FINANCIAL REVIEW最新文献

This study examines the impact of CEOs’ early disaster experiences on the choice of debt structure. We find that firms led by CEOs who have endured disasters are more inclined to shift from bank debt to public debt. This evidence remains robust across various alternative measures, empirical specifications, and identification tests aimed at mitigating endogeneity. The effect of CEOs’ early disaster experiences is more pronounced under specific institutional conditions. The effect strengthens with stricter regulatory oversight and lower unemployment risk, suggesting that institutional environments shape how personal experiences manifest in financial decisions. Overall, these findings suggest that the CEOs' inclination, shaped by early disasters, to take additional risk and seek greater autonomy, can have significant effects on corporate debt structure.

We evaluate the market reaction to the between-manager variance of tone within an earnings call, which we term Tone Distance. We find that greater differences in Tone Distance are negatively associated with event period returns surrounding earnings announcements. Consistent with the notion that Tone Distance is informative, we show that Tone Distance is a positive predictor of stock volatility, information uncertainty, and operational risks. Tone Distance is inversely related to future growth prospects. Tone Distance also positively predicts monthly stock returns following the earnings announcement. We find that Tone Distance is robust to a variety of alternative constructions and after accounting for analyst tone. Overall, the results are consistent with investors interpreting greater Tone Distance as an information leakage related to the future performance of the firm.

This paper investigates how resolution time affects firms under Chapter 11 protection. We find a robust negative association between a firm's resolution time and its probability of emergence, using several controls for endogeneity. The probability of emergence reduces by 0.4% for each month (or 4.8% per year) spent in bankruptcy. Firms filing during recessions have a lower likelihood of emergence. Conditional upon business cycles, the explanatory power of various determinants such as firm size, pre-packaged or pre-negotiated bankruptcy, and industry are found to be different. During economic recessions, firm size and pre-packaged or pre-negotiated filings have no significant impact on the probability of emergence.

Over the years, a big part of research in finance has been directed toward the development of new theories based on mathematical formalism. I review classic examples demonstrating the success of this approach, how it enabled transformation in analysis, and had spillovers to measurement, policy, and practice. I discuss the limitations of mathematical models and how these models should be evaluated. Finally, I argue that, despite the greater prevalence of data and empirical methods these days, there are still many opportunities for theory research. I provide some examples. Enabling these opportunities is critical for the continued progress of the field.

This paper examines how tax incentives create fundamentally different flow-performance relations for national and state-specific municipal bond mutual funds. We find that national funds, which invest in bonds across states and regions, exhibit strong concavity - outflows are more sensitive to poor performance than inflows to good performance. In contrast, investors in state-specific funds show greater leniency toward poor performance, particularly in states offering higher tax incentives for holding in-state bonds. By exploiting changes in state tax policy, we show this leniency diminishes when state tax rates decline, reducing these additional tax advantages. Our findings indicate that tax benefits moderate performance-driven outflows, which has direct implications for how effectively mutual funds can serve as stable intermediaries in the municipal bond market.

We present results of a survey of more than 300 European financial professionals on best practices in integrating environmental, social, and governance (ESG) factors into corporate valuations. We find external stakeholders, such as investment advisors and financial consultants, are significantly more likely than corporate insiders, such as those in controller and treasury roles, to employ ESG in valuation. Concerns abound among respondents about poor ESG data quality, but these are not correlated with their propensity to use ESG for their valuation models. Adjusting the discount rate appears to be the preferred mechanism in the valuation approaches adopted by respondents.

We find that the independent board leadership structure, where an independent director holds the board chairperson position, significantly reduces stock crash risk, especially in firms with high monitoring needs. Firms with this board structure appoint more financial experts to their audit committees, undergo fewer earnings restatements, and exhibit fewer unexpected negative earnings releases. Such firms are also more likely to replace CEOs if the firm experiences a stock crash. Our findings underscore the critical role of independent board leadership in mitigating stock crash risk, bolstering the argument for its broader adoption in corporate governance.