Recent papers have debated whether the negative correlation between measures of firm asset growth and subsequent returns is of little importance since it applies only to small firms, is justified as compensation for risk, or is evidence of mispricing. We show that the asset growth effect is pervasive, and evidence to the contrary arises due to specification choices; that one measure of asset growth, the change in total assets, largely subsumes the explanatory power of other measures; that the ability of asset growth to explain either the cross section of returns or the time series of factor loadings is linked to firm idiosyncratic volatility (IVOL); that the return effect is concentrated around earnings announcements; and that analyst forecasts are systematically higher than realized earnings for faster growing firms. In general, there appears to be no asset growth effect in firms with low IVOL. Our findings are consistent with a mispricing-based explanation for the asset growth effect in which arbitrage costs allow the effect to persist.

We contend that high borrowing costs can overwhelm precautionary motives and induce low cash holdings in private firms. Supportive of our hypothesis, we find European private firms hold less cash than public firms and this differential relates to borrowing costs. Results are robust to endogeneity concerns and reveal private firms use cash flow to pay-down existing debt instead of building cash reserves. Further, stronger creditor rights and debt market development lead to convergence in cash policies of private and public firms.

We investigate how men and women fare in the managerial labor market in the plausibly exogenous circumstance of their firms being acquired when most target-firm managers (about 90%) are displaced. These career disruptions result in a larger drop in rank and compensation for female managers, despite similar job search attributes. Gender differences are mitigated when hiring firms have more women in upper-echelon positions. Rich managerial experience and external board service also reduce gender-related differences. Overall, results point to a (implicit) “gender penalty” in terms of managerial job mobility, but also indicate contexts in which penalty is alleviated, and even reversed.

Racial gap in corporate leadership has prompted continuous and intense discussions, motivating research into the conditions minorities face after they reach top management positions. We contribute to the ongoing debate in this area by examining the association between CEO race and compensation. We do not find evidence for a significant racial wage gap at the CEO level across various econometric specifications, including total-sample OLS, firm-fixed effects to capture CEO transitions within firm, propensity score matched sample, and instrumental variable analysis. The insignificant results hold for total compensation, cash compensation, and non-cash compensation. Further, there is no consistent evidence of differences in CEO compensation for any of the major racial groups (Blacks, Hispanics, and Asians). Based on our results, we conclude that racial minorities who make it to the CEO position in Corporate America are compensated at similar levels to their Caucasian counterparts.

In a sample of non-U.S. regulatory regime shifts, we find that expanded short selling is associated with stock price declines, reductions in capital expenditure, and lower asset growth. In a reversal of results found for U.S. stocks in a study of Regulation SHO by Grullon, Michenaud, and Weston (2015), our results are stronger for large firms than for small firms. We also show that this investment effect is stronger for firms that previously relied on outside financing. Our results suggest that short-sale policies affect corporate investment and that this effect is not driven by capital constraints.

In 2017, “The Big Three” institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led American corporations to add at least 2.5 times as many female directors in 2019 as they had in 2016. Firms increased diversity by identifying candidates beyond managers’ existing networks and by placing less emphasis on candidates’ executive experience. Firms also promoted more female directors to key board positions, indicating firms’ responses went beyond tokenism. Our results highlight index investors’ ability to effectuate broad-based governance changes and the impact of investor buy-in in increasing corporate-leadership diversity.