Empirical Corporate Finance

by Michael J. Brennan (Editor)

Overview

This four-volume collection contains a comprehensive selection of over 70 modern papers in empirical corporate finance. Empirical Corporate Finance also features a new introduction by the editor which explains the basis for the selection of the articles and relates the empirical findings they report to recent developments in corporate financial theory.

The volumes are arranged by subject matter, reflecting the broad stages in the life-cycle of the firm, starting with venture capital and initial public offerings, and then moving on to events that characterize corporate maturity: dividend policy, investment policy, corporate governance issues, and financing strategy. The volumes conclude with sections on takeovers and bankruptcy.

A major feature of the collection is its attention to the relation between corporate financial policy and the legal and economic framework within which the corporation operates; thus evidence is provided for the importance of asset resale markets as well as product markets for the capital structure decision; the legal framework is shown to be related to financing policies in different countries; and the existence of financial institutions such as banks and leasing companies is shown to have important consequences for financial policy. A pervasive theme of the volumes is the importance of informational asymmetries and agency relationships for understanding phenomena in corporate finance.

Empirical Corporate Finance will serve as a reference for professionals and MBA students who are concerned with the evidence on important issues such as initial public offerings, dividend policy, capital structure. The volumes will also serve, both as an introduction to the techniques of investigation in empirical corporate finance, and to the major substantive findings in the field for doctoral students; finally, they will be an invaluable source of reference to the most important work that has been done in each of the major areas of research.

Product Details

ISBN-13:	9781858984841
Publisher:	Edward Elgar Publishing
Publication date:	05/28/2001
Series:	The International Library of Critical Writings in Financial Economics series , #7
Pages:	2312
Product dimensions:	6.62(w) x 9.62(h) x (d)

About the Author

Edited by Michael J. Brennan, Goldyne and Irwin Hearsh Professor of Banking and Finance, University of California, Los Angeles, US

Table of Contents

Contents
Volume I
Acknowledgements
Foreword Richard Roll
Introduction Michael J. Brennan
PART I METHODOLOGY
1. Eugene F. Fama, Lawrence Fisher, Michael Jensen and Richard Roll (1969), ‘The Adjustment of Stock Prices to New Information’
2. Stephen J. Brown and Jerold B. Warner (1980), ‘Measuring Security Price Performance’
3. N.R. Prabhala (1997), ‘Conditional Methods in Event Studies and an Equilibrium Justification for Standard Event-Study Procedures’
4. John D. Lyon, Brad M. Barber and Chih-Ling Tsai (1999), ‘Improved Methods for Tests of Long-Run Abnormal Stock Returns’
PART II VENTURE CAPITAL AND INITIAL PUBLIC OFFERINGS
5. Bernard S. Black and Ronald J. Gilson (1998), ‘Venture Capital and the Structure of Capital Markets: Banks versus Stock Markets’
6. William A Sahlman (1990), ‘The Structure and Governance of Venture-Capital Organizations’
7. Joshua Lerner (1994), ‘Venture Capitalists and the Decision to go Public’
8. Roni Michaely and Wayne H. Shaw (1994), ‘The Pricing of Initial Public Offerings: Tests of Adverse-Selection and Signaling Theories’
9. Francis Koh and Terry Walter (1989), ‘A Direct Test of Rock’s Model of the Pricing of Unseasoned Issues’
10. Kathleen Weiss Hanley and William J. Wilheim, Jr. (1995), ‘Evidence on the Strategic Allocation of Unseasoned Issues’
11. Raghuran Rajan and Henri Servaes (1997), ‘Analyst Following of Initial Public Offerings’
12. Alon Brav and Paul A. Gompers (1997), ‘Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture and Nonventure Capital-Backed Companies’
PART III DIVIDEND POLICY AND EQUITY MANAGEMENT: SECONDARY OFFERINGS, SPLITS AND SHARE REPURCHASES
13. Roni Michaely, Richard H. Thaler and Kent L. Womack (1995), ‘Price Reactions to Dividend Initiations and Omissions: Overreaction or Drift?’
14. Pyung Sig Yoon and Laura T. Starks (1995), ‘Signaling, Investment Opportunities, and Dividend Announcements’
15. Theo Vermaelen (1984), ‘Repurchase Tender Offers, Signaling, and Managerial Incentives’
16. David Ikenberry, Josef Lakonishok and Theo Vermaelen (1995), ‘Market Underreaction to Open Market Share Repurchases’
17. Laurie Simon Bagwell (1992), ‘Dutch Auction Repurchases: An Analysis of Shareholder Heterogeneity’
18. Michael J. Brennan and Patricia J. Hughes (1991), ‘Stock Prices and the Supply of Information’
Name Index

