Empirical Corporate Finance References

Professor Michael R. Roberts INVESTMENT POLICY

Surveys

1. Hubbard, R. Glenn, 1999, Capital Market Imperfections and Investment,

Journal of Economic Literature 36, 193-225. 2. Stein, Jeremy, 2003, Agency, Information and Corporate Investment, Handbook

of the Economics of Finance, Volume 1A, Eds. George M. Constantinides, Milton Harris, and Rene M. Stulz, Elsevier, Amsterdam.

Macroeconomic Conditions and Investment

Financial Accelerator

3. Bernanke, Ben, and Mark Gertler, 1989, Agency Costs, Net Worth, and Business Fuctuations, American Economic Review 79, 14−31.

4. Bernanke, Ben, and Carla Lown, 1991, The Credit Crunch, Brookings Papers on

Economic Activity, 204–239.

5. Kashyap, Anil K., Owen A. Lamont and Jeremy C. Stein, 1994, Credit Conditions and the Cyclical Behavior of Inventories, Quarterly Journal of Economics 109, 565−592.

6. Bernanke, Ben, and Mark Gertler, 1995, Inside the Black Box: the Credit

Channel of Monetary Policy Transmission, Journal of Economic Perspectives 9, 27−48.

7. Cecchetti, S.G., 1995, Distinguishing Theories of the Monetary Transmission

Mechanism, Federal Reserve Bank of St. Louis Review 77, 83−97. 8. *Peek, J., and E. Rosengren, 1995, The Capital Crunch: Neither a Borrower Nor

a Lender Be, Journal of Money, Credit and Banking 27, 625−638. 9. Bernanke, Ben, Mark Gertler and Simon Gilchrist, 1996, The Financial

Accelerator and the Fight to Quality, Review of Economic Studies 78, 1−15.

10. Peek, J., and E. Rosengren, 1997, The International Transmission of Fnancial Shocks: The Case of Japan, American Economic Review 87, 495−505.

11. Bernanke, B., M. Gertler and S. Gilchrist (1999), “The Financial Accelerator in

a Quantitative Business Cycle Framework”, in: J.B. Taylor and M. Woodford, eds., Handbook of Macroeconomics, Vol. 1C (Elsevier, Amsterdam).

Bank Lending Channel

12. Bernanke, Ben, and Alan Blinder, 1988, Credit, Money, and Aggregate

Demand, American Economic Review 78, 435−439. 13. Bernanke, Ben, and Alan Blinder, 1992, The Federal Funds Rate and the

Channels of Monetary Transmission, American Economic Review 82, 901−921. 14. Kashyap, Anil, Jeremy C. Stein and David Wilcox, 1993, Monetary Policy and

Credit Conditions: Evidence from the Composition of External Finance, American Economic Review 83, 78−98.

15. Kashyap, Anil, and Jeremy C. Stein, 1994, Monetary Policy and Bank Lending,

in: N.G. Mankiw, ed., Monetary Policy (University of Chicago Press, Chicago).

16. Hubbard, R.Glenn, 1995, Is there a ‘Credit Channel’ for Monetary Policy? Federal Reserve Bank of St. Louis Review 77, 63−77.

17. Kashyap, Anil, and Jeremy C. Stein, 1995, The Impact of Monetary Policy on

Bank Balance Sheets, Carnegie-Rochester Conference Series on Public Policy 42:151−195.

18. Ludvigson, Sidney, 1998, The Channel of Monetary Transmission to Demand:

Evidence from the Market for Automobile Credit, Journal of Money, Credit and Banking 30, 365−383.

19. Morgan, D., 1998, The Credit Effects of Monetary Policy: Evidence using Loan

Commitments, Journal of Money, Credit and Banking 30, 102−118.

20. Stein, Jeremy C., 1998, An Adverse-Selection Model of Bank Asset and Liability Management with Implications for the Transmission of Monetary Policy, RAND Journal of Economics 29, 466−486.

21. *Kashyap, Anil, and Jeremy C. Stein, 2000, What do a Million Observations on

Banks Say About the Transmission of Monetary Policy? American Economic Review 90, 407−428.

22. Kishan, R., and T. Opiela, 2000, Bank Size, Bank Capital, and the Bank

Lending Channel, Journal of Money, Credit and Banking 32, 121−141.

The Stock Market and Investment

23. Barro, Robert J., 1990, The Stock Market and Investment”, Review of Financial Studies 3, 115−131.

24. *Morck, Randal, Andrei Shleifer, and Robert Vishny, 1990, The Stock Market

and Investment: Is the Market a Sideshow? Brookings Papers on Economic Activity, 157–215.

25. Blanchard, Olivier J., C. Rhee and Lawrence H. Summers, 1993, The Stock

Market, Profit and Investment, Quarterly Journal of Economics 108, 115−136.

26. Baker, Malcolm, Jeremy C. Stein, and Jeffrey Wurgler, 2003, When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms, Quarterly Journal of Economics

27. Chen, Qi, Itay Goldstein, and Wei Jiang, 2007, Price informativeness and

investment sensitivity to stock prices, Review of Financial Studies 20, 619-650.

The Diversification Discount

28. Berger, P., and Eli Ofek, 1995, Diversification’s Effect on Frm Value, Journal of Financial Economics 37, 39−65.

29. Berger, P., and Eli Ofek, 1996, Bust-up Takeovers of Value-Destroying

Diversified Frms, Journal of Finance 51, 1175−1200.

30. *Graham, John R., Michael L. Lemmon, and Jack Wolf, 2002, Does corporate diversification destroy value? Journal of Finance 57, 695-720.

31. *Schoar, Antoinette, 2002, The effects of corporate diversification on

productivity, Journal of Finance 57, 2379-2403.

32. *Villalonga, Belen, 2004, Diversification discount or premium? New Evidence from BITS establishment level data, Journal of Finance 59, 479-506.

Financial Slack and Investment

Historical Evidence 33. Meyer, J.R., and E. Kuh, 1957, The Investment Decision, Harvard University

Press, Cambridge, MA.

Internal Funds and Investment 34. *Fazzari, Steven M., R. Glenn Hubbard and Bruce C. Petersen, 1988, Financing

Constraints and Corporate Investment, Brookings Papers on Economic Activity, 141–195.

