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Golden Parachutes and the Wealth of Shareholders
(2014)
Golden parachutes (GPs) have attracted substantial attention from investors and public officials for more than two decades. We find that GPs are associated with higher expected acquisition premiums and that this association ...
How Much Should We Trust Staggered Difference-in-Differences Estimates?
(Elsevier BV, 2022-05)
We explain when and how staggered difference-in-differences regression estimators, commonly applied to assess the impact of policy changes, are biased. These biases are likely to be relevant for a large portion of research ...
Measurement Errors of Expected Returns Proxies and the Implied Cost of Capital
(2013-05-22)
This paper presents a methodology to study implied cost of capital's (ICC) measurement errors, which are relatively unstudied empirically despite ICCs' popularity as proxies of expected returns. By applying it to the popular ...
Relative Performance Benchmarks: Do Boards Follow the Informativeness Principle?
(2017-03-23)
Relative TSR (rTSR) is increasingly used by market participants to judge and incentivize managerial performance. We evaluate the efficacy, reasons, and implications of firms' benchmarks in rTSR-based contracts. Although ...
Accounting Data, Market Values, and the Cross Section of Expected Returns Worldwide
(2015-06-08)
Under fairly general assumptions, expected stock returns are a linear combination of two accounting fundamentals―book to market and ROE. Empirical estimates based on this relation predict the cross section of out-of-sample ...
Short-Termism and Capital Flows
(2017-01-18)
During 2007–2016, S&P 500 firms distributed to shareholders $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that "short-termism" is impairing firms' ability to invest and ...
Search-Based Peer Firms: Aggregating Investor Perceptions Through Internet Co-Searches
(Elsevier, 2015)
Applying a "co-search" algorithm to Internet traffic at the SEC's EDGAR website, we develop a novel method for identifying economically-related peer firms and for measuring their relative importance. Our results show that ...
Evaluating Firm-Level Expected-Return Proxies
(2014-11-06)
We develop and implement a rigorous analytical framework for empirically evaluating the relative performance of firm-level expected-return proxies (ERPs). We show that superior proxies should closely track true expected ...
The Search for Benchmarks: When Do Crowds Provide Wisdom?
(2014-11-06)
We compare the performance of a comprehensive set of alternative peer identification schemes used in economic benchmarking. Our results show the peer firms identified from aggregation of informed agents' revealed choices ...
How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment
(Elsevier, 2013)
The well-established negative correlation between staggered boards (SBs) and firm value could be due to SBs leading to lower value or a reflection of low-value firms' greater propensity to maintain SBs. We analyze the ...