The relationship between changes in GDP and unemployment during the 2008 financial crisis differed significantly from previous experiences and across countries. We study firm-level decisions in France, Germany, Japan, the UK, and the US. We find significant differences between the response of US and non-US firms.
US firms significantly decreased their production costs relative to firms in other countries. They have also reduced debt, reduced dividend payout, and increased their cash holdings compared to firms in other countries. The differences are, in general, explained by differences in financial leverage. However, financial leverage does not explain differences between production decisions in German and U.S. firms and between Japanese and US firms. We argue that differences in firm governance between US firms and firms in Germany and Japan drive these responses. US firms are more prone to cut labor costs and reduce leverage compared to German firms and Japanese firms in order to achieve larger profits and a larger cash-cushion in the short-run.
Using natural language processing, we identify and categorize the corporate goals in the shareholder letters of the 150 largest companies in the United...
One of the oldest corporate law issues – for whom is the corporation managed? – has become one of the hottest public policy issues of corporate law. The...
A common argument against divestment is that it jettisons voting power and that it has a small effect on stock prices. We argue that divestment is a form of...
In this paper, I analyse the main trade-offs between the economic value of the firm and its social value exploring how they are solved through corporate...