• After a disaster, recovery is faster in less competitive banking markets. Banks market power matters for the supply of mortgage credit. do not increase C&I lending, because firms prefer to use SBA disaster loans. Profitable, and well-capitalized banks originate most Following natural rate economic growth recovers A 10% reduction competition increases by 0.3%. In markets, respond increasing re...

This paper examines conditions under which one firm’s product-line expansion can cause all firms to be more profitable in horizontally-differentiated markets. While one may expect that a firm’s profits would decrease when a competitor expands its product line because the firm loses some sales to the new product, this intuition is incomplete because a competitor’s product-line expansion can also...

W investigate differences in the dynamics of marketing decisions across geographic markets empirically. We begin with a linear-quadratic game involving forward-looking firms competing on prices and advertising. Based on the corresponding Markov perfect equilibrium, we propose estimable econometric equations for demand and marketing policy. Our model allows us to measure empirically the strategi...

Article history: Received 24 September 2008 Received in revised form 19 January 2009 Accepted 15 April 2009 Available online 3 May 2009 We study a model in which future financing constraints lead firms to have a preference for investments with shorter payback periods, investments with less risk, and investments that utilize more pledgeable assets. The model also shows how investment distortions...

This paper considers the effect of tort liability reforms on medical malpractice and general liability insurance markets. The primary reforms analyzed were damages caps and other liability reforms. These reforms decreased premiums, reduced losses, and improved the profitability of insurance companies based on evidence using detailed individual company by state data from the National Association...

We show that bundling is the optimal pricing strategy for a base good monopolist who also supplies a supplemental good under zero marginal cost of production. Without the exit of the rival firm, bundling is a profitable strategy because it increases the profits in the base good market. We show that bundling lowers social welfare as well as rival firms’ profit if the supplemental goods are close...

This paper develops a theory that predicts why firms organize their knowledge workers as employees vs. independent contractors and predicts the performance implications of this choice. It then employs a newly constructed data set to empirically examine this organizing choice, which our theory predicts will be driven by contracting difficulties arising from expropriation concerns, measurement co...

Three factors significantly influence profit repatriations by U.S. multinational firms: tax considerations, domestic financing and investment needs, and agency problems inside firms. Dividend repatriations are surprisingly persistent and resemble dividend payments to external shareholders. Tax considerations are influential but not decisive. Affiliates whose organizational forms carry differing...

In this paper, I consider a dynamic trade-off model of financing with difference in beliefs between the manager and investors. In the model, investors update more readily on earnings announcements than the manager does. The model offers a parsimonious treatment of endogenous financing, payout, and cash policies. The model generates a broad set of well-documented empirical facts that are difficu...

Part of the vision underlying CDP (formerly the Carbon Disclosure Project) is to enhance firms’ climate change strategies by encouraging them to measure their emissions and corresponding risks and opportunities. Drawing on interviews with 38 firms in 7 countries that disclosed to CDP, we find that the benefits firms experience from the measurement and disclosure process are more diverse in natu...