Annual Conference

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Corporate Finance

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May 2016

Anticorruption, Political Connections, and Corporate Cash Policy: Evidence from Politician Downfalls in China

Xiaofeng ZHAO, Haohan REN
We examine how firms change their cash policies in response to the downfall of corrupt politicians in China. We find that firms connected to their local government increase cash holdings when high-profile politician downfalls occur in the government. Consistent with the precautionary saving argument...
Keywords: Anticorruption, politician downfalls, Political Connections, Cash Policy
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Annual Conference

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Corporate Finance

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May 2016

Assortative Matching in Managerial Labor Markets: Theory and Measurement

Egor MATVEYEV
This paper provides evidence on the importance of complementarities in production within executive teams. Using data on top managers in large U.S. firms, I find that the managerial labor market is characterized by the high degree of within-firm positive sorting, which implies that better managers ar...
Keywords: Managerial talent, complementarities in production, assortative matching, executive compensation, director compensation, structural estimation
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Annual Conference

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Corporate Finance, Senior Fellows/Fellows

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May 2016

Anti-Corruption Reforms and Shareholder Valuations: Event Study Evidence from China

Randall MORCK, Bernard YEUNG, Chen LIN, Xiaofeng ZHAO
Chinese share prices rose sharply on the Politburo's Dec. 4th, 2012, announcement of its Eight-point Regulation, an uncharacteristically detailed and concrete Party policy, initiating an extensive anti-corruption campaign and announced surprisingly soon after a change in leadership. The reaction is ...
Keywords: Anti-Corruption, Marketization, Bribery Intensity, Firm Value
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2016

Whatever it takes: The Real Effects of Unconventional Monetary Policy

Viral V. ACHARYA, Tim EISERT, Christian EUFINGER, Christian HIRSCH
Launched in Summer 2012, the European Central Bank’s (ECB) Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereign bonds. However, the stability reestablished in the banking sector did not fully translate into economic...
Keywords: monetary policy, Zombie Lending, Banking sector, Cash reserves
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2016

Understanding Exchange Rate Dynamics: What Does the Term Structure of FX Options Tell Us

Yu-chin CHEN, Ranganai GWATI
This paper proposes using foreign exchange (FX) options with dierent strike prices and maturities (\the term structure of volatility smiles") to capture both FX expectations and risks. Using daily options data for six major currency pairs, we show that the cross section and term structure of options...
Keywords: exchange rates, excess returns, options pricing, volatility smile, risk, term structure of implied volatility, quantile regression
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