Working Paper
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...
Read moreThe 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....
Read moreThe 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...
Read moreActivism, 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...
Read moreMandatory 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...
Read moreThe 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,...
Read moreThe Dark Side of Liquidity Creation: Leverage and Systemic Risk
We consider a model in which the threat of bank liquidations by creditors as well as equity-based compensation incentives both discipline bankers, but...
Read moreThe 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...
Read moreWhy High Leverage is Optimal for Banks
Liquidity production is a central role of banks. When there is a market premium for the production of (socially valuable) liquid financial claims and no...
Read moreThe 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...
Read moreDispersed 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...
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