Annual Conference

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Corporate Finance, Senior Fellows/Fellows

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May 2016

Shareholder Wealth Consequence of Insider Pledging of Company Stock as Collateral for Personal Loans

Jason ZEIN, Ying DOU, Ronald W. MASULIS
We study a widespread yet under-explored corporate governance phenomenon: the pledging of company stock by insiders as collateral for personal bank loans. Utilizing a regulatory change that exogenously decreases pledging, we document a negative causal impact of pledging on shareholder wealth. We stu...
Keywords: Pledging, Managerial incentive, Downside risk, risk-taking, Payout policy
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Annual Conference

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Corporate Finance

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May 2016

Inside Brokers

Frank Weikai LI, Abhiroop MUKHERJEE, Rik SEN
We identify the stock broking house that firm's insiders trade through, and show that analysts employed at such “inside brokers” have a distinct information advantage over other analysts, even after the trade is publicly disclosed. This advantage of the “inside analyst” is stronger for firms...
Keywords: Insiders, Brokers, Analysts, Information Transmission
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Annual Conference

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Corporate Finance

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May 2016

Peer Effects of Corporate Social Responsibility

Jie CAO, Xintong ZHAN, Hao LIANG
We investigate how firms react to their product-market peers’ commitment to and adoption of corporate social responsibility (CSR) using a regression discontinuity design approach. Relying on the passage or failure of CSR proposals by a narrow margin of votes during shareholder meetings, we find th...
Keywords: corporate social responsibility, peer effects, product markets, shareholder proposal, regression discontinuity
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Annual Conference

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Corporate Finance

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May 2016

Influencing Control: Jawboning in Risk Arbitrage

Tao LI, Wei JIANG, Danqing MEI
In an 'activist risk arbitrage,' a shareholder attempts to improve terms of an announced M&A through public campaigns. Activists target deals with low premiums and those susceptible to managerial conflicts of interest, including going-private deals and deals in which CEOs receive outsized paymen...
Keywords: Activist Risk Arbitrage, M&A, Governance
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2016

Bribes and Firm Value

Stefan ZEUME
I exploit the passage of the U.K. Bribery Act 2010 as a shock to U.K. firms’ cost of doing business. Around the Act’s passage, U.K. firms operating in high-corruption countries experience a drop in firm value, while their non-U.K. competitors in these countries encounter an increase. U.K. firms ...
Keywords: valuation, Corruption, regulation, Corporate governance
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