35. Hoshi, Takeo, Anil Kashyap and David Scharfstein, 1991, Corporate Structure,

Liquidity, and Investment: Evidence from Japanese Industrial Groups, Quarterly Journal of Economics 106, 33−60.

36. Hall, Brownwyn H., 1992, Investment and Research and Development at the

Frm Level: Does the Source of Funding Matter? NBER Working Paper 4096 (NBER, Cambridge, MA).

37. Schaller, H., 1993, Asymmetric Information, Liquidity Constraints and

Canadian Investment, Canadian Journal of Economics 26, 552−574.

38. *Blanchard, Olivier J., Francisco Lopez-de-Silanes and Andrei Shleifer, 1994, “What Do Frms Do With Cash Windfalls?, Journal of Financial Economics 36, 337−360.

39. Carpenter, R.E., Stephen M. Fazzari and Bruce C. Petersen, 1994, Inventory

Investment, Internal-Fnance Fluctuations, and the Business Cycle, Brookings Papers on Economic Activity, 75–122.

40. Himmelberg, Charles P., and Bruce Petersen, 1994, R&D and Internal Fnance:

A Panel Study of Small Firms in High-Tech Industries”, Review of Economics and Statistics 76, 38−51.

41. Holtz-Eakin, D., D. Joulfaian and H.S. Rosen, 1994, Sticking it Out:

Entrepreneurial Survival and Liquidity Constraints, Journal of Political Economy 102, 53−75.

42. Calomiris, Charles W., and R. Glenn Hubbard, 1995, Internal Finance and

Investment: Evidence from the Undistributed Profits Tax of 1936–37, Journal of Business 68, 443−482.

43. Hubbard, R. Glenn, Anil K. Kashyap and Toni M. Whited, 1995, Internal

Fnance and Firm Investment, Journal of Money, Credit, and Banking 27, 683−701.

44. Chirinko, Robert S., 1995, Why Does Liquidity Matter in Investment

Equations?, Journal of Money, Credit, and Banking 27, 527−548.

45. Gilchrist, Simon, and Charles P. Himmelberg, 1995, Evidence on the Role of Cash Flow for Investment, Journal of Monetary Economics 36, 531−572.

46. Kaplan, Stephen N. and Luigi Zingales, 1997, Do Investment-Cash Flow

Sensitivities Provide Useful Measures of Financing Constraints? Quarterly Journal of Economics 112, 159−216.

47. Fazzari, Steven M., R. Glenn Hubbard, and Bruce C. Petersen, 2000, Investment-Cash Flow Sensitivities are Useful: A Comment on Kaplan and Zingales, Quarterly Journal of Economics 115, 695-705.

48. Kaplan, Steven N., and Luigi Zingales, 2000, Investment-Cash Fow Sensitivities

are not Valid Measures of Financing Constraints, Quarterly Journal of Economics 115, 707−712.

49. *Erickson, Timothy, and Toni Whited, 2000, Measurement Error and the

Relationship Between Investment and q, Journal of Political Economy 108, 1027−1057.

50. Rauh, Joshua, 2006, Investment and Financing Constraints: Evidence from the

Funding of Corporate Pension Plans, Journal of Finance 61, 33-72.

Debt (Net Worth) and Investment

51. Mooradian, Robert, 1994, The Effect of Bankruptcy Protection on Investment: Chapter 11 as a Screening Device, Journal of Finance 49, 1403-1430.

52. Bond, Stephen, and C. Meghir, 1994, Dynamic Investment Models and the

Firm’s Financial Policy”, Review of Economic Studies 61, 197−222.

53. Lang, Larry H.P., Eli Ofek, and Rene Stulz, 1996, Leverage, Investment, and Firm Growth, Journal of Financial Economics 40, 3−30.

54. Froot, Kenneth, and P. O’Connell, 1997, On the Pricing of Intermediated Risks:

Theory and Application to Catastrophe Reinsurance”, NBER Working Paper 6011 (NBER, Cambridge, MA).

55. *Hennessy, Christopher, 2004, Tobin’s Q, Debt Overhand, and Investment,

Journal of Finance 56. *Chava, Sudheer, and Roberts, Michael R., 2007, How Does Financing Impact

Investment? The Role of Debt Covenants, forthcoming, Journal of Finance.

57. Rauh, Joshua, 2007, The Effects of Financial Condition on Capital Investment and Financing: Evidence from Variation in Pension Fund Asset Performance, Working Paper, University of Chicago.

Security Price Reactions to Investment

58. McConnell, J.J., and C.J. Muscarella, 1985, Corporate Capital Expenditure

Decisions and the Market Value of the Firm, Journal of Financial Economics 14, 399−422.

Mergers and Acquisitions

59. Lewellen, W.G., C. Loderer and A. Rosenfeld, 1985, Merger Decisions and

Executive Stock Ownership in Acquiring Firms, Journal of Accounting and Economics 7, 209−231.

60. Roll, Richard, 1986, The Hubris Hypothesis of Corporate Takeovers”, Journal

of Business 59, 197−216. 61. *Morck, Randall, Andrei Shleifer and Robert Vishny, 1990, Do Managerial

Objectives Drive Bad Acquisitions”, Journal of Finance 45, 31−48.

62. Lang, Larry H.P., Rene M. Stulz and Ralph A. Walkling, 1991, A Test of the Free Cash Flow Hypothesis: The Case of Bidder Returns, Journal of Financial Economics 29, 315−335.

63. *Bertrand, Marianne, and Sendhil Mullainathan, 2003, Enjoying the Quiet Life?

Corporate Governance and Managerial Preferences, Journal of Political Economy

FINANCIAL POLICY – CAPITAL STRUCTURE

Foundation

64. Modigliani, Franco, and Merton Miller, 1958, The Cost of Capital, Corporation

Finance and the Theory of Investment, American Economic Review 48, 261-297.

Surveys

65. Harris, Milton, and Artur Raviv, 1991, The Theory of Capital Structure, Journal of Finance 46, 297-355.

A. A detailed, if somewhat dated now, survey focusing on capital structure theories based on agency costs, asymmetric information, product/input market interactions, and corporate control considerations (excludes tax-based theories).

