Annual Conference

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Corporate Finance

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May 2023

Learning Production Process Heterogeneity Across Industries: Implications of Deep Learning for Corporate M&A Decisions

Jongsub LEE, Hayong YUN
Using deep learning techniques, we introduce a novel measure for production process heterogeneity across industries. For each pair of industries during 1990-2021, we estimate the functional distance between two industries’ production processes via deep neural network. Our estimates uncover the und...
Keywords: Deep learning, production process heterogeneity, M&A’s, integration synergy, the boundaries of the firm
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Annual Conference

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Corporate Finance

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May 2023

Managerial Learning from Decoding Noisy Stock Prices: New(s) Evidence

Alan KWAN, Tse-Chun LIN, Po-Yu LIU
A long literature argues corporate managers learn from stock prices, but organizations’ learning process is challenging to observe. We present a novel test using firm-level readership of financial media articles as a manifestation of managerial learning. We hypothesize that reading financial media...
Keywords: big data, managerial learning, market feedback effects, financial news, R&D
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Annual Conference

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Corporate Finance

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May 2023

Do Banks Compete on Non-Price Terms? Evidence from Loan Covenants

Rustam ABUZOV, Christoph HERPFER, Roberto STERI
We investigate the link between competition and non-price loan terms by exploiting a regulatory shock to banks’ ability to offer covenant-lite loans. As regulated banks demand more covenants, borrowers trade off staying with banks and receiving lower interest rates, but with covenants, against swi...
Keywords: non-price competition, shadow banks, leveraged lending, covenants, syndicated loans, relationship lending
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Annual Conference

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Corporate Finance

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May 2023

Do Hedge Funds Exploit Material Nonpublic Information?

Wei WANG, Yan YANG, Jingyu ZHANG
Serving on unsecured creditors’ committee (UCC) of a bankrupt firm, hedge funds gain access to material nonpublic information. Although hedge funds are prohibited from trading bankrupt firm’s securities with information access, less is known about whether such information access facilitates hedg...
Keywords: Bankruptcy, Unsecured Creditors’ Committee, Hedge Funds, Private Information, Trading
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Annual Conference

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Corporate Finance

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May 2023

Market-Based Innovation Policy: Evidence from High-Tech Incubators in China

Yue PAN, Tao SHU, Vincent YAO, Pengdong ZHANG
Using proprietary data of all high-tech incubators in China, we study a new approach by government to implement industrial policy through market intermediaries instead of directly allocating resources. Exploiting a highly localized industrial policy that targets different “strategic emerging indus...
Keywords: Entrepreneurship, Incubators, High-tech startups, Industrial policy, Innovation
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