- Corporate Finance and Governance
- Auditing, Earnings Management, Governance
- Financial Markets and Investment Strategies
- Financial Reporting and Valuation Research
- Corporate Social Responsibility Reporting
- Credit Risk and Financial Regulations
- Banking stability, regulation, efficiency
- Risk Management in Financial Firms
- FinTech, Crowdfunding, Digital Finance
- Sharing Economy and Platforms
- Microfinance and Financial Inclusion
- Family Business Performance and Succession
- Monetary Policy and Economic Impact
- Corporate Taxation and Avoidance
- Housing Market and Economics
- Social Capital and Networks
- Occupational and Professional Licensing Regulation
- Forecasting Techniques and Applications
- Dermatological and COVID-19 studies
- Environmental Sustainability in Business
- Airway Management and Intubation Techniques
- Foreign Body Medical Cases
- Insurance and Financial Risk Management
- Economic Sanctions and International Relations
- Private Equity and Venture Capital
London School of Economics and Political Science
2012-2024
London Business School
2001-2017
Hong Kong Baptist University
2017
École Polytechnique Fédérale de Lausanne
2014
National Bureau of Economic Research
2001
University of Rochester
2001
University of Pennsylvania
2001
ABSTRACT During the 2008–2009 financial crisis, firms with high social capital, as measured by corporate responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than low capital. High‐CSR also experienced profitability, growth, and sales per employee relative low‐CSR firms, they raised more debt. This evidence suggests trust between a firm both its stakeholders investors, built through investments in pays off when overall level of corporations...
This paper shows that corporate social responsibility (CSR) and firm value are positively related for firms with high customer awareness, as proxied by advertising expenditures. For low the relation is either negative or insignificant. In addition, we find effect of awareness on CSR–value reversed a poor prior reputation citizens. evidence consistent view CSR activities can add to but only under certain conditions. was accepted Bruno Cassiman, business strategy.
ABSTRACT Rating agencies have become more conservative in assigning corporate credit ratings over the period 1985 to 2009; holding firm characteristics constant, average dropped by three notches. This change does not appear be fully warranted because defaults declined this period. Firms affected conservatism issue less debt, lower leverage, hold cash, are likely obtain a debt rating, and experience growth. Their spreads than those of unaffected firms with same which implies that market...
Abstract We investigate whether a firm’s social capital and the trust that it engenders are viewed favorably by bondholders. Using firms’ environmental (E&S) performance to proxy for capital, we find no relation between bond spreads over period 2006–2019. However, during 2008–2009 financial crisis, which represents shock default risk, high-social-capital firms benefited from lower spreads. These effects stronger with higher expected agency costs of debt whose E&S efforts more...
ABSTRACT During the revelation of Harvey Weinstein scandal and reemergence #MeToo movement, firms with a nonsexist corporate culture, proxied by having women among five highest‐paid executives, earn excess returns 1.3% relative to without female top executives. These are driven changes in investor preferences toward culture. Institutional ownership increases culture after Weinstein/#MeToo events, particularly for investors larger holdings lower ESG focus ex ante. Firms executives improve...
During the 2008-2009 financial crisis, firms with high social capital, measured as corporate responsibility (CSR) intensity, had stock returns that were four to seven percentage points higher than low capital. High-CSR also experienced profitability, growth, and sales per employee relative low-CSR firms, they raised more debt. This evidence suggests trust between firm both its stakeholders investors, built through investments in pays off when overall level of corporations markets suffers a...
ABSTRACT We examine the determinants and informativeness of financial analysts' risk ratings using a large sample research reports issued by Salomon Smith Barney, now Citigroup, over period 1997–2003. find that cross‐sectional variation in is largely explained variables commonly viewed as measures risk, such idiosyncratic size, book‐to‐market, leverage. In addition, earnings‐based earnings quality accounting losses, also contribute to explaining ratings. Finally, we document can be used...
This paper studies how industry peers respond when another firm in the is subject of a hostile takeover attempt. The cut their capital spending, free cash flows, and holdings, increase leverage payouts to shareholders. They also adopt more defenses. stock price reaction upon announcement positive larger for peer firms with higher spending flows. Before attempt, borrow less invest than predicted. Both returns performance improve after These results are consistent argument that control threat...
