Learn More
Textbook arbitrage in financial markets requires no capital and entails no risk. In reality, almost all arbitrage requires capital, and is typically risky. Moreover, professional arbitrage is conducted by a relatively small number of highly specialized investors using other people's capital. Such professional arbitrage has a number of interesting(More)
We examine the effects of bank–firm relationships on firm performance in Japan. When access to capital markets is limited, close bank–firm ties increase the availability of capital to borrowing firms, but do not lead to higher profitability or growth. The cost of capital of firms with close bank ties is higher than that of their peers. This indicates that(More)
This paper studies the impact that capital market imperfections have on the natural selection of the most eecient rms by estimating the eect of the pre-deregulation level of leverage on the survival of trucking rms after the Carter deregulation. Highly leveraged carriers are less likely to survive the deregulation shock, even after controlling for various(More)
Contents Abstract 111 Keywords 111 1. Introduction 112 1.1. Scope of the essay: what's covered and what's left out 113 1.2. Organization 3. Evidence on investment at the firm level 125 3.1. Financial slack and investment 125 3.1.1. What we know: firms with more cash and less debt invest more 125 3.1.2. What we don't know: why firms with more cash and less(More)
This paper uses social networks to identify information transfer in security markets. We focus on connections between mutual fund managers and corporate board members via shared education networks. We find that portfolio managers place larger bets on connected firms and perform significantly better on these holdings relative to their We would like to thank(More)
This paper investigates individual fund returns in the private equity industry using a unique data set collected by Venture Economics. We find a large degree of heterogeneity among fund returns. Those returns persist strongly across funds by private equity firms. The returns also improve with firm experience. Better performing funds are more likely to raise(More)