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Costly external finance, corporate investment, and the subprime mortgage credit crisis
We study the effect of the recent financial crisis on corporate investment. The crisis represents an unexplored negative shock to the supply of external finance for non-financial firms. CorporateExpand
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When Are Outside Directors Effective?
This paper uses recent regulations that have required some companies to increase the number of outside directors on their boards to generate estimates of the effect of board independence onExpand
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Cash Holdings and Corporate Diversification
This paper studies the relation between corporate liquidity and diversification. The key finding is that multidivision firms hold significantly less cash than stand-alone firms because they areExpand
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The Politics of Government Investment
This paper investigates the relation between corporate political connections and government investment. We study various forms of political influence, ranging from passive connections between firmsExpand
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Safer Ratios, Riskier Portfolios: Banks’ Response to Government Aid
Using novel data on bank applications to the Troubled Asset Relief Program (TARP), we study the effect of government assistance on bank risk taking. Bailed-out banks initiate riskier loans and shiftExpand
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Divisional Managers and Internal Capital Markets
Using hand-collected data on divisional managers at S&P 500 firms, we study their role in internal capital budgeting. Divisional managers with social connections to the CEO receive more capital.Expand
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Riding the Merger Wave: Uncertainty, Reduced Monitoring, and Bad Acquisitions
We show that acquisitions initiated during periods of high merger activity (“merger waves”) are accompanied by poorer quality of analysts' forecasts, greater uncertainty, and weaker CEOExpand
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Markowitz Versus the Talmudic Portfolio Diversification Strategies
Although expected utility theory and the classical mean variance diversification theory of Markowitz assert that optimal diversification depends on the joint distribution of returns, investors tendExpand
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Cash Flow Hedging and Liquidity Choices
This article studies the interaction between corporate hedging and liquidity policies. We present a theoretical model that shows how corporate hedging facilitates greater reliance on cost-effective,Expand
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The Dynamics of Cash
Little is known about how firms manage cash policy over time. This paper fills this gap by examining if and how firms manage cash toward a target cash ratio. Estimating partial adjustment models ofExpand
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