A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Results 511 resources
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We examine whether bilateral investment treaties (BITs), an external governance mechanism, stimulate cross-border mergers by protecting the property rights of foreign acquirers. Exploiting the staggered adoption and bilateral nature of the treaties, we find that BITs have a large positive effect on cross-border mergers. The probability and dollar volume of mergers between two given countries more than doubles after the signing of a BIT. The increase is driven by deals flowing from developed economies to developing economies and is concentrated in target countries with medium levels of political risk. The results suggest BITs are effective in expanding the global market for corporate control, particularly in the developing world.
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The federal government encourages human capital investment through lending and grant programs, but resources from these programs may also finance non-education activities for liquidity-constrained students. To explore this possibility, we use administrative data for federal student borrowers linked to tax records and a sharp discontinuity generated by the timing of a student's 24th birthday, which induces a jump in federal support. We estimate a corresponding increase in homeownership, with larger effects among those most financially constrained, and find supplemental evidence of lagged marriage and fertility effects. Analysis of earnings, savings, and heterogeneity favors liquidity over human capital in explaining the results.
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Borrowing from multiple creditors exposes firms to rollover risk due to coordination problems among creditors, but it also improves firms' repayment incentives, thereby increasing pledgeability. Based on this trade‐off, I develop a dynamic debt rollover model to analyze the evolution of creditor dispersion. Consistent with empirical evidence, I find that firms optimally increase creditor dispersion after poor performance. In contrast, cross‐sectionally higher‐growth firms can support more dispersed creditors. Frequent debt renegotiation limits firms' ability to increase pledgeability by having more creditors. Finally, holding a cash balance while borrowing from multiple creditors improves firms' repayment incentives uniformly across all future states.
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Multiple borrowing—when borrower obtains overlapping loans from multiple lenders—is a common phenomenon in many credit markets. We build a tractable, dynamic model of multiple borrowing and show that, because overlapping creditors can impose default externalities on each other, expanding financial access by introducing more lenders can backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient endeavors with low returns to scale. These problems are exacerbated when investments become more pledgeable or when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.
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Liquidity restrictions on investors, like the redemption gates and liquidity fees introduced in the 2016 money market fund (MMF) reform, are meant to improve financial stability. However, we find evidence that such liquidity restrictions exacerbated the run on prime MMFs during the COVID-19 crisis. Our results indicate that gates and fees could generate strategic complementarities among investors in crisis times. Severe outflows from prime MMFs led the Federal Reserve to intervene with the Money Market Mutual Fund Liquidity Facility (MMLF). Using MMLF microdata, we show how the provision of “liquidity of last resort” stabilized prime funds.
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We estimate the degree to which individual police officers practice racial discrimination. Using a bunching estimation design and data from the Florida Highway Patrol, we show that minorities are less likely to receive a discount on their speeding tickets than White drivers. Disaggregating this difference to the individual police officer, we estimate that 42 percent of officers practice discrimination. We then apply our officer-level discrimination measures to various policy-relevant questions in the literature. In particular, reassigning officers across locations based on their lenience can effectively reduce the aggregate disparity in treatment.
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Lou and Shu decompose Amihud’s illiquidity measure (ILLIQ) proposing that its component, the average of inverse dollar trading volume (IDVOL), is sufficient to explain the pricing of illiquidity. Their decomposition misses a component of ILLIQ that is related to illiquidity. We find that this component affects stock returns significantly, both in the cross-section and in time-series. We show that the ILLIQ premium is significantly positive after controlling for mispricing, sentiment, and seasonality. In addition, the aggregate market ILLIQ outperforms market IDVOL in estimating the effect of market illiquidity shocks on realized stock returns.
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Permissionless blockchains require a protocol to generate consensus. Many prominent permissionless blockchains employ Proof-of-Work (PoW) for that purpose, but PoW possesses significant shortcomings. Various alternatives have been proposed. This paper provides the first formal economic model of the most famous alternative, Proof-of-Stake (PoS), and establishes conditions under which PoS generates consensus. A sufficiently modest reward schedule not only implies the existence of an equilibrium in which consensus obtains as soon as possible but also precludes a persistent forking equilibrium. The latter result arises because PoS, unlike PoW, requires that validators are also stakeholders.
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Management companies assign some portfolio managers to run funds within a single investment objective (i.e., specialists), and others to run funds across several investment objectives (i.e., generalists). Our results show that funds achieve higher performance when they appoint superior pickers as specialists and market timers as generalists. We argue that these decisions are the result of a better match of manager mandates with the way information is collected and processed in each investment strategy. Overall our results are consistent with decision-making in fund families that add value to their investors by aiming to optimally assign or reassign portfolio managers.
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Journals
- American Economic Review (115)
- Journal of Finance (74)
- Journal of Financial Economics (205)
- Review of Financial Studies (117)
Topic
- Bond (41)
- CEO (9)
- Director (6)
- Mergers and Acquisitions (4)
- Capital Structure (3)
Resource type
- Journal Article (511)