This paper reviews the literature on real effects of financial reporting and disclosure corporate innovation, highlighting both possible channels influence potential challenges that researchers face when attributing causal effects. We discuss concept emphasising specific characteristics make investments in innovation difficult to report. then provide a review nascent work relating which we organise around three channels: financing, compensation learning. Finally, recent efforts aimed at...
ABSTRACT In this paper, we propose a rational learning‐based explanation for the predictability in financial analysts' earnings forecast errors documented prior literature. particular, argue that serial correlation pattern quarterly is consistent with an environment which analysts face parameter uncertainty and learn rationally about parameters over time. Using simulations real data, show evidence more learning than irrationality (fixation on seasonal random walk model or some other dogmatic belief).
The financial crisis of 2008 and the resulting recession caught many companies unprepared and, in so doing, provided a stark reminder importance effective risk management. While academic theory has long touted benefits management, have varied greatly ways extent to which they put into practice. Drawing on global survey over 300 CFOs non‐financial companies, authors report that while most felt their management programs significant benefits, function general needs more attention. A large...
We show that rating agencies have become more conservative in assigning credit ratings to corporations over the period 1985 2009. Holding firm characteristics constant, average dropped by three notches (e.g., from A BBB ) time. Consistent with view this change has not been fully warranted, we find defaults for both investment grade and non-investment firms declined The increased stringency also affected capital structure, cash holdings, growth, debt spreads. Firms suffer conservatism issue...
The authors summarize the findings of their study, published recently in Journal Finance , that shows CSR investments can help companies when they perhaps need it most—that is, during sharp downturns overall trust and markets declines. Companies with high‐CSR rankings experienced stock returns were five to seven percentage points higher than low‐CSR counterparts 2008–2009 financial crisis, even larger excess Enron crisis 2001–2003. High‐CSR also reported better operating performance, growth,...
We survey CFOs from 36 countries to examine whether and how firms altered their risk management policies when fair value reporting standards for derivatives were introduced. A substantial fraction of (42%) state that have been materially affected by reporting. Firms are more likely be if they seek use reduce the volatility earnings relative cash flows operate in where accounting numbers used contracting. document a decrease foreign exchange hedging nonlinear instruments. Finally, take active...
We investigate whether a firm's social capital, and the trust that it engenders, are viewed favorably by bondholders. Using firms' environmental (E&S) performance to proxy for we find no relation between capital bond spreads over period 2006-2019. However, during 2008-2009 financial crisis, which represents shock default risk, high-social-capital firms benefited from lower spreads. These effects stronger with higher expected agency costs of debt whose E&S efforts more salient. During were...
ABSTRACT We study how the interplay of disclosure and regulation shapes capital allocation in reward crowdfunding. Using data from Kickstarter, largest online crowdfunding platform, we show that, even absence clear enforcement mechanisms, helps entrepreneurs access for their projects bolsters engagement with potential project backers, consistent notion that mitigates moral hazard. further document subsequent to a change Kickstarter's terms use increases threat consumer litigation,...
This study examines how takeover decisions are influenced by the quality of information in target firms' earnings. We show that bidders prefer negotiated takeovers deals involving targets with poor earnings quality. Moreover, and premiums negatively related takeovers, suggesting obtain valuable private through negotiations. also find share risk shareholders paying more equity for These findings driven primarily asymmetric component (as opposed to symmetric component), observed mainly...
ABSTRACT The traditional view of equity analysts is that they are a source new information about future cash flows. We broaden this by demonstrating also substantive priced risk. In particular, we document that, when announced, changes in analyst risk ratings distinctly and significantly affect returns, generally followed significant Fama–French factor loadings. Also, while less frequent than credit rating changes, timelier, with larger overall stock price impact changes.
ABSTRACT We exploit the staggered introduction of CPA Mobility provisions in United States to study effects spatial licensing requirements on labor market for accounting professionals. Specifically, we examine whether removal licensing‐induced geographic barriers affects wages and employment levels, as well pricing quality professional services. find that, subsequent adoption provisions, professionals decrease, whereas levels are unaffected. The documented wage effect stems from smaller...
We survey CFOs of public and private firms from 36 countries to examine whether why around the world altered their risk management policies when fair value reporting standards for derivatives were introduced, a substantial fraction (42%) state that have been materially affected by reporting. Firms are more likely be if they seek use reduce volatility earnings relative cash flows operate in with low disclosure standards. Further, significantly reduced non-linear options contracts as result...