Journal of Corporate Finance最新文献

Effective board monitoring prevents entrenched managers from undertaking acquisitions that are detrimental to shareholders. It also facilitates a smooth transition during the post-acquisition phase. We examine how independent board leadership affects M&A outcomes. Controlling for many firm, board, and CEO attributes, we find that acquirers with independent board chairpersons earn significantly higher CAR around M&A announcements. The positive effects of independent board chairpersons are more pronounced in acquirers with high monitoring needs. The boards led by independent chairpersons primarily add value by selecting targets with high synergetic gains, avoiding overpaying for targets, and facilitating smooth transition in the post-acquisition phase.

We analyze how the materialization of physical climate risk in the institutional investors’ portfolios spurs a propagation effect on the information content of stock prices. Institutional investors with a relatively high portfolio exposure to natural disasters divest from disaster-hit stocks, decrease the trading intensity in non-hit stocks, and their trading decisions predict low medium-term returns. At the firm-level, institutional investors propagate the effects of disasters to non-hit stocks through reduced incorporation of firm-specific information, especially when the stocks represent a low portfolio weight. Combined, these results suggest that natural disasters trigger a rational reallocation of information-processing resources by institutional investors.

We find that local religious social norms mitigate professional misconduct by financial advisors. Using publicly disclosed misconduct data, we find that financial advisors working in areas with greater religious participation are less likely to violate ethical standards. When advisors move to counties with greater religious participation, their misconduct rates decrease. The effect of local religiosity is robust across population density levels, misconduct types, and market conditions. We strengthen identification by using shocks to religious participation following local disclosures of sexual abuse by Catholic priests. The findings show that local religiosity restrains misconduct not only in previously studied corporate financial settings but also when professionals provide financial services to individuals and households.

This study investigates whether insiders exploit the information advantage arising from customer identity concealment to profit from selling their shares. We examine this issue in the context of China, given the voluntary nature of customer information disclosure there. We find that insider selling profitability is significantly greater when firms conceal customer identities than when they disclose them, especially when customer identities are more informative. We also find evidence of significant trading profitability for both insiders and their relatives, as well as both core and general executives. Furthermore, we find that the results are weaker for firms with more effective internal monitoring and those with more attention from sophisticated market participants but are stronger for firms with more information disclosure manipulation. These findings are consistent with the hypothesis that insiders opportunistically trade on customer-related private information rather than unintentionally sell shares. In additional tests, we find that insiders deliberately conceal customer identities in response to their personal trading incentives, indicating that insiders may increase their information advantage through strategic customer information disclosure. Overall, our research sheds light on the black box of information sources of insider trading from the perspective of supply chains and the insider trading incentives behind firms' concealment of customer identities.

This paper examines how the impairment of main banks’ balance sheets affects corporate cash-holding behavior during the 2008 financial crisis using a firm–bank matched panel dataset of 2,520 firms in Japan. The major findings of this paper are as follows. First, the impairment of main banks increases firms’ cash holdings during this financial crisis. Second, this tendency is more pronounced among firms with limited financing sources and those with unstable main bank relationships. Third, holding large amounts of cash increases the value of firms with main bank impairment during the 2008 financial crisis.

Using a comprehensive sample of listed and unlisted firms from 34 European countries, we study firm-level manufacturing outcomes conditioned on foreign investment, country characteristics, and EU membership. Higher foreign ownership is associated with higher productivity but lower employment, particularly when the host or source country is an EU member and scores high on disclosure and investor protection, and low on corruption. We confirm our interpretation using staggered EU accession dates and industry-level external financial dependence interacted with a financial crisis. The subset of Eastern European countries appears to benefit from foreign investment and EU accession without losing jobs. Nevertheless, manufacturing outcomes associated with survey findings on public sentiment towards globalization and migration confirm the social and political costs of globalization.

We develop a computable general equilibrium model of firm capital structure that predicts countercyclical financing costs and procyclical financing. We extend the standard financial accelerator model by incorporating countercyclical uncertainty shocks and equity financing frictions capturing the moral hazard problem of profit diversion. In this environment, increased uncertainty restricts equity financing, resulting in a lower level of total equity, which in turn influences the debt contract. As a result of less equity utilization in the face of increased uncertainty, the default rate and debt financing costs increase, although firms reduce their investments. The amplified effect of uncertainty shocks on debt financing costs through the equity financing channel enables the model to predict countercyclical external financing costs. Existing financial accelerator models, on the other hand, cannot generate countercyclical financing costs without uncertainty amplification via equity financing, as TFP shocks, another source of business cycle, cause firms to reduce the size of business projects and, in turn, credit demand.

We identify a positive effect of patent pledgeability on corporate patenting. Our tests exploit staggered city-level policy changes that allow firms to use patents as collateral for financing. We find a significant increase in patents and patent citations for firms headquartered in cities that have adopted such policies relative to firms headquartered in cities that have not. We further show that patent pledgeability increases corporate patenting by inducing firms to shift from secrecy-based innovation to patent-based innovation, rather than by mitigating financial constraints.

We analyse the effects of the Pandemic Emergency Purchase Programme (PEPP) launched by the ECB after the burst of the Covid-19 pandemic. The effects of the programme were different from the previous asset purchases. The PEPP significantly reduced the yield on bonds that at the same time were eligible to the programme and showed a green label. Via a triple difference estimator, we show that this effect is additional to the outperformance of greens vs non-green bonds that also occurred in the set of non-eligible bonds. All in all, the estimated impact stands at 51 basis points, a value that is significant also from an economic point of view: around 20 per cent of the cost of issuing a bond. From a climate change perspective, this evidence suggests that asset purchase programmes are an effective way of supporting firms financing climate-friendly investments on the bond market. In addition, we find that the issuers that benefitted most from the PEPP improved their ESG performance to a larger extent than other issuers.

We examine how stock liquidity affects acquisitions. We hypothesize that liquidity enhances acquirer stock as an acquisition currency, especially when the target is relatively less liquid. As hypothesized, we find that more liquid firms have a greater likelihood of making stock acquisitions. Further, the difference in stock liquidity between acquirer and target firms increases payment with stock, reduces acquisition premiums, and improves acquirer announcement returns in equity deals. Consequently, firms take steps to improve stock liquidity prior to stock acquisitions. We use policy initiatives as exogenous shocks to firm liquidity to show that liquidity effects on acquisitions are plausibly causal.