Publications

This paper examines the optimal degree of centralization that can be achieved with respect to bailout policies when a central authority cannot supervise the entire banking system of the economy. Part of the banking system is supervised by a local…

Systematic risk is an important determinant of corporate capital structure. A one standard deviation increase in asset beta corresponds to a decrease in leverage of 13%, controlling for total asset volatility. This evidence is consistent with…

We examine a firm’s price-to-earnings (P/E) and price-to-book (P/B) ratios in a model of sequential capacity investments. Our analysis focuses on several key variables, including past and anticipated future investment growth, economic…

This paper considers a dynamic model of the evolution of open-source software projects, focusing on the evolution of quality, contributing programmers, and users who contribute customer support to other users. Programmers who have used open-…

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset…

Increasingly, private firms are focusing on environmental sustainability. However, such entities continue to experience difficulty in operationalizing sustainable practices in management decisions. For firms that own natural ecosystems, part of…

In this overview article, we summarize recent research in progress that examines the potential and limitations of non-violent civil disobedience through the lens of the evolution of an iconic success: India’s struggle for democratic self-…

On March 5, biotechnology company Chimerix refused to provide a potentially life-saving drug to 7-year old Josh Hardy who was battling cancer. The drug had not yet received FDA approval, and the company had discontinued its “…

The relationship between organizational culture and financial performance remains elusive even though researchers have studied it for some time. Early research suggested that a strong culture that aligns members’ behavior with organizational…

The popularity of the social networking site Facebook (FB) has grown unprecedented during the past five years. The research question investigated is whether posts on FB would also be applicable for the prediction of users’ psychological traits…

Net income adjustments resulting from mandatory 2005 IFRS adoption in Europe are value relevant for financial and non-financial firms. Differences in relevance of the aggregate adjustment and adjustments related to several IFRS standards, for…

I study public liquidity provision in a liquidity-constrained economy in which government policy is decided by politicians subject to rent-seeking and electoral constraints. Public interventions are modeled as a choice between direct fiscal…

We evaluate the performance of private equity (PE) funds, using a variance decomposition model to separate skill from luck. We find a large amount of long-term persistence, and skilled PE firms outperform by 7% to 8% annually. But this…

Debt maturity influences debt overhang, the reduced incentive for highly levered borrowers to make real investments because some value accrues to debt. Reducing maturity can increase or decrease overhang even when shorter term debt’s value…

Previous research suggests that people draw inferences about their attitudes and preferences based on their own thoughtfulness. The current research explores how observing other individuals make decisions more or less thoughtfully can shape…

Folk wisdom suggests playing hard to get is an effective strategy in romantic attraction. However, prior research has yielded little support for this belief. This article seeks to reconcile these contrasting views by investigating how 2…

This article discusses the role of GAAP accounting from an investor’s perspective.  For all its flaws, a historical-based system of accounting is vital to the investment community, and I believe moves toward fair value accounting should…