Introduction, 108. — I. The three approaches and the issues facing them, 109. — II. Similar objectives will require different policies, 114. — III. Contrast between development strategy and benefit-cost analysis, 117. — IV. Conclusion, 119.

We use the staggered deregulation of interstate banking in the U.S. to show that CEOs who have gained career experience at multiple banks are more likely to pursue acquisitions when competition intensifies. Acquisitions completed by these CEOs perform better than those led by CEOs whose career experience is confined to a single institution. Analyzing the sources of performance gains, we find that CEOs with greater across-bank experience are more effective at identifying and integrating dissimilar targets. Our findings cannot be explained by other formative CEO experiences or a CEO general ability. The results highlight the importance of externally versus internally acquired experience in explaining how managers respond to a competitive shock.

Does capital structure influence firms' FDI capital expenditure decisions into countries with varying degrees of political risk? We explore this question using a novel dataset that matches 10,000 unique outward foreign direct investment (OFDI) projects with 1135 distinct U.S. firms over the period 2003–2014. We find that capital expenditures allocated to FDI projects are significantly lower for highly leveraged firms, in particular for firms with low growth opportunities. Firms also commit lower capital amounts to investments located in countries characterized by higher political risk. Furthermore, leverage and political risk interact with one another in determining the financial commitment of the FDI, with leverage exerting a significantly stronger negative effect on capital expenditures in countries where political risk is elevated. Our findings are consistent with the monitoring role of debt in curbing exposure to political risk in multinational firms' foreign operations, and corroborate the disciplinary role of leverage on firms' investment decisions.

Exploiting a unique hand-built dataset, this paper finds that CEO educational attainment, both level and quality, matters for bank performance. We offer robust evidence that banks led by CEOs with MBAs outperform their peers. Such CEOs improve performance when compensation structures are geared towards greater risk-taking incentives, and when banks follow riskier or more innovative business models. Our findings suggest that management education delivers skills enabling CEOs to manage increasingly larger and complex banking firms and achieve successful performance outcomes.