Does Advertising Improve Access to Capital for Small Businesses?

Private markets have contributed significantly to capital formation in the U.S. economy, particularly for small companies that are often considered the engine for creating new jobs and for accelerating economic growth (see, e.g., Zhao, Harris, and Lam, 2019). The amount of capital raised in private markets has, in fact, outpaced that raised in public markets during recent years. In 2017, for example, $2.4 trillion was raised in U.S. private markets and $2.1 trillion raised in public ones. Almost 70 percent of the former amount came from private placements: sales of unregistered securities in private offerings, mostly to accredited investors.[1]Read more

The Dark Side of Hedge Fund Activism: Evidence from Employee Pension Plans

Shareholder activism is an investment strategy that investors such as hedge funds (HFs) use to increase the value of their investment by intervening in the management of a targeted firm. Activists can nudge management to take shareholder-friendly actions such as increasing dividends or share buybacks, doing spinoffs, or being acquired. Prior studies (reviewed by Brav, Jiang and Kim, 2009, 2015b) find that HF activism is quite successful in increasing shareholder wealth of targeted firms. However, there are two opposing views about how that happens. In the first view, activism increases the value of the target firm by enhancing firm productivity … Read more