|The Compelling Case for Stronger and More Effective Leverage Regulation in Banking (October 2013)
Anat R. Admati
Society stands to benefit substantially if banks and other financial institutions were required to rely much more on money obtained by owners or shareholders (equity) thus reducing their leverage than current and proposed regulations allow.
|Unprofitable Affiliates and Income Shifting Behavior (October 2013)
Lisa De Simone, and Jeri K. Seidman
Results are consistent with income shifting to unprofitable affiliates being an important transfer pricing consideration for multinational firms; however, we also find evidence of risk sharing within multinational groups. Overall, results suggest that risk sharing and a shift-to-loss income shifting strategy both influence the unexpected profitability of unprofitable affiliates.
|The Impact of Venture Capital Monitoring: Evidence from a Natural Experiment (October 2013)
Shai Bernstein, Xavier Giroud, and Richard R. Townsend
Study examines whether venture capitalists contribute to the innovation and success of their portfolio companies, or merely select companies that are already poised to innovate and succeed.
|The Operational Consequences of Private Equity Buyouts: Evidence from the Restaurant Industry (October 2013)
Shai Bernstein, and Albert Sheen
Do private equity firms affect portfolio company operations? Or are changes a mere artifact of initial investment selection? We document significant operational changes in 101 restaurant chain buyouts between 2002 and 2012 using health inspection records for over 50,000 stores in Florida.
|Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity is Not Socially Expensive (October 2013 revision)
Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig and Paul C. Pfleiderer
We conclude that bank equity is not socially expensive, and that high leverage at the levels allowed by, for example, by the Basel III agreement is not necessary for banks to perform all their socially valuable functions and likely makes banking inefficient.
|Crowdsourcing Peer Firms: Evidence from EDGAR Search Traffic (September 2013)
Charles M.C. Lee, Paul Ma, Charles C. Y. Wang
Using Internet traffic patterns from the Securities and Exchange Commission Electronic Data-Gathering, Analysis, and Retrieval (EDGAR) website, researchers show that firms appearing in chronologically adjacent searches by the same individual are fundamentally similar on multiple dimensions. Results highlight the usefulness of EDGAR data, as well as the latent intelligence in search traffic patterns.