Journal of Corporate Finance最新文献

Using a novel dataset of firm product introductions, we examine whether public short campaigns (PSCs) have real impacts on targets. Targets introduce fewer new products and experience declines in productivity and product quality relative to matched firms following PSCs. These declines in product outcomes are partly attributed to the withdrawal of support from key stakeholders, resulting in reduced access to external capital, decreased employee commitment, and weakened customer relationships. Our results suggest that the public nature of PSCs has distinctive impacts on target firms compared to traditional short selling, primarily through their impact on the firm's stakeholders.

We examine the impact of mergers on drug prices and document significant differences between the post-merger pricing strategies of highly innovative pharmaceutical firms and other firms. While the former raise prices of overlapping drugs, especially brand name drugs that tend to be first-in-class and patented, we find pervasive evidence of price reductions by generic manufacturers. Our evidence suggests that the price reductions are due to cost cuts realized by less innovative firms in overlapping product spaces. We also show that less innovative acquirers cut R&D and shift product development from high-novelty products to cheaper, less-risky products.

The operating lease accounts for a large fraction of firms’ total productive physical capital and it is important for firms’ investment and real production. Empirical facts show that the aggregate productivity measure is an overestimation without considering leased capital (Hu et al., 2024). In this paper, I explore the effect of leased capital on aggregate productivity in general equilibrium. Leased capital can directly alleviate collateral constraints and mitigate capital misallocation, boosting aggregate productivity (Hu et al., 2020). However, leasing can lead to an increased demand for labor, driving up wages, which results in a decrease in the number of producing firms and their optimal capital scale. These indirect effects can lead to a decline in aggregate productivity. Quantitatively, the indirect effects dominate the direct effects with counterfactual leasing-improved policy, and thus aggregate productivity with leased capital decreases.

Corporate insiders have superior access to information; their trades, particularly purchases, should be informative. However, the extent of their informational advantage may be limited by the presence of other informed market participants. We document less frequent insider purchases in stocks with relatively high options trading activity. These purchases are followed by negligible abnormal returns. In contrast, stocks with less active options trading experience more frequent insider purchases, which yield positive abnormal returns over the subsequent six months. Our novel approach highlights the options market's role in screening uninformed insider trades, which ultimately contributes to more efficient stock market price formation.

We study the political determinants of the world's largest privatization program by exploiting an age-related discontinuity of politician promotion in China. As a local politician's age exceeds 58, his promotion likelihood quickly diminishes. Consistent with changes in the politician's incentives, we find that Chinese cities whose top officials were older than age 58 were less likely to privatize local state-owned enterprises. Using the promotion discontinuity as an instrument, we report that privatization has significant effects on the firm's efficiency.

The MiFID II regulation led to the unbundling of research and execution costs in Europe starting in 2018. We exploit the early adoption of an unbundling rule in Sweden in 2016 to provide evidence on the implications of unbundling for fund investors. Using a difference-in-differences framework and hand-collected data on bundled and unbundled commissions, we find no economically meaningful effect of unbundling on commissions. When we split the sample into more active and less active funds, we find that fund costs of more active funds increased in relative terms. Finally, we do not find evidence that the increased transparency of observing execution and research costs led to improved fund performance or information gains for investors’ fund selection process. Overall, our results suggest that investors did not significantly benefit from the unbundling of commissions.

This study examines the impact of the Tax Cuts and Jobs Act of 2017 (TCJA) on U.S. corporate investment. We examine U.S. firms and compare them to Canadian firms from 2010 to 2019 in a multivariate firm fixed-effects difference-in-differences analysis. Our results indicate that investment increases for U.S. firms relative to Canadian firms after the tax cuts. We also find that capital intensive and financially constrained firms increase investment the most. We explore how the TCJA impacted firm payouts and find some evidence that the tax cuts are associated with increased dividends. The paper contributes to the literature by providing evidence on the effects of the TCJA on corporate investment which have been debated extensively by politicians, journalists, tax policy experts, and academics.

Analyzing the complex financial landscape of multi-segment conglomerates requires a more nuanced approach than that required for single-segment firms. This paper reveals that conglomerates strategically enhance their transparency by voluntarily disclosing more information to compensate for their business complexity. This finding is particularly pronounced when there is an increased demand for information from stakeholders and analysts or when the executive pay-performance sensitivity is higher. By strategically embracing transparency, conglomerates transform the complexities inherent in their financial reporting into a catalyst for higher valuation and lower capital costs. Overall, our study demonstrates that multi-segment firms tactically deploy voluntary disclosure to navigate their intricate business environment effectively.

A firm's working-capital account balances demonstrate substantial connections with its financial policy. Receivables and inventories are associated with lower asset volatility and higher future cash flow, and correlate with increased leverage. Conversely, payables show a positive association with shareholder return volatility and a negative correlation with future cash flow and are linked to decreased debt levels. In dynamic panel regressions estimated with system Generalized Method of Moments (GMM), a one standard-deviation increase in payables (receivables) is associated with a 0.42 (0.66) standard-deviation decrease (increase) in leverage. Furthermore, higher levels of inventories and receivables are linked with higher firm credit ratings, along with a preference for debt financing over equity issuance, while increased payables are linked with lower credit ratings and a tendency to favor equity financing over debt financing. The QuickPay regulatory shock, expediting payments and reducing receivables' volume and quality, diminished their collateral role and lowered debt sensitivity to receivables.

This paper examines the effect of board reforms on corporate acquisition performance using data from 31 countries. Using a difference-in-differences design, we find that the implementation of board reforms in the acquirer's country significantly increases acquirer returns. The increase is driven by reforms involving board independence, but not reforms involving audit committee independence nor the separation of CEO and board chair roles. Further analysis shows that the uplift in acquisition performance following improvements in board independence is strongest in acquirers with more agency problems. The ‘Board reform strengthening’ effect is concentrated in larger acquirers, with more free cash flows, executing large and public-target deals and operating in countries with ex-ante poor investor protection. The empirical evidence indicates that reforming board independence effectively alleviates agency problems between managers and shareholders and improves corporate acquisition performance.