66. Myers, Stewart, 2003, The Financing of Corporations, Handbook of the

Economics of Finance, Volume 1A, Eds. George M. Constantinides, Milton Harris, and Rene M. Stulz, Elsevier, Amsterdam.

A. A nice nontechnical survey of tradeoff, pecking order, and agency-based theories of capital structure from one of the pioneers in the field.

67. Frank, Murray Z., and Vidhan Goyal, 2007, Tradeoff and Pecking Order Theories of Debt, The Handbook of Empirical Corporate Finance, Ed. Espen Eckbo, Elsevier, Amsterdam.

A. A more detailed and up-to-date compliment to Myers survey by two good empiricists.

68. Graham, John R., and Campbell Harvey, 2001, The Theory and Practice of

Corporate Finance: Evidence from the Field, Journal of Financial Economics 60, 187–243.

General Studies

Determinants of Leverage

69. *Titman, Sheridan, and Roberto Wessels, 1988, The Determinants of Capital

Structure Choice, Journal of Finance 1-19.

70. Barclay, Michael, Clifford W. Smith, and Ross Watts, 1995, The Determinants of Corporate Leverage and Dividend Policies, Journal of Applied Corporate Finance 7, 4-19.

71. *Rajan, Raghuram, and Luigi Zingales, 1995, What Do We Know About Capital Structure: Some Evidence from International Data, Journal of Finance 50, 1421-1460.

72. Welch, Ivo, 2004, Capital Structure and Stock Returns, Journal of Political Economy 112, 106-131.

73. *Faulkender, Michael, and Mitchell A. Petersen, 2006, Does the Source of Capital Affect Capital Structure? Review of Financial Studies 19, pp-45-79.

74. Frank, Murray Z., and Vidhan K. Goyal, 2007, Capital structure decisions: Which factors are reliably important? Working Paper, University of Minnesota and HKUST.

75. *Lemmon, Michael L., Michael R. Roberts, and Jaime F. Zender, 2007, Back to the Beginning: Persistence and the Cross-Section of Corporate Capital Structure, forthcoming Journal of Finance.

Determinants of Issuance Decisions

76. Taggart, Robert A. Jr., 1977, A Model of Corporate Financing Decisions, Journal of Finance 32, 1467-1484.

77. *Marsh, Paul, 1982, The choice between equity and debt: An empirical study, Journal of Finance 37, 121–144.

78. Jung, Kooyul, Yong-Cheol Kim, and Rene Stulz, 1996, Timing, Investment Opportunities, Managerial Discretion, and the Security Issue Decision, Journal of Financial Economics 42, 159-185.

79. *Hovakimian, Armen, Tim Opler, and Sheridan Titman, 2001, The Debt-Equity Choice, Journal of Financial and Quantitative Analysis 36, 1–24.

Market Timing

80. *Baker, Malcolm, and Jeff Wurgler, 2002, Market timing and capital structure, Journal of Finance 57, 1-32.

81. Alti, Aydogan, 2006, How Persistent is the Impact of Market Timing on Capital Structure? Journal of Finance 61, 1681-1710.

Target Capital Structure & Rebalancing

82. Jalilvand, Abolhassan, and Robert S. Harris, 1984, Corporate Behavior in Adjusting to Capital Structure and Dividend Targets: An Econometric Study, Journal of Finance 39, 127-145.

83. *Leary, Mark T., and Michael R. Roberts, 2005, Do Firms Rebalance Their Capital Structures? Journal of Finance 60, 2575-2619.

84. Flannery, Mark, and Kasturi Rangan, 2006, Partial Adjustment Towards Target Capital Structures, Journal of Financial Economics 79, 469–506.

85. Kayhan, Ayla, and Sheridan Titman, 2007, Firms’ Histories and Their Capital Structures, Journal of Financial Economics 83, 1-32.

Taxes

86. Givoly, Dan, Carla Hayn, Aharon R. Ofer, and Oded Sarig, 1992, Taxes and Capital Structure: Evidence from Firms’ Response to the Tax Reform Act of 1986, Review of Financial Studies 5, 331–355.

87. Fama, Eugene, and Kenneth R. French, 1998, Taxes, Financing Decisions and

Firm Value, Journal of Finance 53, 819–843.

88. *Graham, John, 2000, How big are the tax benefits of debt?, Journal of Finance 55, 1901-1941.

89. Graham, John, 2003, Taxes and Corporate Finance: A Review, Review of

Financial Studies 16, 1075-1129.

90. Graham, John R., and A L. Tucker, 2006, Tax shelters and corporate debt policy, Journal of Financial Economics 81, 563–594.

91. Lewellen, Jonathan, and Katerina Lewellen, 2006, Internal Equity, Taxes, and

Capital Structure, Working Paper, Dartmouth University.

Bankruptcy and Distress

92. Warner, Jerome B., 1977, Bankruptcy Costs: Some Evidence, Journal of Finance 32, 337–347.

93. *Haugen, Robert A., and Lemma W. Senbet, 1978, The Insignificance of

Bankruptcy Costs to the Theory of Optimal Capital Structure, Journal of Finance 33, 383–393.

94. Franks, Julian, and Walter Torous, 1989, An Empirical Investigation of United

States Firms in Reorganization, Journal of Finance 44, 747-769.

95. Gilson, Stuart, Kose John, and Larry Lang, 1990, Troubled Debt Restructurings: An Empirical Study of Private Restructurings of Firms in Default, Journal of Financial Economics 27, 315-353.

96. Weiss, Lawrence A., 1990, Bankruptcy Resolution: Direct Costs and Violation

of Priority of Claims, Journal of Financial Economics 27, 419-444.

97. Asquith, Paul, Robert Gertner, and David Scharfstein, 1994, Anatomy of Financial Distress: An Examination of Junk-Bond Issuers, Quarterly Journal of Economics 109, 625-658.

98. Franks, Julian, and Walter Torous, A Comparison of Financial recontracting in

Distressed Exchanges and Chapter 11 Reorganizations, Journal of Financial Economics 35, 349-370.

99. *Gilson, Stuart C., 1997, Transactions Costs and Capital Structure Choice:

Evidence from Financially Distressed Firms, Journal of Finance 52, 161-196.

