Go-shop provisions have changed the way in which private equity firms execute public-company buyouts. While there has been considerable practitioner commentary on go-shops in the three years since they first appeared, this paper presents the first systematic empirical evidence on this new dealmaking technology. Contrary to the claims of prior commentators, I find that: (1) goshops yield more se...

This paper explains why the evidence on the relation between litigation risk and initial public offering (IPO) underpricing is mixed. Two reasons are behind the nonstationary relation. First, the increasing usage of Directors and Officers’ liability insurance arguably reduces the need to use underpricing to insure against litigation liability to a limited extent. Second, class action lawsuits o...

Scholars working in the ‘law and finance’ field have investigated empirically the links between various types of law and the incidence of venture capital finance. However, no study to date has systematically investigated the relationship between insolvency law— both personal and corporate—and venture capital finance. This paper argues that a nation’s personal insolvency law may have an importan...

One way to improve the reliability of a network is through physical diversity, i.e., via routing of trafic between a given pair of nodes in the network over two or more physically-disjoint paths such that if a node or a physical link fails on one of the disjoint paths, not all of the trafic is lost. Alternatively, enough spare capacity may be allocated on the individual paths such that the lost...

The inherent conflicts of interest in the auditor–client relationship and the unobservability of financial statement quality are likely culprits in the recent corporate scandals such as Enron and WorldCom. The solution proposed here is a financial statement insurance (FSI) mechanism. Instead of appointing and paying auditors, companies would purchase financial statement insurance that provides ...

I address the problem of corporate governance. I o¤er a theory of CEO replacement, using Nash bargaining game. CEO replacement involves the board monitoring of the CEOs and the CEO succession policy, which is in regards to the inside promotion or the outside recruiting of the new CEO when the incumbent CEO is …red. I argue that CEO replacement decisions made by the incumbent CEO and the incumbe...

The binding of 125I-labeled mouse epidermal growth factor (EGF) to 18 cell lines, including HeLa (human carcinoma), MDCK (dog kidney cells), HTC (rat hepatoma), K22 (rat liver), HF (human foreskin), GM17 (human skin fibroblasts), XP (human xeroderma pigmentosum fibroblasts), and 3T3-L1 (mouse fibroblasts), was inhibited by saccharin and cyclamate. The human cells were more sensitive to inhibiti...

This paper examines the differences in accrual-based and real earnings management across countries from the perspective of investor protection. Following prior research (Leuz et al., 2003), we hypothesize that accrual-based earnings management is more constrained by strict discipline in countries with stronger investor protection. For real earnings management in countries with stronger investor...

This paper examines capital market effects of changes in securities regulation. We analyze two key directives in the European Union (EU) that tightened market abuse and transparency regulation and its enforcement. All EU member states were required to adopt these two directives but did so at different points in time. Our research design exploits this differential timing of the same regulatory c...

We examine whether institutional investors, and specifically underwriters, have an information advantage over other market participants in new public companies. We focus our attention on a sample of publicly traded firms that have become the target of an IPO-related securities class action lawsuit filed under Section 11 of the 1933 Securities Act between January 1991 and December 2006 and a mat...