We specify and estimate a no-arbitrage model for sovereign CDS contracts in which countries’ default intensities depend on economic and financial indicators. To facilitate identification and to distinguish the importance of local and global covariates, we estimate a model with three global and four local covariates using CDS spreads for five maturities and twenty-five countries. The model provides a good fit. The impact of the economic and financial variables on spreads is consistent with economic intuition, and substantially varies across countries and over time. Estimated risk premiums are highly variable and peak during the 2008 financial crisis for most countries.

For articles eventually published in the top twenty academic finance journals and top-tier academic business journals, I examine the acceptance time (the time from first-round submission to final-round acceptance) and online/print publication times (the time from first-round submission to online/print publication). I find that the median acceptance times of the top five general-interest finance journals are: Journal of Financial Economics (9.9 months), Journal of Financial and Quantitative Analysis (10.6 months), Review of Finance (11.7 months), Review of Financial Studies (15.5 months), and Journal of Finance (19.8 months). The three fastest in finance are Review of Corporate Finance Studies, Review of Asset Pricing Studies, and Financial Management. Journal of Finance is one of the slowest top-tier business journals. Large and significant time differences support the editorial differences hypothesis. Received December 14, 2016; editorial decision December 22, 2016 by Editor Paolo Fulghieri.

This paper examines the hypothesis that, during merger waves, a bidder’s actions provide information for other bidders and the market. I develop a real options model to explore the interplay between acquisition timing and the market reaction to these events. The model predicts a pattern of declining announcement returns along the merger wave and various forms of contagion returns. Consistent with the model’s predictions, in a sample of U.S. mergers, I find that the dispersion in bidders’ post-acquisition performance declines along the merger wave and that the start of a merger wave is associated with an increase in the conditional correlation of a bidder’s stock returns and the stock returns of other bidders. Received February 2, 2013; editorial decision March 1, 2017 by Editor Paolo Fulghieri

Is bank financing compatible with innovation? We show that an exogenous enhancement in the value of borrowers’ patents, either through greater patent protection or creditor rights over collateral, results in cheaper loans. Using regression discontinuity design, we show that although R&D investment sharply drops following a financial covenant violation, the reduction is concentrated in firms with less productive R&D. Consequently, R&D reduction does not impair innovative output. Our results suggest that the property rights that patents confer to intellectual property and to lenders’ judicious exercise of control rights allow bank loans to be a viable means of financing for innovative firms.

– Since corporate debt tends to be riskier in recessions, transfers from equity holders to debt holders that accompany corporate decisions also tend to concentrate in recessions. Such systematic risk exposures of debt overhang have important implications for corporate investment and financing decisions, and for the ex ante costs of debt overhang. Using a calibrated dynamic capital structure model, we show that the costs of debt overhang become higher in the presence of macroeconomic risk. We also provide several new predictions on how the cyclicality of a firm’s assets in place and growth options affect its investment and capital structure decisions.

Placing innovative assets in a separate subsidiary creates more autonomy for the unit manager of the innovation than a division, even when the subsidiary is wholly owned and controlled by the parent. The key driver is limited liability: unlike a division, the parent has the option to walk away from the subsidiary’s debt obligations. As a result, the parent invests less in developing internal uses for the innovation. This causes the unit manager to invest more in developing independent uses for the innovation: he must ”sink or swim” on his own effort, and his desired actions are less subject to overrule. Received June 29, 2012; editorial decision June 8, 2016 by Editor Paolo Fulghieri.

Journal Article The Review of Corporate Finance Studies Volume 6 Number 1 March 2017 – Table of Content Get access The Review of Corporate Finance Studies, Volume 6, Issue 1, March 2017, Page i4, https://doi.org/10.1093/rcfs/cfx004 Published: 11 September 2016

Journal Article Subscriptions Get access The Review of Corporate Finance Studies, Volume 6, Issue 1, March 2017, Page i3, https://doi.org/10.1093/rcfs/cfx003 Published: 11 September 2016

Journal Article The Review of Corporate Finance Studies Volume 6 • Number 1 • March 2017 – Front Cover Get access The Review of Corporate Finance Studies, Volume 6, Issue 1, March 2017, Page i1, https://doi.org/10.1093/rcfs/cfx001 Published: 11 September 2016

Journal Article Subscriptions Get access The Review of Corporate Finance Studies, Volume 6, Issue 2, September 2017, Page i3, https://doi.org/10.1093/rcfs/cfx007 Published: 18 August 2017