100. *Andrade, Gregor, and Steven N. Kaplan, 1998, How Costly is Financial (Not Economic) Distress? Evidence from Highly Leverage Transactions that Became Distressed, Journal of Finance 53, 1443-1493.

101. *Pulvino, Todd, 1998, Do Asset Fire Sales Exist? An Empirical Investigation of

Commercial Aircraft Transactions, Journal of Finance 53, 939-978.

102. Gilson, Stuart, Edith Hotchkiss, and Richard Ruback, 2000, Valuation of Bankrupt Firms, Review of Financial Studies 13, 43-74..

Pecking Order (and Versus Tradeoff)

103. *Shyam-Sunder, Lakshmi, and Stewart Myers, 2001, Testing Static Tradeoff Against Pecking Order Models of Capital Structure, Journal of Financial Economics 51, 219-244.

104. *Chirinko, R., and A. Singha, 2000, Testing static trade-off against pecking order models of capital structure: A critical comment, Journal of Financial Economics 58, 417–425.

105. Fama, Euegene, and Kenneth R. French, 2002, Testing Trade-off and Pecking Order Predictions about Dividends and Debt, Review of Financial Studies 15, 1–33.

106. *Frank, Murray and Vidham Goyal, 2003, Testing the pecking order theory of

capital structure, Journal of Financial Economics 67, 217-248.

107. Lemmon, Michael, and Jamie F. Zender, 2005, Debt Capacity and Tests of Capital Structure Theories, Working Paper, University of Utah.

108. Fama, Eugene, and Kenneth R. French, 2005, Financing Decisions: Who Issues Stock?, Journal of Financial Economics 76, 549-582.

109. *Leary, Mark T., and Michael R. Roberts, 2007, The Pecking Order, Debt Capacity, and Information Asymmetry, Working Paper, The Wharton School.

Information Asymmetry

110. Chang, X., Sudipto Dasgupta, and Giles Hillary, 2006, Analyst Coverage and Financing Decisions, Journal of Finance 61, 3009–3048.

111. Gomes, Armando, and Gordon Phillips, 2006, Private and Public Security Issuance by Public Firms: The Role of Asymmetric Information, Working Paper, University of Maryland.

Agency Costs

112. Crutchley, C.E., and R.S. Hansen, 1989, A Test of the Agency Theory of Managerial Ownership, Corporate Leverage, and Corporate Dividends, Financial Management 18, 36–46.

113. *Roberts, Michael R. and Amir Sufi, 2009, Control rights and capital structure: An empirical investigation, Journal of Finance 64, 1657-1695.

114. Barclay, Michael, Erwan Morellec, and Clifford W. Smith, 2006, On the Debt Capacity of Growth Options, Journal of Business 79, 37-59.

The Macroeconomy and Capital Structure

115. *Korajczyk, Robert A., and Amnon Levy, 2003, Capital Structure Choice: Macroeconomic Conditions and Fnancial Constraints, Journal of Financial Economics 68, 75–109.

116. Bernanke, Ben S., and John Y. Campbell, 1988, Is There a Corporate Debt Crisis?, Brookings Papers on Economic Activity 1, 83-125.

Product Market Competition/Industry and Capital Structure

117. *Chevalier, Judith, 1995, Do LBO Supermarkets Charge More? An Empirical Analysis of the Effects of LBOs on Supermarket Pricing, Journal of Finance 50, 1095-1112.

118. *Chevalier, Judith, 1995, Capital Structure and Product Market Competition: Empirical Evidence from the Supermarket Industry, American Economic Review 85, 415-435.

119. Phillips, Gordon, 1995, Increased Debt and Industry Product Markets: An Empirical Analysis, Journal of Financial Economics 37, 189-238.

120. Campello, Murillo, 2003, Capital Structure and Product Markets Interactions: Evidence from Business Cycles, Journal of Financial Economics 68, 353-378.

121. Mackay, Peter, and Gordon M. Phillips, 2005, How Does Industry Affect Firm Fnancial Structure?, Review of Financial Studies 18, 1433–1466.

Low Leverage and Debt Conservatism

122. Minton, Bernadette A., and Karen H. Wruck, 2001, Financial Conservatism: Evidence on Capital Structure from Low Leverage Firms, University of Ohio Working Paper No. 2001-6.

123. Lemmon, Michael L., and Jaime F. Zender, 2001, Looking Under the Lamppost: An Empirical Examination of the Determinants of Capital Structure, Working Paper, University of Utah.

124. Molina, Carlos A., 2005, Are Firms Underleveraged? An Examination of the Effect of Leverage on Default Probabilities, Journal of Finance 60, 1427–1459.

125. Strebulaev, Ilya….

Security Price Implications of Financing Events

126. Masulis, Ronald W., 1980, The Effects of Capital Structure Change on Security

Prices: A study of Exchange Offers, Journal of Financial Economics 8, 139-177.

127. Masulis, Ronald W., 1980, Stock Repurchase by Tender Offer: An Analysis of the Causes of Common Stock Price Changes, Journal of Finance 35, 305–319.

128. Masulis, Ronald W., and Ashok N. Korwar, 1986, Seasoned Equity Offerings: An Empirical Investigation, Journal of Financial Economics 15, 91–118.

129. Mikkelson, Wayne H., and Megan M. Partch, 1986, Valuation Effects of Security Offerings and the Issuance Process, Journal of Financial Economics 15, 31–60.

130. Asquity, Paul, and Mullins, 1986, Equity Issues and Offering Dilution, Journal of Financial Economics 15:61−89.

FINANCIAL CONTRACTING, SECURITY DESIGN & RENEGOTIATION

Surveys

131. Roberts, Michael R and Amir Sufi, 2009, Financial contracting: A survey of empirical research and future directions, Andrew Lo and Robert Merton (eds.), Annual Reviews vol. 1.

Collateral

132. John, Kose, Anthony Lynch, and Manju Puri, 2003, Credit ratings collateral, and

loan characteristics: Implications for yield, Journal of Business 76, 371-409.

