21 research outputs found
Choosing to Cofinance: Analysis of Project-Specific Alliances in the Movie Industry
No full textWe use a movie industry project-by-project dataset to analyze the choice of financing a project internally versus financing it through outside alliances. The results indicate that project risk is positively correlated with alliance formation. Movie studios produce a variety of films and tend to develop their safest projects internally. Our findings are consistent with internal capital market explanations. We find mixed evidence regarding resource pooling, i.e., sharing the cost of large projects. Finally, the evidence shows that projects developed internally perform similarly to projects developed through outside alliances. The Author 2007. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please email: [email protected], Oxford University Press.
Do Country-Level Investor Protections Impact Security-Level Contract Design? Evidence from Foreign Bond Covenants
No full textBetter legal protection of investors in a country is a central theme of international corporate governance research. However, investor protections can be derived not only from legal rights provided by countries’ laws but also from rights attached to individual securities at the issuer’s discretion. Using a cross-country sample of restrictive covenants attached to public corporate bonds, we show that countries’ legal investor protections impact security level contract design. When the legal protection of investors in a country is weak, investors are more likely to require security level protections that limit potentially opportunistic actions of managers. The findings suggest that sophisticated issuers and investors can create international contracts that adapt to weak legal institutions and therefore add to our understanding of how the overall investor protection environment is formed
Do Country-level Investor Protections Affect Security-level Contract Design? Evidence from Foreign Bond Covenants
No full text
Do Country Level Investor Protections Impact Security Level Contract Design? Evidence from Foreign Bond Covenants
No full text
Dead Hand Proxy Puts and Shareholder Value
No full textWe study the impact of Dead Hand Proxy Puts on shareholder value. Courts and commentators have characterized these terms as defenses against hedge fund activism that threaten to reduce firm value by entrenching underperforming managers and thereby increasing managerial agency costs. Our findings contradict this view. Using three court cases as a natural experiment, we find that shareholders do, not react negatively to the inclusion of a Dead Hand Proxy Put in a firm\u27s loan agreements. Not only do Dead Hand Proxy Puts not destroy firm value, they may even preserve it by deterring activists who would seek to extract wealth from creditors and other nonshareholder constituencies. We develop the policy implications of these findings and offer a direction for the evolution of legal doctrine in this area
