Using a novel typology of serial acquirers, we examine several puzzles documented in the prior literature. We show that acquisitions by different types of acquirers are driven by different factors, they acquire different sizes of targets, and subsequent acquisitions by acquirers are predictable ex ante. Controlling for market anticipation, the most frequent serial acquirers do not earn declining returns as they continue acquiring, while less frequent acquirers do. Our methodology enhances our understanding of serial acquisition dynamics, anticipation, and economic value adjustments. The methodology is likely to be relevant to topics related to event anticipation beyond those covered in this study.
{"title":"Solving Serial Acquirer Puzzles","authors":"Antonio J. Macias, P. Rau, Aris Stouraitis","doi":"10.1093/rcfs/cfad015","DOIUrl":"https://doi.org/10.1093/rcfs/cfad015","url":null,"abstract":"\u0000 Using a novel typology of serial acquirers, we examine several puzzles documented in the prior literature. We show that acquisitions by different types of acquirers are driven by different factors, they acquire different sizes of targets, and subsequent acquisitions by acquirers are predictable ex ante. Controlling for market anticipation, the most frequent serial acquirers do not earn declining returns as they continue acquiring, while less frequent acquirers do. Our methodology enhances our understanding of serial acquisition dynamics, anticipation, and economic value adjustments. The methodology is likely to be relevant to topics related to event anticipation beyond those covered in this study.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":" ","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45657516","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze shareholder activism by “quasi-insiders”: founders, former executives, and other individuals tangentially connected to a firm. These individuals seek control in their campaigns, use aggressive tactics, and target smaller, poorly performing firms. Their campaigns are associated with positive announcement returns. Former CEOs who engage in campaigns often depart from the target under negative circumstances before launching their campaigns soon afterward. Our results suggest that insiders at the periphery of control may intervene in firms too small for traditional activists to target.
{"title":"Quasi-Insider Shareholder Activism: Corporate Governance at the Periphery of Control","authors":"Jonathan Cohn, Mitch Towner, Aazam Virani","doi":"10.1093/rcfs/cfad016","DOIUrl":"https://doi.org/10.1093/rcfs/cfad016","url":null,"abstract":"We analyze shareholder activism by “quasi-insiders”: founders, former executives, and other individuals tangentially connected to a firm. These individuals seek control in their campaigns, use aggressive tactics, and target smaller, poorly performing firms. Their campaigns are associated with positive announcement returns. Former CEOs who engage in campaigns often depart from the target under negative circumstances before launching their campaigns soon afterward. Our results suggest that insiders at the periphery of control may intervene in firms too small for traditional activists to target.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"4 1","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138530551","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is mixed evidence on whether the marginal dollar spent on corporate social responsibility is due to agency problems. We propose an approach by modeling how the 2003 dividend tax cut, which increased after-tax insider ownership and better aligned managerial and shareholder interests, affected the marginal dollar spent on firm responsibility. We confirm key predictions of our agency model: following the tax cut, moderate insider-ownership firms experience larger declines in their responsibility ratings and increases in their valuations relative to other firms. We also confirm another implication regarding managerial misalignment using a regression-discontinuity design of close votes on shareholder-governance proposals.
{"title":"Do Managers Do Good with Other People’s Money?","authors":"Ing-Haw Cheng, Harrison G. Hong, K. Shue","doi":"10.3386/w19432","DOIUrl":"https://doi.org/10.3386/w19432","url":null,"abstract":"\u0000 There is mixed evidence on whether the marginal dollar spent on corporate social responsibility is due to agency problems. We propose an approach by modeling how the 2003 dividend tax cut, which increased after-tax insider ownership and better aligned managerial and shareholder interests, affected the marginal dollar spent on firm responsibility. We confirm key predictions of our agency model: following the tax cut, moderate insider-ownership firms experience larger declines in their responsibility ratings and increases in their valuations relative to other firms. We also confirm another implication regarding managerial misalignment using a regression-discontinuity design of close votes on shareholder-governance proposals.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"1 1","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.3386/w19432","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43200310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the effect of short sellers on corporate innovation. To establish causality, we use a policy experiment that exogenously removes the short-selling constraint for a randomly selected subsample of Russell 3000 firms. We find that innovation quality, value, and efficiency of treatment firms improve significantly more than do control firms surrounding the policy shock. The exposure to patenting-related litigation initiated by short sellers is a plausible underlying mechanism through which short sellers discipline firm managers and enhance innovation. Our paper provides new insights into an unintended real effect of short sellers, specifically their improvement of technological innovation.