133. Benmech, Effi, Mark Garmaise, and Toby Moskowitz, 2005, Do liquidation values affect financial contracts? Evidence from commercial loan contracts and zonging regulation, Quarterly Journal of Economics 120, 1121-1154.

134. Benmech, Effi and Nittai Bergman, 2005, Collateral pricing, Journal of Finance 91, 339-360.

Renegotiation

135. Gilson, Stuart, 1990, Bankruptcy, boards, banks, and blockholders: Evidence on

changes in corporate ownership and control when firms default, Journal of Financial Economics 27, 355-387.

136. Roberts, Michael R, and Amir Sufi, 2009, Renegotiation of financial contracts: Evidence from private credit agreements, Journal of Financial Economics 93, 159-184.

137. Benmelech, Effi and Nittai Bergman, 2008, Liquidation values and the credibility of financial contract renegotiation: Evidence from US airlines, Quarterly Journal of Economics 123, 1635-1677.

FINANCIAL POLICY - LIQUIDITY

138. Opler, Timothy, Larry Pinkowitz, and Rene Stulz, 1999, The determinants and implications of corporate cash holdings, Journal of Financial Economics 14, 1059-1082.

139. Faulkender, Michael and Rong Wang, 2006, Corporate financial policy and the value of cash, Journal of Finance 61, 1957-1990.

140. Foley, C. Fritz, Jay Hartzell, Sheridan Titman, and Garry J. Twite, 2007, Why

do firms hold so much cash? A tax-based explanation, Journal of Financial Economics 86, 579-607.

141. Dittmar, Amy, and Jan Mahrt-Smith, 2007, Corporate governance and the value

of cash holdings, Journal of Financial Economics 83, 599-634.

142. Haushalter, David, Sandy Klasa, and William Maxwell, 2007, The influence of product market dynamics on the firm’s cash holdings and hedging behavior, Journal of Financial Economics 84, 797-825.

143. Harford, Jarrad, Sattar Mansi, and William Maxwell, 2008, Corporate

governance and a firm’s cash holdings, Journal of Financial Economics 87, 535-555.

144. Riddick, Leigh A. and Toni M. Whited, 2008, The corporate propensity to save,

forthcoming Journal of Finance.

145. Sufi, Amir, 2009, Bank lines of credit in corporate finance: An empirical analysis, Review of Financial Studies 22, 1057-1088.

146. Bates, Thomas, Kathleen M. Kahle, and Rene Stulz, 2010, Why do US firms

hold so much more cash than they used to? Forthcoming Journal of Finance.

FINANCIAL POLICY – PAYOUT POLICY

Foundation

147. Miller, Merton and Franco Modigliani, 1961, Dividend Policy, Growth and the Valuation of Shares, Journal of Business 34, 411-433.

Surveys

148. Allen, Franklin, and Roni Michael, 2003, Payout Policy, Handbook of the

Economics of Finance, Volume 1A, Eds. George M. Constantinides, Milton Harris, and Rene M. Stulz, Elsevier, Amsterdam.

149. Brav, Alon, John R. Graham, Campbell Harvey and Roni Michaely, 2005,

Payout Policy in the 21st Century, Journal of Financial Economics 77, 483-527.

Smoothing 150. Lintner, John, 1956, Distribution of Incomes of Corporations Among Dividends,

Retained Earnings, and Taxes, American Economic Review 46, 97-113.

151. Fama, Eugene F. and Harvey Babiak, 1968, Dividend Policy: An Empirical Analysis, Journal of the American Statistical Association 63, 1132-1161.

Taxes

Static Models

152. Elton, Edward and Martin Gruber, 1970, Marginal Stockholders‘ Tax Rates and

the Clientele Effect, Review of Economics and Statistics 52, 68-74.

The Role of Risk (These are more asset pricing studies of dividend yields.)

153. Black, Fischer, and Myron Scholes, 1974, The Effects of Dividend Yield and

Dividend Policy on Common Stock Prices and Returns, Journal of Financial Economics, 1, 1-22.

154. Blume, Marshal E., Jean Crockett and Irwin Friend, 1974, Stock Ownership in

the United States: Characteristics and Trends, Survey of Current Business, 16-40.

155. Long, John B., 1977, Efficient Portfolio Choice with Differential Taxation of

Dividend and Capital Gains, Journal of Financial Economics 5, 25-53.

156. Lewellen, Wilbur G., Kenneth L. Stanley, Ronald C. Lease and Gary G. Schlarbaum, 1978, Some Direct Evidence on the Dividend Clientele Phenomenon, Journal of Finance 33, 1385-1399.

157. Litzenberger, Robert and Krishna Ramaswamy, 1979, The Effects of Personal

Taxes and Dividends on Capital Asset Prices: Theory and Empirical Evidence, Journal of Financial Economics 7, 163-195.

158. Rosenberg, Bar and Vinay Marathe, 1979, Tests of Capital Asset Pricing Hypotheses, Research in Finance 1, 115-224.

159. Blume, Marshal E., 1980, Stock Return and Dividend Yield: Some More

Evidence, Review of Economics and Statistics 62, 567-577.

160. Litzenberger, Robert and Krishna Ramaswamy, 1980, Dividends, Short Selling Restrictions, Tax Induced Investor Clientele and Market Equilibrium, Journal of Finance 35, 469-482.

161. Litzenberger, Robert and Krishna Ramaswamy, 1982, The Effects of Dividends

on Common Stock Prices: Tax Effects or Information Effects?, Journal of Finance 37, 429-443.

162. Miller, Merton and Myron Scholes, 1982, Dividends and Taxes: Empirical

Evidence, Journal of Political Economy 90, 1118-1141.

163. Morgan, Ian G., 1982, Dividends and Capital Asset Prices, Journal of Finance 37, 1071-1086.

164. Poterba, James and Lawrence H. Summers, 1984, New Evidence that Taxes

Affect the Valuation of Dividends, Journal of Finance 39, 1397-1415.

165. Keim, Don, 1985, Dividend Yields and Stock Returns: Implications of Abnormal January Returns, Journal of Financial Economics 14, 473-489.

166. Chen, Nai Fu, Bruce Grundy and Robert F. Stambaugh, 1990, Changing Risk,

Changing Risk Premiums, and Dividend Yield Effects, Journal of Business 63, S51-S70.

