Liquidity

Market Liquidity, Investor Participation and Managerial Autonomy: Why do Firms go Private?

Illiquid Owners and Firm Behavior: Financial and Real Effects of the Personal Wealth Tax on Private Firms

We examine how negative liquidity shocks to households propagate to the firms they own. Our main tool for identification is a tax-driven shock to the...

The Twilight Zone: OTC Regulatory Regimes and Market Quality

We analyze a comprehensive sample of more than 10,000 U.S. stocks in the OTC market. As little is known about this market, we first characterize OTC firms...

The Value of Control and the Costs of Illiquidity

We develop a search model of block trades that values the illiquidity of controlling stakes. The model considers several dimensions of illiquidity....

Activism, Strategic Trading, and Liquidity

We analyze dynamic trading by an activist investor who can expend costly effort to affect firm value. We obtain the equilibrium in closed form for a...

The Effect of Liquidity on Governance

This paper studies the effect of stock liquidity on blockholder governance. Conditional upon acquiring a stake, liquidity reduces the likelihood that...

The Value of Financial Intermediation: Evidence from Online Debt Crowdfunding

Whereas many online marketplaces are fundamentally peer-to-peer, credit ones sell diversified loan portfolios characterized by maturity mismatch,...

Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement

This paper examines the economic effects of changes in securities regulation. We analyze two key directives in the European Union (EU) that tightened...

Dispersed Ownership: The Theories, the Evidence, and the Enduring Tension Between 'Lumpers' and 'Splitters'

From a global perspective, the single most noticeable fact about corporate governance is the radical dichotomy between dispersed ownership and...

Mandatory IFRS Reporting and Changes in Enforcement

In recent years, reporting under International Financial Reporting Standards (IFRS) became mandatory in many countries. The capital-market effects...

The New Mechanisms of Market Inefficiency

Mechanisms of market inefficiency are some of the most important and least understood institutions in financial markets today. A growing body of...

The Future in Law and Finance

The success of a capitalist economy rests upon the ability of finance to sustain potentially infinite growth, based on funding today the output of...