This study demonstrates how winning prestigious CEO awards generates significant value by enhancing stakeholder trust. We find that award-winning CEOs substantially strengthen relationships with key stakeholders: employees, suppliers, customers, and strategic partners, resulting in improved corporate performance. This positive effect is particularly pronounced in high-trust regions and firms with complex managerial environments, suggesting that superstar CEOs effectively leverage their elevated status to build valuable stakeholder relationships. Through robust empirical analyses, we demonstrate that CEO awards cultivate stakeholder trust. Furthermore, firms where these awards translate into stronger stakeholder ties achieve meaningful gains in corporate performance, moderating the post-award underperformance.
During Greece's debt crisis, zombie firms and non-performing loans reached 20% and 50%. Drawing on a 2002-2021 panel, we show zombies suppress investment, employment and productivity, with heterogeneous impact across sectors and firm characteristics. Higher zombie density hinders investment among healthy firms, particularly smaller ones. Effects on productivity are mixed: negative and more pronounced for larger firms, while healthy firms need to increase productivity to survive in high-concentration sectors. Following a twin deficit crisis, capital reallocation frictions weigh more on tradable sectors, constraining healthy firms' recovery. Tackling zombies is a key policy priority to improve resource allocation.
Zero-leverage firms remain a puzzle in corporate finance. We propose a supply-side mechanism linking environmental impact to debt access. Because creditors favour firms with high negative externalities and strong cash flows, environmentally friendly firms with high initial costs face tighter credit constraints. Using a theoretical model and a bivariate probit on 1113 firms across 54 countries (2011-2024), we show that positive environmental impact significantly reduces debt availability. The effect varies with firm development, industry environmental sensitivity, environmental regulation and Environmental, Social and Governance (ESG) performance. The findings highlight the importance of jointly estimating debt demand and supply.
This paper examines whether Toxic Secrecy Bans, state laws restricting overly broad non-disclosure agreements, affect stock price crash risk. Exploiting the staggered adoption of these bans across US states as a quasi-natural experiment, we find that Toxic Secrecy Bans significantly reduce crash risk. Consistent with an employee-voice mechanism, EEOC complaints and negative workplace disclosures increase following adoption. Effects are stronger among firms with lower employee satisfaction, weaker ethical cultures, and greater ownership monitoring, but weaker in high-unemployment environments. The bans also improve firms' governance, social, and community performance. Overall, Toxic Secrecy Bans enhance transparency and constrain managerial bad-news hoarding.
Using a worldwide sample of equity mutual funds, we document a new stylized fact: the flow-performance sensitivity (FPS) is greater for both bottom and top performance, compared to the middle. This "U-shaped" FPS is especially strong in down markets, for small/mid-cap funds, and in the latest decade. These results hold over quarterly or yearly return horizons, while at the 3-year horizon the conventional convex flow-performance relationship prevails. We rule out explanations based on proportional participation costs and cross-sectional heterogeneity in FPS. Our findings are most consistent with a first-mover advantage in redemptions (i.e. strategic complementarities) and increased fragility.
