Oil price is a key direct and indirect factor in the cost of production and strongly influences the future cash flows, investment and revenue of a firm. Although many studies investigate the relationship between oil prices and corporate performance, limited evidence exists on how the oil prices influence corporate risk-taking. Using 190,490 firm-year observations covering 56 countries and spanning 1990 to 2013, we find that firms become risk-averse with rising oil prices. However, this relationship is conditional on the macroeconomic outlook. We show that with rising oil prices, firms increase (decrease) risk-taking if the macroeconomic outlook is favorable (unfavorable). Finally, firms operating in non-competitive industries tend to increase risk-taking with rising oil prices and favorable macroeconomic conditions. Our results are robust to controls for unobserved heterogeneity and alternate modelling procedures to deal with the nested nature of our data.

Australian companies pay dividends semi-annually with smaller “interim” payments and larger “final” payments. Interim dividends are declared and paid within a less full information environment than final dividends. We analyze the interactions between the timing of dividends and their information content, controlling for share repurchase and tax effects. Dividend reductions that are not associated with share repurchases are statistically significantly related to future abnormal earnings and provide strong support for the information content of dividend reductions. The percentage of dividend reduction is stronger for interim than for final dividend reductions. The market reaction is negatively related to the reduction in imputation tax credit and reacts more aggressively and negatively to interim as compared to final dividend reductions.

We study the impact of a firm's corporate ethical failures on its implied cost of equity using a comprehensive firm-level data from 44 countries. We find that corrupt corporate behavior significantly leads to a higher implied cost of equity, and capital markets play a bigger role in disciplining corrupt firms when institutional quality is weak. Our results are robust with alternate specifications and measurements. Given the recent increase in policy uncertainty globally, we also examine whether the impact of corruption on the cost of equity depends on the level of global policy uncertainty. We show that corruption has a more significant impact on the cost of equity when policy uncertainty is high.