Since William Nordhaus published his seminal work in 1994, economists have coalesced around the need to implement carbon taxes to address the negative externalities of greenhouse gas emissions on temperatures. Under this paradigm, properly designed carbon taxes induce firms to internalize the cost to society of their emissions, thereby restoring the socially optimal allocation. In… Read More »
Regulatory oversight is important for safeguarding investors’ interests and ensuring the efficient functioning of financial markets. However, oversight can sometimes fail due to extraordinary factors such as resource constraints and political connections. Our recent study shows that oversight failure can also occur because of reduced productivity of regulators due to severe fine particulate matter air… Read More »
“Meat shaming,” “flight shaming,” and other carbon-footprint shaming behaviors are familiar phenomena in today’s climate-conscious society. In this context, people harness their ability to cause shame and embarrassment to others to prompt private individuals to adopt climate-friendly practices. A different type of climate shaming involves the shaming of firms by government regulators to achieve climate-related… Read More »
China has become a major global investor and witnessed massive amounts of outward foreign direct investment (OFDI) in recent years. Prior studies have shown that OFDI can be an important channel through which Chinese firms explore market opportunities, acquire strategic assets, and exploit global network linkages. However, internationalizing Chinese firms usually face the so-called liability… Read More »
Does democracy shape international merger activity? The short answer is yes, because democratic institutions are conducive to higher-quality corporate governance. In a new paper, we examine 104,425 cross-border transactions in 58 countries from the mid-1980s and find merger flows involve acquirers from more democratic countries than their targets. This result is primarily driven by a… Read More »
Private equity firms have been a mainstay of the mergers and acquisitions (“M&A”) industry for decades. Private equity firms are in the business of acquiring companies and subsequently selling them, ideally at a higher price. Those returns are then distributed to the investors of the underlying private equity fund after the private equity firm has… Read More »
Rental housing is one of the most important sectors in the economy. According to the US Census, in 2019, out of 123 million housing units in the United States, 44 million units, or 36%, were occupied by renters. The median household spent 35% of its income on rent, while 22% of households spent more than… Read More »
Can there be a highly developed financial market without the legal protection of investors and creditors? The law and finance literature is built on the premise that legal protection is essential to the development of a financial market. In the 17th century, for example, the English monarch was able to borrow money whereas his French… Read More »
A rise in chief executive officer (CEO) compensation in recent decades has attracted intense criticism from the media and public, with a frequent focus on excessive levels of executive compensation relative to rank-and-file employees. In response to such criticism, Congress passed Section 953(b) of the Dodd–Frank Act (hereafter, the pay ratio disclosure mandate) on July… Read More »
Despite their volatility and the many regulatory challenges that cryptoassets presents, they continue to be adopted by institutions and individuals alike, with some of the world’s largest organizations, ranging from Wall Street banks to U.N. institutions, allocating resources to the space. As exciting as crypto assets may be, however, no singular technology or financial instrument… Read More »
