Tag Archives: Economics

Can Elon Musk’s SpaceX Raise More Equity Capital Without Going Public?

By | January 25, 2024

Elon Musk’s SpaceX, a pioneering company in reusable rockets and spacecraft design, continues to rank as one of the most valuable private companies in the world. According to Bloomberg, its valuation nears 180 billion dollars, over 100 times that of a “unicorn”— a private company that is valued at over one billion dollars. To date,… Read More »

Regulatory Transparency and Regulators’ Effort: Evidence from Public Release of the SEC’s Review Work 

By | January 18, 2024

Regulators face near-zero competition and exit threats. Thus, agency problems are more likely to occur when information asymmetry exists between regulators and constituents (Stiglitz 1999; Coffee 2007). If information asymmetry exacerbates moral hazard in the regulatory context, then the question is whether regulatory transparency can reduce moral hazard and improve regulator accountability. After all, regulators… Read More »

How can tax rules shape the global market for corporate control and overall economic growth? The case of anti-loss trafficking rules

By | January 17, 2024

2021 saw a remarkable surge in the global market for corporate control, with a record number of 65,000 mergers and acquisitions (M&A). Among other factors, tax rules play an important role in shaping the probability and structure of M&A transactions. In 2008, the temporary suspension of limitations on tax loss transfers led to a substantial… Read More »

Regulating Choice Architecture with Behavioral Audits

By | January 16, 2024

Regulation of behavioral science is coming. The Biden Administration has committed to tackling “junk fees” which emerge from deceptive, online behavioral design practices, as has the Federal Trade Commission. In the UK, the Competition and Markets Authority (CMA) is increasingly concerned with harms arising from ‘behavioral design’ and ‘choice architecture’. So too is the European… Read More »

Talk vs. Walk: Lessons from Silent Sustainable Investing of Mutual Funds 

By | January 12, 2024

In response to the escalating demand for sustainable investment options, the mutual fund industry is actively integrating sustainability into investment strategies and has introduced numerous financial products focused on sustainable investing. Consequently, mutual funds in capital markets can generally be categorized into two groups: self-identified ESG funds and non-ESG funds. Notably, over 70% of the… Read More »

Financing Green Transition: Bank-Nonbank Partnership  

By | January 11, 2024

At their current levels, sustainable investments are considerably below the levels needed to achieve decarbonization and the targets of the Paris Agreement. The World Economic Forum suggests that, to meet these goals, investments in nature-based solutions must quadruple by 2050, resulting in an annual investment exceeding $536 billion. Several strategies have been proposed, emphasizing the… Read More »

Non-Financial Liabilities and Effective Corporate Restructuring 

By | December 14, 2023

The system for managing corporate insolvency varies in fundamental ways between countries, with important effects on economic outcomes. Chapter 11 of the U.S. Bankruptcy Code forms the legal basis of the successful American regime, which can handle distress in a formal process without liquidating assets, closing businesses, and with limited job losses. Many countries aim… Read More »

Business Succession Planning Using a Purpose Trust

By | December 13, 2023

With nearly 2.7 million U.S. businesses owned by baby boomers,1 succession planning for these businesses has become critically important. For some owners, the next generation of the family has both the interest and the ability to continue to manage the business. For other owners, the sale of the business to a third party will be… Read More »

Are public health policies associated with corporate innovation? Evidence from U.S. nonsmoking laws 

By | December 12, 2023

Fostering a culture of innovation is paramount for the sustained growth of the global economy. Achieving innovative outcomes, however, is not easy. Prior research has extensively examined the effect of various regulations, firm characteristics, and incentive structures that are designed to increase innovation, many of which have limited effect. We add to this research by… Read More »

After the “Partner Run”: the Dewey & LeBoeuf Diaspora 

By | December 11, 2023

Law firms are distinctive creatures. The worker-owned governance structure, mandated by law’s professional responsibility rules, accidentally enables a distinctive type of business collapse known as a “partner run.” Partner runs are total liquidations, never reorganizations, and deeply feared by any law firm of scale. In my recent paper, I test whether a partner run can… Read More »