Annual Conference

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Corporate Finance

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May 2016

How do financial constraints affect an incumbent supplier firm's choice of extending more trade credit versus offering price discounts when facing an increased threat of entry from competitors? The threatened incumbent supplier firms may (a) extend more trade credit, ex-ante, to defend their market ...
Keywords: trade credit, limit-pricing, entry threat, Financial constraints
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Annual Conference

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Corporate Finance, Senior Fellows/Fellows

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May 2016

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

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

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

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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