Volume II
Acknowledgements
An introduction by the editor to all four volumes appears in volume I
PART I CORPORATE INVESTMENT POLICY
1. John J. McConnell and Chris J. Muscarella (1985), ‘Corporate Capital Expenditure Decisions and the Market Value of the Firm’
2. Steven N. Kaplan and Richard S. Ruback (1995), ‘The Valuation of Cash Flow Forecasts: An Empirical Analysis’
3. Eugene F. Fama and Kenneth R. French (1997), ‘Industry Costs of Equity’
4. Philip G. Berger, Eli Ofek and Itzhak Swary (1996), ‘Investor Valuation of the Abandonment Option’
5. Owen Lamont (1997), ‘Cash Flow and Investment: Evidence from Internal Capital Markets’
6. Olivier Jean Blanchard, Florencio Lopez-de-Silanes and Andrei Shleifer (1994), ‘What do Firms do with Cash Windfalls?’
PART II ORGANIZATIONAL STRUCTURE AND CONTROL
7. Randall Morck, Andrei Shleifer and Robert W. Vishny (1989), ‘Alternative Mechanisms for Corporate Control’
8. Luigi Zingales (1995), ‘What Determines the Value of Corporate Votes?’
9. Wayne H. Mikkelson and M. Megan Partch (1997), ‘The Decline of Takeovers and Disciplinary Managerial Turnover’
10. Jennifer E. Bethel, Julia Porter Liebeskind and Tim Opler (1998), ‘Block Share Purchases and Corporate Performance’
11. Benjamin C. Esty (1997), ‘Organizational Form and Risk Taking in the Savings and Loan Industry’
12. James A. Brickley and Frederick H. Dark (1987), ‘The Choice of Organizational Form: The Case of Franchising’
PART III AGENCY, INCENTIVES, AND OWNERSHIP
13. Charles J. Hadlock and Gerald B. Lumer (1997), ‘Compensation, Turnover, and Top Management Incentives: Historical Evidence’
14. Brian J. Hall and Jeffrey B. Liebman (1998), ‘Are CEOs Really Paid Like Bureaucrats?’
15. Rajesh K. Aggarwal and Andrew A. Samwick (1999), ‘The Other Side of the Trade-Off: The Impact of Risk on Executive Compensation’
16. Charles P. Himmelberg, R. Glenn Hubbard and Darius Palia (1999), ‘Understanding the Determinants of Managerial Ownership and the Link between Ownership and Performance’
17. David J. Denis, Diane K. Denis and Atulya Sarin (1997), ‘Agency Problems, Equity Ownership, and Corporate Diversification’
Name Index

Volume III
Acknowledgements
An introduction by the editor to all four volumes appears in volume I
PART I CORPORATE FINANCIAL POLICY
A The Role of the Legal Framework
1. Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert W. Vishny (1997), ‘Legal Determinants of External Finance’
B The Role of Taxation and Security
2. John R. Graham (1996), ‘Debt and the Marginal Tax Rate’
3. John R. Graham, Michael L. Lemmon and James S. Schallheim (1998), ‘Debt, Leases, Taxes, and the Endogeneity of Corporate Tax Status’
4. Michael J. Alderson and Brian L. Betker (1995), ‘Liquidation Costs and Capital Structure’
5. Mark Hoven Stohs and David C. Mauer (1996), ‘The Determinants of Corporate Debt Maturity Structure’
C The Role Of Private Incentives And Agency
6. Philip G. Berger, Eli Ofek and David L. Yermack (1997), ‘Managerial Entrenchment and Capital Structure Decisions’
D Debt as Precommitment
7. Assem Safieddine and Sheridan Titman (1999), ‘Leverage and Corporate Performance: Evidence from Unsuccessful Takeovers’
E Consequences for Valuation, Product Markets and Firm Survival
8. John J. McConnell and Henri Servaes (1995), ‘Equity Ownership and the Two Faces of Debt’
9. Judith A. Chevalier (1995), ‘Capital Structure and Product Market Competition: Empirical Evidence from the Supermarket Industry’
10. Dan Kovenock and Gordon M. Phillips (1997), ‘Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions’
11. Luigi Zingales (1998), ‘Survival of the Fittest or the Fattest? Exit and Financing in the Trucking Industry’
PART II CAPITAL MARKET FINANCING: TIMING AND SOURCE OF FUNDS
12. Kooyul Jung, Yeong-Cheol Kim and René M. Stulz (1996), ‘Timing, Investment Opportunities, Managerial Discretion, and the Security Issue Decision’
13. Tim Loughran and Jay R. Ritter (1995), ‘The New Issues Puzzle’
14. Tim Loughran and Jay R. Ritter (1997), ‘The Operating Performance of Firms Conducting Seasoned Equity Offerings’
15. Joel F. Houston and Michael D. Ryngaert (1997), ‘Equity Issuance and Adverse Selection: A Direct Test Using Conditional Stock Offers’
16. Larry Lang, Annette Poulsen and René Stulz (1995), ‘Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion’
PART III THE ROLE OF INTERMEDIATED FINANCE
17. Takeo Hoshi, Anil Kashyap and David Scharfstein (1991), ‘Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups’
18. Mitchell A. Petersen and Raghuram G. Rajan (1994), ‘The Benefits of Lending Relationships: Evidence from Small Business Data’
19. Mark Carey, Mitch Post and Steven A. Sharpe (1998), ‘Does Corporate Lending by Banks and Finance Companies Differ? Evidence on Specialization in Private Debt Contracting’
20. Mitchell A. Petersen and Raghuram G. Rajan (1997), ‘Trade Credit: Theories and Evidence’
21. Steven A. Sharpe and Hien H. Nguyen (1995), ‘Capital Market Imperfections and the Incentive to Lease’
Name Index

