This work explores the relationship between price of crude oil and its production through an empirical study on regions Organization Petroleum Exporting Countries (OPEC) non-Organization (non-OPEC). The has recently been fluctuating greatly that it cannot be predicted; this fluctuation causes changes in prices raw materials for everyday life, thus affecting economy worldwide. To better understa...

Acquirer cumulative abnormal returns (CARs) have been investigated intensively for more than three decades. CARs measure shareholders’ wealth changes conditional upon a deal announcement. The unconditional acquirer shareholders’ expected profit is, however, the product of the acquirer’s CAR and the probability of making the acquisition. This probability element has been mostly overlooked in the...

We show that sovereign debt impairments can have a significant impact on financial markets and real economies through a credit ratings channel. Specifically, we find that firms reduce their investment and reliance on credit markets due to a rising cost of debt capital following a sovereign rating downgrade. We identify these effects by exploiting exogenous variation on corporate ratings due to ...

We examine how insiders and firms trade when arbitrage is limited. When arbitrage is costly (proxied by high idiosyncratic risk), insiders and firms earn higher absolute returns on their trades (insider trading, share repurchases, and seasoned equity offerings) in the following year. Furthermore, they initiate their trades following greater past price movements in the preceding year. These resu...

Some studies have provided evidence that dual class shares reduce firm market value. Other studies have shown that dual class shares are more common in countries where the proxies for private benefits of control are low. In this paper we explore whether the negative relation between firm market value and dual class shares can be explained by lower takeover probability. For family controlled fir...

To ascertain whether the form of managerial compensation affects a firm’s long-term operating performance, we track IPOs for five years after the expiration of the stabilization period. New public companies perform better when managers receive a balanced combination of stock option grants and equity ownership. Firms with unbalanced compensation arrangements, large option grants and little equit...

I evaluate a bank’s incentives to implement a risk sensitive regulatory capital rule. The decision making is analyzed within a real options framework where optimal policies are derived in terms of threshold levels of risk. The bank’s customers, lenders, and other outsiders may influence the optimal decision. Outsiders may make it optimal for the bank to implement the risk sensitive rule earlier...

This study investigates the predictability of firm values for venture capital-backed firms. Having insights into the internal documents of more than 300 venture capitalists, we derive three common categories of firm value drivers: team characteristics, firm and market characteristics, and accounting information. Based on these value drivers, we provide a regression based valuation approach, whi...

We consider a setting in which two potential buyers, one with a prior toehold and one without, compete in a takeover modelled as an ascending auction with participating costs. The toeholder is more aggressive during the takeover process because she is also a seller of her own shares. The non-toeholder anticipates this extra-aggressiveness of the toeholder. Thus, the non-toeholder is deterred fr...