Why do firms in the same industry often have different leverage levels? In the forthcoming paper “Optimal Capital Structure with Imperfect Competition,” Egor Matveyev and Alexei Zhdanov show that strategic interaction alone can generate this difference. The authors first exhibit a theoretical model in which two ex ante identical firms are deciding when to enter an industry and also how much debt to issue. The product price depends both on… Read More »Paper Spotlight: Optimal Capital Structure with Imperfect Competition

“Determinants of LGBTQ Corporate Policies” by Tanja Artiga Gonzalez, Paul Vincent Calluzzo, G. Nathan Dong, and Georg Granic “What’s good for women is good for science: Evidence from the American Finance Association” by Renee Adams and Michelle Lowry

                        Existing evidence shows a significant cross-sectional heterogeneity in firms’ informational environment. Smaller firms may not have any research analysts following them, thus operating in a more informationally opaque environment and, as a result, asymmetric information may allow firm insiders to profit from their superior information. But insiders may also trade not so much for profit-related reasons but to… Read More »Paper Spotlight: Corporate Transactions in Hard-to-Value Stocks

“Agency Costs and Strategic Speculation in the U.S. Stock Market” by Paolo Pasquariello