This study examines how accounting has informed private equity diversification claims and demand for private equity investments. Despite research showing private equity lacks portfolio diversification benefits, those marketing private equity assets continue to emphasize its diversification value, and demand for private equity investments has surged. Exploiting the change in international accoun...

Investments in cybersecurity are critical to the national and economic security of a nation. There is, however, a strong tendency for firms in the private sector to underinvest in cybersecurity activities. This paper reports the results of a survey designed to empirically assess whether treating cybersecurity as an important component of a firm’s internal control system for financial reporting ...

We investigate young public biotechnology companies that raise additional capital utilizing offerings of private investments in public equity–so-called PIPE deals. Among 110 biotech firms that raise $5.5 billion in IPO proceeds during 1996 to 2004, 61 firms raise an additional $9.5 billion from 200 PIPE deals by the end of 2006. We study the timing and terms of such private placements in relati...

Private equity and venture capital investments in emerging markets grew significantly over the past five years (2003-2008), both in absolute and relative terms. In this study, we examine the industry's role in emerging markets, in terms of key actors, business processes, and impact on portfolio companies. We use a case study of private equity and venture capital in Egypt, and the Middle East an...

This paper examines how ownership structure and institutional development influence the liquidity management and investment policies of firms, in response to the threat of political extraction in China. First, we document evidence that firms controlled by private entrepreneurs hold less cash reserves than their state-owned counterparts. In addition, cash holdings (investments) is positively (ne...

I examine the capital expenditures of a sample of 700 takeover targets and firms that went private over the period 1972-1987. For the complete sample, I do not find evidence that takeover targets increase their capital expenditures over the fouryear period before the acquisition or that they overinvest in capital expenditures relative to several benchmarks. Subsample results provide some eviden...

This study addresses conservatism in financial reporting. Firms seek financing for an investment. Investors have access to an imperfect accounting signal that may also have a conservative tendency. If the firms have no private information, conservatism is desirable only for negative ex ante expected value investments, consistent with the spirit of the results of Gigler et al (2009) and other st...

This study explores how firms’ ownership structures affect their earnings quality and long-term performance. Focusing on a unique sample of private firms for which there is financial data available in the years before and after their initial public offering (IPO), I differentiate between those that have private equity sponsorship (PE-backed firms) and those that do not (non-PEbacked firms). The...