ABSTRACT Using novel data from the pharmaceutical industry, we study product prices and innovation around mergers. Exploiting within‐deal variation in product market consolidation, we show that prices increase more for drugs in consolidating markets than for matched control drugs. Estimates indicate a 2% average price effect that persists for about one year. Price increases expand with acquirer‐target product similarity and are more pronounced within less competitive product markets with fewer players and no generic competition. Examination of trade‐offs reveals these deals generate significant shareholder value. They also spur labeling and other manufacturing‐related innovation, but not the development of new drugs.

This paper examines whether and how public environmental enforcement affects private lenders’ monitoring efforts and the effectiveness of such monitoring. We capture lender monitoring using environmental covenants in loan agreements. Consistent with the prediction that stringent public environmental enforcement increases lenders’ monitoring incentives, we find that in the presence of higher environmental regulatory enforcement intensity, lenders are more likely to use environmental covenants when lending to polluting borrowers and when the loans are secured by real property collateral. Moreover, consistent with the prediction that stringent public environmental enforcement facilitates lender monitoring, we find that environmental covenants are more effective in reducing borrowers’ toxic chemical releases when environmental regulatory enforcement is stronger. Taken together, our findings corroborate the importance of public environmental enforcement in inducing lenders’ monitoring efforts, as well as the joint role of public enforcement and private lender monitoring in curbing corporate pollution.

Using data from 2002 to 2013, we show that algorithmic trading has a positive impact on firm value. Most of this positive impact flows through the channels of stock liquidity, idiosyncratic volatility, and idiosyncratic skewness, but algorithmic trading also has a large economic effect outside those channels. We use the advent of auto quotation on the New York Stock Exchange as an exogenous shock to algorithmic trading to rule out reverse causality. The positive effects of algorithmic trading on firm value are stronger for larger firms and in the post-2007 period when algorithmic trading intensity is higher.