Nonexperimental data are used to evaluate impacts of a Bolivian preschool program on cognitive, psychosocial, and anthropometric outcomes. Impacts shown be highly dependent age exposure duration. To minimize the effect distributional assumptions, estimated as nonparametric functions A generalized matching estimator is developed control for nonrandom selectivity into durations. Comparisons with three groups—children in feeder area not program, children ≤ 1 month, living similar areas without...

Abstract Using a unique and rich database of high-technology firms in China, we show that effective enforcement intellectual property rights at the provincial level is critical encouraging financing investing R&D. Better (IP) positively affects firms' ability to acquire new external debt allows invest more R&D, generate innovation patents, produce sales from products. Our results suggest facilitating R&D are channels through which better IP can affect economic growth.

Abstract How does trust affect business contracting at the firm level? We analyze case of foreign high-tech companies investing in China, where risk expropriation their intellectual property is high. find that firms mitigate this type by taking local trustworthiness into account when making investment decisions. Firms prefer to invest regions partners and employees are considered more trustworthy; they also likely establish joint ventures make greater research development investments. employ...

Abstract We provide direct empirical evidence that share overvaluation is an important motive for firms to make stock acquisitions. find more overvalued are likely acquire with stock, and acquirers in successful mergers than withdrawn mergers. Acquirers' overvaluation, on average, exceeds the targets' premium‐adjusted overvaluation. Shareholders of acquirers, whose greater their realize sustained wealth gains from one day before merger announcement up three years after completion, as...

Abstract Using a large hand-collected database of chief executive officer (CEO) bonus structures, we find that when CEO’s is directly tied to earnings per share (EPS), his company more likely conduct buyback. This effect especially pronounced company’s EPS right below the threshold for award. Share repurchasing increases probability CEO receives and magnitude bonus, but only pay based. Bonus-driven firms do not exhibit positive long-run abnormal returns.

Abstract We examine the role of financial analysts in forming institutional investors' investment decisions. In our model, a fund manager invests stock based on optimal weighting reports created by biased sell-side analyst and an unbiased buy-side analyst. The puts higher weight analyst's report when quality buyside information relative to that increases, or degree bias uncertainty about increases. Utilizing unique dataset U.S. equity funds, we find evidence supporting model predictions how...

We provide direct empirical evidence that stocks' overvaluation is an important motive for firms to make acquisitions with their stocks, supporting the market driven acquisition theory (Shleifer and Vishny, 2002). Overvaluation increases probability of becoming acquirers using own stocks as medium exchange. Once overvaluations combined are taken into account, merged do not fare worse than matches. Compared matches before merger announcement, original acquirers' shareholders lose; instead...

Using the financial crisis as a natural experiment, we analyze extent to which firms adjust policies on margin in response credit supply shock. We document significant reductions corporate payouts – both dividends and (to larger extent) share repurchases - during 2008-2009 crisis. Payout are more likely with higher leverage, valuable growth options, lower cash balances i.e., those susceptible negative consequences of Moreover, appear use proceeds from reduction payout maintain levels fund...

Using a sample of accelerated share repurchase (ASR) program announcements from 2004 to 2020, we analyze firms’ rationale for undertaking ASR programs rather than the more traditional open market (OMR) programs. Based on notion that are faster but costly firm execute and involve greater commitment by complete entire number shares announced, develop test several hypotheses regarding choice between OMR The three most prominent these signaling or undervaluation hypothesis, whereby firms with...

We test the predictions of Titman (1984) and Berk, Stanton, Zechner (2010) by examining effect leverage on labor costs. Leverage has a significantly positive impact CEOs’ cash, equity-based, total compensation. Compensation new CEOs hired from outside firm is positively related to prior-year leverage. In addition, significant average employee pay. The incremental expenses associated with an increase in are large enough offset tax benefits debt. empirical evidence supports theoretical...

Accelerated share repurchase (ASR) programs, an innovative way of repurchasing shares, have become increasingly popular in recent years. In this paper, we analyze firms' rationale for undertaking ASRs rather than the traditional open market (OMR) programs. Using a hand-collected sample ASR announcements, test eight hypotheses regarding conducting programs: distribution excess cash hypothesis, target leverage-ratio takeover avoidance employee stock option dilution managerial opportunism...

Practitioners and academics widely suspect that managers engage in "big bath" reporting behavior as a form of earnings management, but conclusive evidence this has been difficult to document due the inherently endogenous nature large nonrecurring charges necessary big bath. We introduce novel dataset natural disasters address problem argue provide an ideal exogenous shock examine baths. Consistent with opportunistic reporting, we find that, relative both matched firms unaffected by disaster...

Abstract We show that high cash holdings can be used by executives in the ex post bargaining over their compensation. Cash are positively associated with CEO compensation and is driven non-salary components. In companies weaker governance, this relation more pronounced. Using exogenous shocks to firm’s cash, we readily responds increases holdings, confirming managers able derive personal benefits from excess holdings.

This paper uses a large, nonexperimental data set to evaluate the effects of preschool enrichment program in developing country on cognitive, psycho-social, and anthropometric outcomes. Outcomes are shown be highly dependent age duration exposure program. To minimize impact distributional assumptions, impacts estimated nonparametrically as function duration. A generalized version method matching is developed used control for nonrandom selectivity into or alternative durations. The estimates...

We examine the role of financial analysts in forming institutional investors' investment decisions. model how a fund manager invests stock based on reports produced by biased sell-side analyst and an unbiased buy-side analyst. She weighs two her decision making, puts higher weight analyst's report when quality information relative to that increases, or degree bias uncertainty increases. Utilizing unique data set U.S. equity funds with description organizational structure research sources, we...

Tradeoff theory points to direct bankruptcy costs as the main reason for observed low leverage in corporate capital structure. However, empirical evidence does not justify a sufficient disincentive issue debt. Recent theoretical models suggest that indirect arising from human can be one use of We empirically test impact on labor costs, and explore whether are large enough limit conduct our analysis using two measures costs: magnitude CEO compensation average employee pay. In both simple OLS...

Firms endogenize the extent of information asymmetry by choosing optimal level and channels direct communication with capital markets. choose more when they have a greater potential demand for external financing (characterized higher growth, less cash, leverage). We demonstrate that is associated probability equity issuance. further document previously observed negative market reaction to seasoned offering (SEO) announcements attributed only low-communication firms; high-communication SEO...

Market efficiency improves for stocks that are listed on the newly established single stock futures (SSF) exchanges. After identifying information associated with large price changes, we show number of unexplained returns decreases SSF firms in comparison to pre-SSF period, and matched non-SSF sample. The reduction is positively related extent trading activity market.