167. Kalay, Avner and Roni Michaely, 2000, Dividends and Taxes: A

Reexamination, Financial Management 29,.

Dynamic Models

168. Kalay, Avner, 1982, The Ex-dividend Day Behavior of Stock Prices: A Re-examination of the Clientele Effect, Journal of Finance 37, 1059-1070.

169. Peterson, Pamela, David Peterson and James Ang, 1985, Direct Evidence on the

Marginal Rate of Taxation on Dividend Income, Journal of Financial Economics 14, 267-282.

170. Lakonishok, Joseph and Theo Vermaelen, 1986, Tax Induced Trading Around

Ex-dividend Dates, Journal of Financial Economics 16, 287-319.

171. Barclay, Michael, 1987, Dividends, Taxes, and Common Stock Prices: The Ex-dividend Day Behavior of Common Stock Prices Before the Income Tax, Journal of Financial Economics 14, 31-44.

172. Karpoff, Jonathan M. and Ralph A. Walkling, 1988, Short-Term Trading around

Ex-Dividend Days: Additional Evidence, Journal of Financial Economics 21, 291-298.

173. Karpoff, Jonathan M. and Ralph A. Walkling, 1990, Dividend Capture in

NASDAQ Stocks, Journal of Financial Economics 28, 39-66.

174. Michaely, Roni, 1991, Ex-dividend Day Stock Price Behavior: The Case of the 1986 Tax Reform Act, Journal of Finance 46, 845-860.

175. Kato, Kiyoshi and Uri Loewenstein, 1995, The Ex-dividend-day Behavior of

Stock Prices: The Case of Japan, Review of Financial Studies 8, 817-847.

176. Michaely, Roni and Maurizio Murgia, 1995, The Effect of Tax Heterogeneity on Prices and Volume Around the Ex-dividend Day: Evidence from the Milan Stock Exchange, Review of Financial Studies,.

177. Michaely, Roni and Jean-Luc Vila, 1995, Investors‘ Heterogeneity, Prices and

Volume Around the Ex-Dividend Day, Journal of Financial and Quantitative Analysis 30, 171-198.

178. Michaely, Roni and Jean-Luc Vila, 1996, Trading Volume with Private

Valuations: Evidence from the Ex-dividend Day, Review of Financial Studies 9, 471-510.

179. Bali, Rakesh and Gailen Hite, 1998, Ex-dividend day stock price behavior:

discreteness or tax-induced clientele? Journal of Financial Economics 47, 127-159.

180. Frank, Murray and Ravi Jagannathan, 1998, Why do stock prices drop by less

than the value of the dividend? Evidence from a country without taxes, Journal of Financial Economics 47, 161-188.

181. Green, Richard, and Kristian Rydqvist, 1999, Ex-day Behavior with Dividend

Preference and Limitation to Short-Term Arbitrage: The Case of Swedish Lottery Bonds, Journal of Financial Economics 53, 145-187.

182. Koski, Jennifer, and Roni Michaely, 2000, Prices, Liquidity and the Information

Content of Trades, Review of Financial Studies 13, 659-696.

183. Graham, John R., Roni Michael, and Michael R. Roberts, 2003, Do Price Discreteness and Transaction Costs Affect Stock Returns? Comparing Ex-

Dividend Pricing Before and After Decimalization, Journal of Finance 58, 2611-2635.

Information/Signaling Payout Policy and Future Earnings

184. Watts, Ross, 1973, The Information Content of Dividends, Journal of Business

46, 191-211. 185. Gonedes, Nicholas J., 1978, Corporate Signaling, External Accounting, and

Capital Market Equilibrium: Evidence on Dividends, Income, and Extraordinary Items, Journal of Accounting Research 16, 26-79.

186. Brickley, James, 1983, Shareholders Wealth, Information Signaling, and the

Specially Designated Dividend: An Empirical Study, Journal of Financial Economics 12, 187-209.

187. Penman, Stephen H., 1983, The Predictive Content of Earnings Forecasts and

Dividends, Journal of Finance 38, 1181-1199.

188. Eades, Ken, Pat Hess and Han E. Kim, 1984, On Interpreting Security Returns During the Ex-dividend Period, Journal of Financial Economics 13, 3-34.

189. Ofer, Aharon R. and Daniel R. Siegel, 1987, Corporate Financial Policy,

Information, and Market Expectations: An Empirical Investigation of Dividends, Journal of Finance 42, 889-911.

190. DeAngelo, Harry, Linda DeAngelo, and Douglas Skinner, 1996, Reversal of

Fortune, Dividend Signaling and the Disappearance of Sustained Earnings Growth, Journal of Financial Economics 40, 341-371.

191. Nissim, Doron, and Amir Ziv, 2001, Dividend changes and future profitability,

Journal of Finance 61, 2111-2134.

Payout Policy and Security Prices

192. Pettit, R. Richardson, 1972, Dividend Announcements, Security Performance, and Capital Market Efficiency, Journal of Finance 27, 993-1007.

A. Dividend increases (decreases) are met with price increases (decreases).

193. Charest, Guy, 1978, Dividend Information, Stock Returns and Market Efficiency œ II, Journal of Financial Economics 6, 297-330.

A. Abnormal performance of 4% in the year leading up to a dividend increase month and -12% for dividend decreasing firms.

B. 4% abnormal return in 2 years after dividend increase and -8% for dividend decreasing firms.

194. Aharony, Joseph and Itzhak Swary, 1980, Quarterly Dividend And Earnings

Announcements and Stockholders‘ Returns: An Empirical Analysis, Journal of Finance 35, 1-12.

A. Dividend increases (decreases) are met with price increases (decreases) even after controlling for contemporaneous earnings announcements.

195. Asquith, Paul and David W. Mullins, Jr., 1983, The Impact Of Initiating

Dividend Payments On Shareholders‘ Wealth, Journal of Business 56, 77-96. A. 3.4% average excess return for dividend initiations.

196. Healy, Paul M. and Krishna G. Palepu, 1988, Earnings Information Conveyed

by Dividend Initiations and Omissions, Journal of Financial Economics 21, 149-176.

