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Full-Text Articles in Business
Ceo Compensation And Risk-Taking At Financial Firms: Evidence From U.S. Federal Loan Assistance, Amar Gande, Swami Kalpathy
Ceo Compensation And Risk-Taking At Financial Firms: Evidence From U.S. Federal Loan Assistance, Amar Gande, Swami Kalpathy
Amar Gande
We examine whether risk-taking among the largest financial firms in the U.S. is related to CEO equity incentives before the 2008 financial crisis. Using data on U.S. Federal Reserve emergency loans provided to these firms, we find that the amount of emergency loans and total days the loans are outstanding are increasing in pre-crisis CEO risk-taking incentives – “vega”. Our results are robust to accounting for endogeneity in CEO equity incentives and selection of financial firms into emergency loan programs. We also rule out the possibility that our results are driven by a bank’s funding base, bank complexity, CEO overconfidence, …
Suppliers, Investors, And Equity Market Liberalizations, Martin Strieborny
Suppliers, Investors, And Equity Market Liberalizations, Martin Strieborny
Martin Strieborny
Allowing foreign investors to acquire equity stakes in domestic firms stimulates the real economy by promoting frictionless relationships between buyers and suppliers of intermediate goods. I combine insights from research on financial liberalization and relationship-specific investment to derive this hypothesis and then use a difference-in-difference empirical framework to test it. Results from panel-data and event-study estimations confirm that equity market liberalizations boost output growth particularly in suppliers-dependent industries that require a high share of specialized inputs in their production process. Financial openness can thus facilitate smooth interactions between firms and an important corporate stakeholder - suppliers of crucial production inputs.