Journal of Corporate Finance最新文献

Firms frequently enter dividend hibernation, periods during which dividends remain unchanged for consecutive quarters. We employ a dividend event framework to show that, compared to non-hibernating firms, hibernators experience higher unexpected future earnings growth for up to five years by reducing underinvestment. We construct an index of adverse selection measures and find that hibernating firms are more opaque, indicating that the information gap between insiders and outsiders widens when there is no change in dividends. Extended hibernation episodes increase the opaqueness, while dividend changes after prolonged periods of fixed dividends reduce the information gap more promptly.

This paper investigates whether a firm's debt maturity structure affects the quality of its risk disclosures. Using a sample of U.S. public firms from 2005 to 2017, we provide robust evidence that a firm's exposure to refinancing risk, measured as the proportion of long-term debt that matures within one year, is positively correlated with the readability and specificity of risk disclosures. This relationship is stronger for firms that have greater concerns over refinancing risk and for firms operating in environments with lower proprietary disclosure costs. In addition, we show that high-quality risk disclosures can help firms mitigate refinancing risk by reducing the cost of future debt financing. Our study extends the current literature on risk disclosures and enhances the understanding of how refinancing risk shapes corporate disclosures.

Employing a sample of 4655 U.S. public firms from 1993 to 2017, we document robust evidence that firms with more registered trademarks have a lower cost of equity. We further show that the equity financing cost is lower for firms with better-protected trademarks in difference-in-differences estimation based on the enactment of the Federal Trademark Dilution Act in 1996. In addition, our analysis reveals that the effect of trademarks on the cost of equity is achieved through the informational channel, the disciplinary channel, and the stabilizing cash flow channel. These results suggest that trademarks play an important role in alleviating the equity financing cost, thus clarifying the underlying mechanism that brand equity creates value.

We investigate the impact of CEO network centrality, a central position in a social network, on bank risk. Using a sample of 471 bank holding companies (BHCs) in the US from 1999 to 2018, we find that CEO network centrality is negatively related to bank risk and this is due to CEOs with higher levels of network centrality implementing less risky policies. Additionally, we find that information flow and CEO power are two channels through which CEO network centrality reduces bank risk. Our empirical results still hold when we employ a battery of methods to mitigate endogeneity issues. Our research further extends a new strand of studies focusing on the specific position/hierarchy of executives/directors in a social network.

I examine the effect of religious observance, represented by fasting hours during the month of Ramadan, on bank liquidity creation. I exploit exogenous variation of Ramadan fasting hours that depends on: (1) the timing of Ramadan based on the rotating Islamic calendar; and (2) a country’s latitude. My results document that one additional Ramadan fasting hour reduces bank liquidity creation by 1.1% within countries with the share of Muslim population above 50%. No such effect is found in Muslim-minority countries. In terms of transmission channel, I find that intensified Ramadan fasting reduces the productivity of economic agents that use financial services, hence lower the demand for bank liquidity creation. My results are robust for a battery of sensitivity checks and omitted variables concerns. The results offer novel insights into the effect of a specific religious observance on bank liquidity creation in the Islamic world.

Using the natural experiment created by France's 2011 board gender quota law, we find that the presence of women on boards increases firms' environmental and social (E&S) performance. After the quota law, firms are more likely to create an E&S committee, and women directors are increasingly serving as members of the main board committees and as chairs of E&S committees. We find that prior to being recruited to boards, women directors have more environmental and social experience than men. Combined with their increased authority after the introduction of quotas, their E&S skills allow them to steer companies toward more E&S-oriented policies.

We examine how firm performance is associated with social diversity among corporate directors, proxied by diversity along religion and caste, a deep-rooted institution dividing India’s Hindu society into hundreds of communities. To identify directors’ social identities, we build one of the first data-driven mappings of last names to caste and religion. We find that Indian corporate boards are strikingly homogeneous (i.e. lack diversity) during 1999–2015. Using four instrumental variable strategies, we find that board homogeneity is negatively related to firm performance. We find that the negative impact of board homogeneity is due to overlapping views and networks of caste-proximate directors and cronyism impairing their monitoring and advising roles.

This paper examines the long-lasting impact of one of the deadliest pandemics in history on present-day financial development. Based on the variation in the severity of the 1918 influenza pandemic (Spanish flu) across the regions within Italy and the variation across 34 countries, we find that people living in the regions with higher historical death rates are associated with a lower level of present-day trust. As a result, firms in these regions face more financial obstacles and have greater difficulty in accessing both bank loans and trade credit. Furthermore, households in these regions display a lower take-up of credit cards and mortgages. They also use Fintech services less. Because laboratory results suggest that an avian H1N1 virus can form clear plaques at a lower temperature, we instrument the death rates with the temperature in autumn of 1918, and find the results remain consistent, confirming the causal link between the severity of the 1918 flu pandemic and present-day financial development.