| 1. |
- Adams, Renée, B., et al.
(författare)
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A Theory of Friendly Boards
- 2007
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Ingår i: Journal of Finance. - : Blackwell Publishing Inc. - 1540-6261 .- 0022-1082. ; 62:1, s. 217-250
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Tidskriftsartikel (refereegranskat)abstract
- We analyze the consequences of the board's dual role as advisor as well as monitor of management. Given this dual role, the CEO faces a trade-off in disclosing information to the board: If he reveals his information, he receives better advice; however, an informed board will also monitor him more intensively. Since an independent board is a tougher monitor, the CEO may be reluctant to share information with it. Thus, management-friendly boards can be optimal. Using the insights from the model, we analyze the differences between sole and dual board systems. We highlight several policy implications of our analysis.
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| 2. |
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| 3. |
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| 4. |
- Friberg, Richard, et al.
(författare)
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Exchange rates and cash flows in differentiated product industries : a simulation approach
- 2007
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Ingår i: Journal of Finance. - : Wiley: No OnlineOpen. - 1540-6261 .- 0022-1082. ; 62:5, s. 2475-2502
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Tidskriftsartikel (refereegranskat)abstract
- How do exchange rate changes impact firms' cash flows? We extend a simulation method developed in industrial organization to answer this question. We use prices, quantities, and product characteristics for differentiated products, coupled with a discrete choice framework and an assumption of price competition, to estimate marginal costs for all producers. Using a Monte Carlo approach we generate counterfactual prices and profits for different levels of exchange rates. We illustrate the method using the market for bottled water. Our results stress that even in a relatively simple market such as this one, different brands face very different exchange rate risks.
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| 5. |
- Johannesson, Magnus, et al.
(författare)
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Genetic Variation in Financial Decision-Making
- 2010
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Ingår i: Journal of Finance. - : Wiley. - 1540-6261 .- 0022-1082. ; 65:5, s. 1725-1754
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Tidskriftsartikel (refereegranskat)abstract
- Individuals differ in how they construct their investment portfolios, yet empirical models of portfolio risk typically account only for a small portion of the cross-sectional variance. This paper asks whether genetic variation can explain some of these individual differences. Following a major pension reform Swedish adults had to form a portfolio from a large menu of funds. We match data on these investment decisions with the Swedish Twin Registry and find that approximately 25% of individual variation in portfolio risk is due to genetic variation. We also find that these results extend to several other aspects of financial decision-making.
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| 6. |
- Kaplan, Steven N, et al.
(författare)
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Should Investors Bet on the Jockey or the Horse? Evidence from the Evolution of Firms from Early Business Plans to Public Companies
- 2009
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Ingår i: Journal of Finance. - : Wiley. - 1540-6261 .- 0022-1082. ; 64:1, s. 75-115
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Tidskriftsartikel (refereegranskat)abstract
- We study how firm characteristics evolve from early business plan to initial public of-fering (IPO) to public company for 50 venture capital (VC)-financed companies. Firmbusiness lines remain remarkably stable while management turnover is substantial.Management turnover is positively related to alienable asset formation. We obtain similar results using all 2004 IPOs, suggesting that our main results are not specific to VC-backed firms or the time period. The results suggest that, at the margin, in-vestors in start-ups should place more weight on the business (“the horse”) than onthe management team (“the jockey”). The results also inform theories of the firm.
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| 7. |
- Strömberg, Per, et al.
(författare)
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Private Equity and Long-Run Investment : The Case of Innovation
- 2011
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Ingår i: Journal of Finance. - : Wiley. - 1540-6261 .- 0022-1082. ; 66:2, s. 445-477
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Tidskriftsartikel (refereegranskat)abstract
- A long-standing controversy is whether leveraged buyouts (LBOs) relieve managers from short-term pressures from public shareholders, or whether LBO funds themselves sacrifice long-term growth to boost short-term performance. We examine one form of long-run activity, namely, investments in innovation as measured by patenting activity. Based on 472 LBO transactions, we find no evidence that LBOs sacrifice long-term investments. LBO firm patents are more cited (a proxy for economic importance), show no shifts in the fundamental nature of the research, and become more concentrated in important areas of companies' innovative portfolios.
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| 8. |
- Vlachos, Jonas, 1970-, et al.
(författare)
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Do Entrenched Managers Pay their Workers More?
- 2009
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Ingår i: Journal of Finance. - : Wiley. - 0022-1082 .- 1540-6261. ; 64:1, s. 309-339
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Tidskriftsartikel (refereegranskat)abstract
- Analyzing a panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers' pay. CEOs with more control pay their workers more, but financial incentives through cash flow rights ownership mitigate such behavior. Entrenched CEOs pay more to employees closer to them in the corporate hierarchy, geographically closer to the headquarters, and associated with conflict-inclined unions. The evidence is consistent with entrenched CEOs paying more to enjoy private benefits such as lower effort wage bargaining and improved social relations with employees. Our results show that managerial ownership and corporate governance can play an important role for employee compensation.
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| 9. |
- Axelson, Ulf, et al.
(författare)
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Borrow cheap, buy high? : the determinants of leverage and pricing in buyouts
- 2013
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Ingår i: Journal of Finance. - : Wiley: No OnlineOpen. - 1540-6261 .- 0022-1082. ; 68:6, s. 2223-2267
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Tidskriftsartikel (refereegranskat)abstract
- Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, international sample of buyouts from 1980 to 2008, we find that buyout leverage is unrelated to the cross-sectional factors, suggested by traditional capital structure theories, that drive public firm leverage. Instead, variation in economy-wide credit conditions is the main determinant of leverage in buyouts. Higher deal leverage is associated with higher transaction prices and lower buyout fund returns, suggesting that acquirers overpay when access to credit is easier.
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| 10. |
- Baghai, Ramin, et al.
(författare)
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Have Rating Agencies Become More Conservative? Implications for Capital Structure and Debt Pricing
- 2014
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Ingår i: Journal of Finance. - : Wiley: No OnlineOpen. - 1540-6261 .- 0022-1082. ; 69:5, s. 1961-2005
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Tidskriftsartikel (refereegranskat)abstract
- We show that rating agencies have become more conservative in assigning credit ratings to corporations over the period 1985 to 2009. Holding firm characteristics constant, average ratings have dropped by three notches (e.g., from A to BBB ) over time. Consistent with the view that this change has not been fully warranted, we find that defaults for both investment grade and non-investment grade firms have declined over time. The increased stringency has also affected capital structure, cash holdings, growth, and debt spreads. Firms that suffer more from this conservatism issue less debt, have lower leverage, and hold more cash; they are also less likely to obtain a debt rating and they experience lower sales growth. However, their debt spreads are lower compared to the spreads of firms with the same rating that have not suffered from this conservatism, which implies that the market partly undoes the impact of conservatism on debt prices. This evidence suggests that firms and capital markets do not perceive the increase in conservatism to be fully warranted.
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