197. Bernhardt, Dan, J. Fiona Robertson and Ray Farrow, 1994, Testing Dividend

Signaling Models, Working Paper, Queen‘s University. 198. Bernheim, Doug and Adam Wantz, 1995, A Tax-based Test of the Dividend

Signaling Hypothesis, American Economic Review 85, 532-551.

199. Michaely, Roni, Richard H. Thaler and Kent Womack, 1995, Price Reactions to Dividend Initiations and Omissions: Overreaction or Drift? Journal of Finance 50 (2), 573-608.

200. Amihud, Yakov and Maurizio Murgia, 1997, Dividends, taxes, and signaling:

Evidence from Germany, Journal of Finance 52, 397-408.

201. Benartzi, Shlomo, Roni Michaely and Richard Thaler, 1997, Do changes in dividends signal the future or the past? Journal of Finance 52, 1007-1043.

202. Grullon, Gustavo, Roni Michaely and Bhaskaran Swaminathan, 2003, Are

dividend changes a sign of firm maturity? The Journal of Business 75, 387-424.

Agency

203. Kalay, Avner, 1982, Stockholder-Bondholder Conflict and Dividend Constraint, Journal of Financial Economics 14, 423-449.

204. Handjinicolaou, George and Avner Kalay, 1984, Wealth Redistributions or

Changes in Firm Value: An Analysis of Returns to Bondholders and the Stockholders around Dividend Announcements,“ Journal of Financial Economics 13, 35-63.

205. Lang, Larry H. P. and Robert H. Litzenberger, 1989, Dividend Announcements: Cash Flow Signaling vs. Free Cash Flow Hypothesis, Journal of Financial Economics 24, 181-192.

206. DeAngelo, Harry and Linda DeAngelo, 1990, Dividend Policy and Financial

Distress: An Empirical Investigation of Troubled NYSE Firms, Journal of Finance 45, 1415-1431.

207. Christie, William and Vikram Nanda, 1994, Free Cash Flow, Shareholder

Value, and the Undistributed Profits Tax of 1936 and 1937, Journal of Finance 49, 1727-1754.

208. Yoon, Pyung S. and Laura Starks, 1995, Signaling, Investment Opportunities,

and Dividend Announcements, Review of Financial Studies 8, 995-1018.

209. La Porta, Rafael, Florencio Lopez-De Silanes, Andrei Shleifer, and Robert Vishny, 2000, Agency Problems and Dividend Policy Around the World, Journal of Finance 55, 1-33.

210. Lie, Eric, 2000, Excess funds and the agency problems: An empirical study of

incremental disbursements, Review of Financial Studies 13, 219-248.

Transaction Costs and Other Explanations

211. Long, John B., Jr., 1978, The Market Valuation of Cash Dividends: A Case to Consider, Journal of Financial Economics 6, 235-264.

212. Poterba, James, 1986, The Market Valuation of Cash Dividends: The Citizens

Utilities Case Reconsidered, Journal of Financial Economics 15, 395-406.

213. Del Guercio, Diane, 1996, The Distorting Effect of the Prudent-Man Laws on Institutional Equity Investments, Journal of Financial Economics 40, 31-62.

214. Hubbard, Jeff and Roni Michaely, 1997, Do Investors Ignore Dividend

Taxation? A Reexamination of the Citizen Utilities Case, Journal of Financial and Quantitative Analysis 32,.

Repurchases

215. Vermaelen, Theo, 1981, Common Stock Repurchases and Market Signaling: An

Empirical Study, Journal of Financial Economics 9, 138-183. 216. Barclay, Michael J. and Clifford W. Smith, Jr., 1988, Corporate Payout Policy:

Cash Dividends versus Open-Market Repurchases, Journal of Financial Economics 22, 61-82.

217. Comment, Robert and Gregg Jarrell, 1991, The Relative Power of Dutch-Action and Fixed-Priced Self-Tender Offers and Open Market Share Repurchases, Journal of Finance 46, 1243-1271.

218. Dann, L., Ronald Masulis, and D. Mayers, 1991, Repurchase Tender Offers and

Earning Information, Journal of Accounting and Economics 14, 217-251.

219. Bagwell, Laurie, 1992, Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity, Journal of Finance 47, 71-105.

220. Ikenberry, David, Josef Lakonishok and Theo Vermaelen, 1995, Market

Underreaction to Open Market Share Repurchases, Journal of Financial Economics 39, 181-208.

221. Miller, James and John McConnell, 1995, Open-Market Share Repurchase

Programs and Bid-Ask Spreads on the NYSE: Implications for Corporate Payout Policy, Journal of Financial and Quantitative Analysis 30, 365-382.

222. Nohel, T. and Vefa Tarhan, 1998, Share Repurchases and Firm Performance:

New Evidence on the Agency Costs of Free Cash Flow, Journal of Financial Economics 49, 187-222.

223. Stephens, Clifford, and Michael Weisbach, 1998, Actual Share Reacquisitions in

Open Market Repurchases Programs, Journal of Finance 53, 313-333.

224. Grullon, Gustavo and David Ikenberry, 2000, —What Do Know About Stock Repurchase? Journal of Applied Corporate Finance 13, 31-51.

225. Ikenberry, David, Josef Lakonishok and Theo Vermaelen, 2000, Share

Repurchases in Canada: Performance and Strategic Trading,“ Journal of Finance 55, 2373-2397.

226. Fama, Eugene, and Kenneth French, 2001, Disappearing Dividends: Changing

Firm Characteristics or Lower Propensity to Pay? Journal of Financial Economics 60, 3-43.

227. Grullon, Gustavo and Roni Michaely, 2002, Dividends,

Share Repurchases and the Substitution Hypothesis, The Journal of Finance 62,.

228. Grullon, Gustavo, and Roni Michaely, 2004, The Information Content of Share Repurchase Programs, Journal of Finance 59, 651-680.

229. Jagannathan, M., Clifford P. Stephens, and Michael S. Weisbach, 1999,

Financial Flexibility and the Choice between Dividends and Stock Repurchases, Journal of Financial Economics 57, 355-384.

CORPORATE GOVERNANCE

Surveys

230. Shliefer, Andrei and Robert Vishny, 1997, A survey of corporate governance, Journal of Finance 52, 737-783.

General studies

231. Barclay, Michael and Clifford Holderness, 1989, Private benefits from control

of public corporations, Journal of Financial Economics 25, 371-395.

