How Noisy Data Can Help Firms Pick Better Managers

By Felix Feng, Wenyu Wang, Yufeng Wu and Gaoqing Zhang September 4, 2024 by renholding

High-quality information and managers are essential to firms’ success, with the former allowing firms to accurately evaluate prospective investments and the latter helping to ensure those investments pay off. Yet the value of information and managers to a firm are …

The Millennial Corporation: Strong Stakeholders, Weak Managers

By Michal Barzuza, Quinn Curtis and David H. Webber March 20, 2024 by renholding

After several years of dramatic growth, ESG investing seems to have entered a period of retrenchment. While it is impossible to predict the future trajectory of ESG, the movement has revealed important structural features of our financial system and the …

Sullivan & Cromwell Discusses Treasury Department Principles for Net-Zero Financing and Investment

By C. Michelle Chen, Marc Treviño and Alexander LePore Jr. October 5, 2023 by renholding

On September 19, 2023, the U.S. Department of the Treasury released nine principles for net-zero financing and investment by financial institutions.[1] The Principles focus on “scope 3” financed and facilitated greenhouse gas emissions (i.e., indirect emissions included …

How the Rise of Corporate Debt in Emerging Economies Affects Corporate Investment

By Tiago Loncan, Styliani Panetsidou and Angelos Synapis September 30, 2022 by renholding

In recent years the corporate debt landscape in emerging markets has changed substantially. Debt in emerging economies climbed to a record high of $55 trillion in 2018, illustrating the largest and fastest surge in the last five decades. In …

New Department of Labor Investment Rules Could Be Big Win for Everyone but Labor

By David H. Webber March 28, 2022 by renholding

Few constituencies benefited more from the election of Joe Biden than the socially-responsible investor community, which saw the most-hostile presidential administration replaced by the most supportive.[1] The point is best illustrated by the departure of Labor Secretary Eugene Scalia, …

How Effective Start-up Governance Attracts Investors

By Mircea Epure and Martí Guasch April 24, 2020 by renholding

In a recent paper, we argue that outside investors are cautious about financing start-ups because such companies often lack a track record and tend to be managed in a less-than professional manner, with founders sometimes putting their own interests …

How Does Soft Information Affect External Firm Financing?

By Thomas Chemmanur, Harshit Rajaiya and Jinfei Sheng January 24, 2020 by renholding

In recent years, there have been significant changes in the information environment facing firms. In particular, the explosive growth in computing power and the reduction in the costs of disseminating economically relevant information due to the widespread use of the …

SEC Chairman Announces Roundtable on Management, Reporting, and Regulation

By Jay Clayton May 22, 2019 by renholding

Our capital markets benefit from a level of retail investor participation that is unparalleled among the world’s large industrialized countries. Our Main Street investors who, day in and day out, put their hard-earned money to work for the long term

…

Vanguard Talks New Proxy Voting Guidelines With PJT Camberview

By PJT Camberview May 2, 2019 by renholding

Vanguard recently made three significant announcements, including an update to its proxy voting guidelines, changes to proxy voting responsibilities for its external managers and a commentary on its views and approach to corporate governance and sustainable investing.

On Friday, April

…

Opening the Black Box of Companies’ Capital Investment Process

By Gilles Hilary, Mark (Shuai) Ma and Wenjia Yan April 16, 2019 by renholding

In spite of intensive academic research on capital expenditure efficiency, how firms make investment decisions remains largely a black box. We analyze that process by dividing it into two stages: budgeting of capital expenditures (CapEx) and execution of the budget. …

Debt Overhang, Rollover Risk, and Corporate Investment: Evidence from the European Crisis

By Sebnem Kalemli-Ozcan, Luc Laeven and David Moreno April 11, 2019 by renholding

Investment expenditure in Europe collapsed in the aftermath of the 2008 global financial crisis. This collapse followed a boom during which the corporate sector borrowed heavily (Gopinath, Kalemli-Ozcan, Karabarbounis, Villegas-Sanchez, 2017). Figures 1 and 2 illustrate the extent of the …

Putting Technology to Good Use: The Role of Corporate, Competition, and Tax Law

By John Armour, Luca Enriques, Ariel Ezrachi and John Vella February 14, 2019 by renholding

Innovation and its main output, technology, are changing the way we work, socialize, vote, and live. New technologies have improved our lives and made firms more productive, raising living standards across the world. Thanks to progress in information technology, the …

Debevoise Discusses Possible EU Approach to ICOs and Crypto-Assets

By Klaudius Heda, Clarisse Hannotin, Dr. Oliver Krauß and Dr. Friedrich Popp January 30, 2019 by abirvarma

In the first week of 2019, both the European Securities and Markets Authority (“ESMA”) and the European Banking Authority (“EBA”) issued reports advising EU legislators on the regulation of “crypto-assets” and initial coin offerings (“ICOs”). The European Supervisory Authorities (“ESAs”), …

List Voting and the Role of Minority Shareholders at Controlled Companies

By Maria Lucia Passador January 25, 2019 by renholding

Given the need to strengthen protection for minority shareholders, Italy has moved towards a more efficient corporate governance system by introducing mandatory list voting for listed corporations. List voting in Italy requires the election of at least one director and …

How Patents’ Disclosure Role Can Ease Market Uncertainty

By Ali Mohammadi, Mehdi Beyhaghi and Pooyan Khashabi August 31, 2018 by renholding

In addition to providing legal protection, patents serve a disclosure function aimed chiefly at inventors and technology customers. However, the effect of this disclosure on capital markets has been left largely unexamined in the literature, creating a gap in understanding …

How Markets Learn to Value the Financial Performance of Socially Responsible Firms

By Zhichuan Frank Li, Jun Wang and Chong Yu August 30, 2018 by renholding

Market reactions to a company’s performance on environmental and other social issues are ambiguous, because it is difficult to measure social and financial performance and how they affect each other. We, however, create a virtual value-weighted portfolio based on the …

The Role of Relationships and Informal Norms in Entrepreneurial Finance

By Brian J. Broughman August 14, 2018 by renholding

Contracting parties in an on-going relationship often rely on informal norms to resolve disputes and reduce transaction costs. Known as “relational contracting,” this concept is typically studied in the context of procurement contracts between manufacturers and suppliers,[1] but it …

Do Financial Analysts Help Improve Firm Productivity?

By Marco Navone, Eliza Wu and Thomas To August 7, 2018 by renholding

Academic researchers in corporate finance have in recent years taken a renewed interest in the impact of private firms on employment, growth, and other positive developments in national economies. In a recent article, we develop this new field of research …

Paul Weiss Discusses Issues With Private Equity Transactions After New Tax Law

By Matt Abbott, Angelo Bonvino, Marco Masotti, Lindsay Parks, Scott Sontag and Taurie Zeitzer July 11, 2018 by renholding

On December 22, 2017, President Trump signed Public Law No. 115-97, formerly known as the “Tax Cuts and Jobs Act” (the “Act”), into law. The Act makes a number of major changes to the U.S. federal income taxation of both …

How Institutional Cross-Ownership Affects Corporate Financing of Investment Opportunities

By Yangyang Chen, Qingyuan Li and Jeffrey Ng June 27, 2018 by renholding

Public firms are increasingly connected through institutional investors’ stock ownership, largely due to individual investors who invest excess cash and retirement savings through financial institutions. Firms with institutional cross-ownership have institutional stockholders with significant stakes in other firms within the …

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