develop a model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those acquisitions, firms within clusters maintain more financial slack. Consistent with our model we find that firms located within industry clusters make more acquisitions, and have lower debt ratios and larger cash balances than their industry peers located outside clusters. We also document that firms in high tech cities and growing cities also maintain more financial slack. Overall the evidence suggests that growth opportunities influence firms’ financial decisions.read more
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Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence
TL;DR: It is shown that CSR decreases systematic risk and increases firm value and these effects are stronger for firms producing differentiated goods and when consumers' expenditure share on CSR goods is small.
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Employee Treatment and Firm Leverage: A Test of the Stakeholder Theory of Capital Structure
TL;DR: In this paper, the authors investigate the stakeholder theory of capital structure from the perspective of a firm's relationships with its employees and find that firms that treat their employees fairly (as measured by high employee-friendly ratings) maintain low debt ratios.
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Why Do Firms Appoint CEOs as Outside Directors
TL;DR: In this article, the determinants of appointments of outside CEOs to boards and how these appointments impact the appointing companies were examined and it was found that CEOs are most likely to join boards of large established firms that are geographically close, pursue similar financial and investment policies, and have comparable governance mechanisms to their own firms.
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Does Geography Matter? Firm Location and Corporate Payout Policy
TL;DR: This paper investigated the impact of geography on agency costs and firm dividend policies and found that remotely located firms pay higher dividends to mitigate agency conflicts, and that the effect of location on dividends is most pronounced for firms with more severe free cash flow problems.
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Government Ownership and the Cost of Debt: Evidence from Government Investments in Publicly Traded Firms
TL;DR: In this paper, the authors investigate the effect of government share ownership on the cost of corporate debt and find that government ownership is associated with a higher cost of debt in non-crisis years (61 basis points (bp)) but with a lower costs of debt during the recent financial crisis (18 bp) and other banking crises (9 bp).
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Posted Content
Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
TL;DR: In this paper, the benefits of debt in reducing agency costs of free cash flows, how debt can substitute for dividends, why diversification programs are more likely to generate losses than takeovers or expansion in the same line of business or liquidationmotivated takeovers, and why the factors generating takeover activity in such diverse activities as broadcasting and tobacco are similar to those in oil.
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Corporate financing and investment decisions when firms have information that investors do not have
TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
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On Persistence in Mutual Fund Performance
TL;DR: Using a sample free of survivor bias, this paper showed that common factors in stock returns and investment expenses almost completely explain persistence in equity mutual fund's mean and risk-adjusted returns.
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Determinants of corporate borrowing
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
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Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations
TL;DR: In this paper, the authors compare the geographic location of patent citations to those of cited patents, as evidence of the extent to which knowledge spillovers are geographically localized, and find that citations to U.S. patents are more likely to come from the U. S., and more likely than coming from the same state and SMSA as cited patents than one would expect based only on the preexisting concentration of related research activity.
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