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This paper uses the second-generation antitakeover legislation as a natural experiment to understand corporate governance in ‡uence on managerial decisions, speci…cally by examining in ‡uences on …rms'liquidity choices between cash and loan commitments. These choices di¤er primarily in the allocation of ex-post control rights of …rms'liquid-ity reserves,(More)
Electricity consumption is a useful real-time proxy for economic activities, as most modern-day economic activities involve the use of electricity, which cannot be easily stored. Empirically, electricity consumption data is widely available in high frequency at both aggregate and disaggregate levels, allowing several interesting asset pricing applications.(More)
This paper shows that active risk management policies lead to an increase in firm value. To identify the causal effect of hedging and to overcome endogeneity concerns, we exploit the introduction of weather derivatives as an exogenous shock to firms' ability to hedge weather risks. This innovation disproportionately benefits weather sensitive firms,(More)
Patient traders have an opportunity to profit from the predictable, investor-flow-induced trades of mutual funds. In a sample of 3,087 institutions in the same 13F categories as hedge funds, and in a subset of 442 identified hedge funds from 2003-2010, we find that they do. In anticipation of a 1% of volume change in mutual fund flows into a stock in the(More)
We examine the occurrence of ethics-related terms in 10-K annual reports over 1994-2006 and offer empirical observations on the conceptual framework of Erhard, Jensen, and Zaffron (2007). We use a pre-Sarbanes-Oxley sample subset to compare the occurrence of ethics-related terms in our 10-K data with samples from other studies that consider virtue-related(More)
In this paper, we examine how the violation of loan covenants (technical default) impacts firm dividend policy. Using contract-level loan data for nonfinancial firms in the U.S., we find that the occurrence of a covenant violation significantly increases the likelihood of a dividend reduction in the subsequent quarter. Moreover, we find that the degree of(More)
This research investigates the real effects of public liquidity provision. Using the Commercial Paper Funding Facility's (CPFF) eligibility criteria for non-financial commercial paper issuers as the identification strategy, we show that firms with access to the CPFF were able to mitigate the financing disruptions caused by the Lehman Brothers bankruptcy and(More)