In Woke Capital Revisited, a symposium piece connected with the 2022 Berle Conference, I argue that an expanded definition of corporate purpose and the social expectation of how public companies should act have created an environment where corporations now play an increasingly prominent role in diversifying leadership. However, the scope of how widely inclusive corporate… Read More »
Using accounting discretion to smooth earnings is believed to be pervasive. For example, in an influential survey of CFOs, 96.9% of respondents indicate a preference for reporting smooth earnings. The underlying motives and desirability of this phenomenon, however, remain up for debate. Under one interpretation, managers smooth earnings to mask poor decision making or rent… Read More »
In a new study, we investigate the relationship between executives who exploit their position in the firm to reduce their tax liabilities (i.e., “personally tax aggressive” executives) and corporate violations across various activities, including workplace safety and environmental regulations. Specifically, we examine executives who consistently gift corporate stock at or near the maximum of the… Read More »
At its core, the economy’s essential role is to allocate resources toward the most productive investment prospects. Traditionally, stock markets have been particularly efficient at allocating capital to firms with the most promising investment projects. In recent times, however, private equity (PE) markets have experienced significant expansion and have provided more capital through private than… Read More »
Privately owned companies far outnumber public ones. They constitute the lion’s share of the companies in our world and, accordingly, have a comprehensive impact on commercial reality. There are over 25,000,000 private companies in the U.S. and around 4,000 public ones. Furthermore, while the number of public corporations is lower than its peak in the… Read More »
Decentralized Finance (“DeFi”) has grown in popularity due to its promise that it will, as its name suggests, disintermediate traditional finance structures. Total Value Locked, which represents all deposits in various DeFi platforms, grew from $1 billion in June 2020 to a peak of almost $200 billion in November 2021. As of April 2023, almost… Read More »
Over the past few decades, the ownership structure of American firms has undergone a significant transformation. Gone are the days of dispersed ownership, where most firms were owned by thousands of individuals directly investing their savings in the stock exchange. Instead, we now have a complex web of institutional investors and powerful individual or family… Read More »
Poison pills are one of the most powerful ways of deterring hostile takeovers. Their goal is to make a hostile takeover so unattractive and expensive that the potential acquirer is deterred from pursuing the acquisition. When a hostile takeover threat arises, e.g., because a hostile acquirer’s ownership in the firm exceeded 20%, the poison pill… Read More »
Do firms engage in political competition in environmental lobbying when they have opposing environmental stances? If yes, is there any deadweight loss of corporate value and social resources due to such political competition? Our recent working paper theoretically and empirically explores how firms can compete to capture an environmental policy through lobbying. Corporate lobbying is… Read More »
Corporate bankruptcy law is a tool to resolve the financial distress of corporations. Unviable corporations are liquidated and the proceeds distributed to the creditors. Viable corporations are restructured and put on a new financial footing. Following the model of Chapter 11 of the US Bankruptcy Code, many jurisdictions worldwide have strengthened or introduced such restructuring… Read More »
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