{"title":"Do Short Sellers Affect Corporate Innovation? Evidence from a Policy Experiment","authors":"Jie He, Xiao Ren, X. Tian","doi":"10.1093/rcfs/cfad007","DOIUrl":"https://doi.org/10.1093/rcfs/cfad007","url":null,"abstract":"\u0000 We examine the effect of short sellers on corporate innovation. To establish causality, we use a policy experiment that exogenously removes the short-selling constraint for a randomly selected subsample of Russell 3000 firms. We find that innovation quality, value, and efficiency of treatment firms improve significantly more than do control firms surrounding the policy shock. The exposure to patenting-related litigation initiated by short sellers is a plausible underlying mechanism through which short sellers discipline firm managers and enhance innovation. Our paper provides new insights into an unintended real effect of short sellers, specifically their improvement of technological innovation.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":" ","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43299918","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Deposit insurance premiums impose costs on banks' balance sheets, narrowing profit margins and inducing banks to “search for yield”. This paper estimates the effects of deposit insurance premiums on bank portfolio rebalancing using supervisory data and a kink in the insurance premium schedule. We show that deposit insurance premiums weaken banks' demand for reserves (a liquid asset with no credit risk) and strengthen the supply of short-term interbank loans (a less liquid asset with credit risk). We discuss the implications of these findings for optimal deposit insurance pricing.
{"title":"Deposit Insurance Premiums and Bank Risk","authors":"Edward T. Kim, Marcelo Rezende","doi":"10.1093/rcfs/cfad004","DOIUrl":"https://doi.org/10.1093/rcfs/cfad004","url":null,"abstract":"\u0000 Deposit insurance premiums impose costs on banks' balance sheets, narrowing profit margins and inducing banks to “search for yield”. This paper estimates the effects of deposit insurance premiums on bank portfolio rebalancing using supervisory data and a kink in the insurance premium schedule. We show that deposit insurance premiums weaken banks' demand for reserves (a liquid asset with no credit risk) and strengthen the supply of short-term interbank loans (a less liquid asset with credit risk). We discuss the implications of these findings for optimal deposit insurance pricing.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"1 1","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"61068611","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Investigating the Academic Response to Cryptocurrencies: Insights from Research Diversification as Separated by Journal Ranking","authors":"Shaen Corbet, Les Oxley","doi":"10.1561/114.00000049","DOIUrl":"https://doi.org/10.1561/114.00000049","url":null,"abstract":"","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"224 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135361913","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dimitris K. Chronopoulos, E. Johari, A. Sobiech, John O. S. Wilson
{"title":"Payouts and Future Bank Profitability: The Role of Capital Distribution Plans","authors":"Dimitris K. Chronopoulos, E. Johari, A. Sobiech, John O. S. Wilson","doi":"10.1561/114.00000044","DOIUrl":"https://doi.org/10.1561/114.00000044","url":null,"abstract":"","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"2 1","pages":""},"PeriodicalIF":11.3,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89876513","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
John W. Goodell, Andrea Paltrinieri, Stefano Piserà
{"title":"Comparing Search-Engine Intensity and Regulatory Attention Impacts on Cryptocurrencies: Uncovering Important Heterogeneities","authors":"John W. Goodell, Andrea Paltrinieri, Stefano Piserà","doi":"10.1561/114.000000051","DOIUrl":"https://doi.org/10.1561/114.000000051","url":null,"abstract":"","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135361661","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Cristiano Bellavitis, Christian Fisch, Silvio Vismara
{"title":"Monetary Policy and Venture Capital Markets","authors":"Cristiano Bellavitis, Christian Fisch, Silvio Vismara","doi":"10.1561/114.00000053","DOIUrl":"https://doi.org/10.1561/114.00000053","url":null,"abstract":"","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135361927","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
John W. Goodell, Andrea Paltrinieri, Stefano Piserà
{"title":"Comparing Search-Engine Intensity and Regulatory Attention Impacts on Cryptocurrencies: Uncovering Important Heterogeneities","authors":"John W. Goodell, Andrea Paltrinieri, Stefano Piserà","doi":"10.1561/114.00000051","DOIUrl":"https://doi.org/10.1561/114.00000051","url":null,"abstract":"","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"238 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135784735","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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