RCFS News

Differences in their objective functions lead to possible conflicts of interests between various stakeholders of firms; e.g., between shareholders and employees. These conflicts are more likely to manifest when firms face important investment or governance decisions, specifically, at times of mergers and acquisitions. How does the power of a firm’s labor force affect its exposure and gains in takeovers? In a forthcoming RCFS paper, “Hard Marriage with Heavy Burdens: Organized… Read More »Paper Spotlight: Hard Marriage with Heavy Burdens: Organized Labor as Takeover Deterrents

“How do Capital Requirements Affect Loan Rates? Evidence from High Volatility Commercial Real Estate” by David P. Glancy and Robert J. Kurtzman “Golden Handcuffs and Corporate Innovation: Evidence from Defined Benefit Pension Plans” by Huu Nhan Duong, Bin Qiu, and S. Ghon Rhee

“Effect of the Equity Capital Ratio on the Relationship between Competition and Bank Risk-taking Behavior” by Kuncheng Zheng and Jia Hao

It is not just managers that can have a short-term orientation—the forthcoming theoretical paper “Competition for Flow and Short-Termism in Activism,” by Mike Burkart and Amil Dasgupta, shows that activist funds too can focus on the short term. In the model, activists add value by preventing wastage by the manager. To signal their type to their own investors, they take a short-term action such as boosting leverage to make a… Read More »Paper Spotlight: Competition for Flow and Short-Termism in Activism

RCFS has a submission option for papers that were previously reviewed by other journals. The goal of such review process is to help the editors arrive at a quick and informed decision on a paper based on feedback received by the authors from previous submissions. A paper is eligible for this optional review process if it was previously submitted to a few select journals; please see Prior Review Policy for… Read More »Prior Review Process

              There is a growing literature on the stock price of a firm influencing the actions of the firm’s managers. To what extent do managers at other firms rely on the information in the stock price of a given firm? The forthcoming paper “Stock Market Information and Innovative Investment in the Supply Chain,” by Lantian Liang, Ryan Williams, and Steven Chong Xiao, addresses this… Read More »Paper Spotlight: Stock Market Information and Innovative Investment in the Supply Chain

RCFS’s March issue, 10(1), has published online. The Editor’s Choice paper is “Institutional Investors and Hedge Fund Activism” by Simi Kedia, Laura T. Starks, and Xianjue Wang. This issue also features two papers related to the COVID-19 pandemic: “Efficient Programs to Support Businesses During and After Lockdowns ” by Thomas Philippon and “Crisis Poison Pills” by Ofer Eldar and Michael D. Wittry.

The stock market stress caused by the onset of the COVID-19 outbreak generated an ideal situation for cash-rich activists to buy strategic equity positions in target firms. Distinguishing low stock valuations due to bad management decisions, potentially necessitating an activist campaign, from the systematic blow due to the pandemic’s economic impact, may have been too difficult under the circumstances we observed in the early months. Some of these activist campaigns… Read More »Paper Spotlight: Crisis Poison Pills

“Skilled Labor Risk and Corporate Policies” by Yue Qiu and Tracy Yue Wang