Volume IV
Acknowledgements
An introduction by the editor to all four volumes appears in volume I
PART I RISK MANAGEMENT
1. Peter Tufano (1996), ‘Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry’
2. Catherine Schrand and Haluk Unal (1998), ‘Hedging and Coordinated Risk Management: Evidence from Thrift Conversions’
3. Mitchell A. Petersen (1994), ‘Cash Flow Variability and Firm’s Pension Choice: A Role for Operating Leverage’
PART II CORPORATE ACQUISITIONS AND DIVESTITURES [241 pp]
4. Randall Morck, Andrei Shleifer and Robert W. Vishny (1990), ‘Do Managerial Objectives Drive Bad Acquisitions?’
5. Mark L. Mitchell and Kenneth Lehn (1990), ‘Do Bad Bidders Become Good Targets?’
6. Steven N. Kaplan and Michael S. Weisbach (1992), ‘The Success of Acquisitions: Evidence from Divestitures’
7. Larry H.P. Lang and René M. Stulz (1994), ‘Tobin’s q, Corporate Diversification, and Firm Performance’
8. Michael Bradley, Anand Desai and E. Han Kim (1988), ‘Synergistic Gains from Corporate Acquisition and their Division between the Stockholders of Target and Acquiring Firms’
9. Arthur Warga and Ivo Welch (1993), ‘Bondholder Losses in Leveraged Buyouts’
10. Richard A. Ippolito and William H. James (1992), ‘LBOs, Reversions and Implicit Contracts’
11. Sudha Krishnaswami and Venkat Subramaniam (1999), ‘Information Asymmetry, Valuation, and the Corporate Spin-off Decision’
PART III BANKRUPTCY, RE-ORGANIZATION AND LIQUIDATION
12. Todd C. Pulvino (1998), ‘Do Asset Fire Sales Exist? An Empirical Investigation of Commercial Aircraft Transactions’
13. Julian R. Franks and Walter N. Torous (1994), ‘A Comparison of Financial Recontracting in Distressed Exchanges and Chapter 11 Reorganizations’
14. Paul Asquith, Robert Gertner and David Scharfstein (1994), ‘Anatomy of Financial Distress: An Examination of Junk-Bond Issuers’
15. Stuart C. Gilson (1990), ‘Bankruptcy, Boards, Banks, and Blockholders: Evidence on Changes in Corporate Ownership and Control When Firms Default’
16. Hamid Mehran, George E. Nogler and Kenneth B. Schwartz (1998), ‘CEO Incentive Plans and Corporate Liquidation Policy’
Name Index

Editorial Reviews

'. . . this collection makes a timely contribution to the literature on the "new" corporate finance. An additional plus of the four volumes is that they are introduced by an excellent and exhaustive introduction by Brennan, setting the scene and summarising the main conclusions of the papers. . . the collection . . . will be extremely useful not only to finance specialists, but also to any other economist with an interest in financial economics.'

From the Publisher

This four-volume set contains 72 previously published articles (almost all published after 1990) that cover the main contemporary issues in the field of empirical corporate finance. Many of the articles represent a paradigm shift away from the idea that market forces constrain the freedom of individual actions towards the concept of regarding corporate finance as a social organization directed by intelligent, self-interested individuals. The volumes are arranged by subject matter, reflecting the broad stages in the life-cycle of the firm. A major feature is the attention paid to the relation between corporate financial policy and the legal and economic framework within which the corporation operates. Volume I is devoted mainly to raising new capital through venture capital and initial public offerings, and to equity management (dividends, share repurchases, secondary offerings, and splits). Volume II addresses corporate investment policy, organizational structure, and agency problems, particularly compensation arrangements. Volume III focuses directly on corporate financial policy and financing, covering topics such as taxation and leverage. Volume IV discusses modern technique of corporate risk management, acquisitions and divestitures, and bankruptcy and related issues. There is no subject index. Editing is by Michael J. Brennan (banking and finance, U. of California and London Business School). Annotation c. Book News, Inc., Portland, OR (booknews.com)

Booknews