232. Comment, Robert, and Gregg Jarrell, 1995, Corporate focus and stock returns, Journal of Financial Economics 37, 67-87.

233. Comment, Robert and G. William Schwert, 1995, Poison or placebo? Evidence

on the deterrent and wealth effects of modern antitakeover measures, Journal o Financial Economics 39, 3-44.

234. DeAngelo, Harry, and Linda DeAngelo, 1985, Managerial ownership of voting

rights: A study of public corporations with dual classes of common stock, Journal of Financial Economics 14, 33-69.

235. DeAngelo, Harry, and Edward Rice, 1983, Antitakeover amendments and

stockholder wealth, Journal of Financial Economics 11, 329-360.

236. Denis, David and Jan Serrano, 1996, Active investors and management turnover following unsuccessful control contests, Journal of Financial Economics 40, 239-266.

237. Dodd, Peter, and Jerold B. Warner, 1983, On corporate governance: A study of

proxy contests, Journal of Financial Economics 11, 401-438.

238. Holderness, Clifford and Dennis Sheehan, 1988, The role of majority shareholders in publicly held corporations: An exploratory analysis, Journal of Financial Economics 20, 317-346.

239. Jarrell, Gregg and Annette Poulsen, 1988, Shark repellents and stock prices: The

effects of antitakeover amendments since 1980, Journal of Financial Economics 19, 127-168.

240. Jarrell, Gregg and Annette Poulsen, 1988, Dual-class recapitalizations as

antitakeover mechanisms: The recent evidence, Journal of Financial Economics 20, 129-152

241. Kaplan, Steve, 1989, The effects of management buyouts on operating performance and value, Journal of Financial Economics 24, 217-254.

242. Kaplan, Steve, 1991, The staying power of leverage buyouts, Journal of

Financial Economics 29, 287-313.

243. Kaplan, Steve, 1994, Top executive rewards and firm performance: A comparison of Japan and the United States, Journal of Political Economy 102, 510-546.

244. Kaplan, Steve and Bernadette Minton, 1994, Appointments of outsiders to

Japanese boards: Determinants and implications for managers, Journal of Financial Economics 36, 225-257.

245. Lang, Larry and Rene Stutz, 1994, Tobin’s Q, corporate diversification, and firm

performance, Journal of Political Economy 102, 1248-1280.

246. Lease, Ronald, John McConnell, and Wayne Mikkelson, 1983, The market value of control in publicly traded corporations, Journal of Financial Economics 11, 439-471.

247. Lease, Ronald, John McConnell, and Wayne Mikkelson, 1984, The market

value of differential voting rights in closely held corporations, Journal of Business 57, 443-467.

248. Malatesta, Paul and Ralph Walkling, 1988, Poison pill securities: Stockholder

wealth, profitability, and ownership structure, Journal of Financial Economics 30, 347-376.

249. Martin, Kenneth, and John McConnell, 1991, Corporate performance, corporate

takeovers, and management turnover, Journal of Finance 46, 671-688.

250. McConnell, John and Henri Servaes, 1990, Additional evidence on equity ownership and corporate value, Journal of Financial Economics27, 595-612.

251. Morck, Randall, Andrei Shleifer, and Robert Vishny, 1988, Management

ownership and market valuation: An empirical analysis, Journal of Financial Economics 20, 293-315.

252. Morck, Randall, Andrei Shleifer, and Robert Vishny, 1990, Do managerial

objectives drive bad acquisitions? Journal of Finance 45, 31-48.

253. Warner, Jerrold, Ron Watts, and Karen Wruck, 1988, Stock prices and top management changes, Journal of Financial Economics 20, 461-492.

254. Weisbach, Michael, 1988, Outside directors and CEO turnover, Journal of Financial Economics 20, 431-460.

255. Wruck, Karen, 1989, Equity ownership concentration and firm value, Journal of

Financial Economics 23, 3-28.

256. Yermack, David, 1997, Good timing: CEO stock option awards and company news announcements, Journal of Finance 52, 449-476.

257. Zingales, Luigi, 1994, The value of the voting right: A study of the Milan stock

exchange experience, Review of Financial Studies 7, 125-148.

BANKING

General studies

258. Berger, Allan N., and Gregory F. Udell, 1992, Some evidence on the empirical significance of credit rationing, Journal of Political Economy 100, 1047-1077.

259. Petersen, Mitchell, and Raghuram Rajan, 1995, The effect of credit market

competition on lending relationships, Quarterly Journal of Economics 110, 407-443.

260. Kroszner, Randall and Raghuram Rajan, 1994, Is the Glass-Steagall Act

Justified? A study of the US experience with universal banking before 1933, American Economic Review, 810-832.

261. Petersen, Mitchell, and Raghuram Rajan, 1994, The benefits of firm-creditor

relationships: Evidence from small business data, Journal of Finance 49, 3-37.

EXECUTIVE COMPENSATION

Surveys

262. Murphy, Kevin J., 1999, Executive compensation, in Handbook of Labor Economics Vol. 3, Part 2 (eds. O. Ashenfelter and D. Card), Elsevier.

General studies

263. Jensen, Michael C. and Kevin J. Murphy, 1990, Performance pay and top-

management incentives, Journal of Political Economy 98, 225-264. RISK MANAGEMENT

264. Allayanis, George and Eli Ofek, 2001, Exhchange rate exposure, hedging, and the use of foreighn currency derivatives, Journal of International Money and Finance 20, 273 – 296

265. Geczy, Christopher, Bernadette A. Minton, and Catherine Schrand, 1997, Why firms use currency derivatives, Journal of Finance 52, 1323-1354.

266. Tufano, Peter, 1998, The determinants of stock price exposure: Financial

engineering and the gold mining industry, Journal of Finance 53, 1015-1052.

267. Tufano, Peter, 1998, Agency costs of corporate risk management, Financial Management 27 (Spring), 67-77.

268. Tufano, Peter, 1996, Who manages risk? An empirical examination of risk

management practices in the gold mining industry, Journal of Finance 51, 1097-1137.