We examine whether and how bidder complexity influences investor reactions to merger and acquisition (M&A) announcements. Using an established measure of complexity, we find a significant positive relationship between acquiring firm complexity and cumulative abnormal returns (CAR). This suggests that investors perceive more complex firms as capable and value-enhancing participants in M&A activities. The association is particularly strong for bidders with high operating risk, greater R&D intensity, and larger firm size. We also find that complex bidders tend to offer higher takeover premiums. Overall, our study contributes to the literature by demonstrating that bidder complexity is an important determinant of market reactions to M&A announcements.

We examine whether and how the magnitude of the CEO pay ratio affects dividend policy in the context of inequality-averse investors. Our results demonstrate a positive association between the two and remain robust to endogeneity concerns. We find that the CEO pay ratios positively affect dividends irrespective of whether CEO compensation contracts motivate risk-averse or risk-taking policy choices. This non-diverse effect on dividend policy across CEOs with different pay structures contradicts previous studies and highlights the wealth effect resulting from the SEC mandate. Further analyses reveal a negative effect of the pay ratio on cash holdings and investment inefficiency.

We revisit whether disclosures of negative Corporate Social Responsibility (CSR) incidents adversely affect firms' stock prices. While univariate tests reveal significant negative abnormal returns around incident announcements, the effect disappears once firm characteristics, industry, and time‐fixed effects are controlled for. We find no robust evidence that CSR incidents or firms' Environmental, Social, and Governance (ESG) commitments influence stock price reactions on the event day or across broader windows. These results suggest that previously documented negative market responses may be attributable to endogeneity. Our baseline results are consistent with informed trading behavior: short‐sellers do not increase activity in incident‐related stocks relative to either non‐incident firms or ESG‐aligned portfolios.

Technology-driven transformation compels firms to invest in both physical and human capital, particularly information technology (IT) talent. Using LinkUp job posting data, we examine how IT talent acquisition signals strategic intent and affects firm value. We find that IT hiring improves operational efficiency through automation in low-tech sectors and fosters innovation in high-tech sectors. These mechanisms reveal distinct pathways through which technology talent shapes firm dynamics. Moreover, IT hiring influences financial performance, risk management, organizational culture, and strategic decisions. Our results offer new insights into how strategic IT talent acquisition drives value creation and informs managerial and policy choices.

We examine the role of major customers in shaping firms' environmental, social and governance (ESG) practices. We find that firms with major customer relationships undertake fewer ESG activities compared to those without such ties. The association is attenuated when institutional ownership is high, firms are less diversified, customers exhibit greater bankruptcy risk and lower switching costs and during periods of elevated equity market sentiment. Taken together, our findings highlight that reliance on a concentrated customer base can weaken firms' incentives to engage in ESG practices, with important implications for supply chain sustainability.

This study introduces a new metric to evaluate a firm's intangible asset intensity, focusing on its ability to generate revenue from nonphysical assets. It finds a strong positive correlation between firm performance and both internally generated and externally acquired intangible assets. Firms with high intangible intensity outperform peers by 3% annually. The oversight of intangible assets is identified as a factor in value stocks' underperformance. Rigorous tests, including endogeneity checks, confirm these firms exhibit superior accounting quality, labour investment efficiency and acquisition returns. A framework highlights how managerial attributes enhance firm value through decision-making.

This study examines the endogenous market choice and its impact on underwriter spread if Alternative Investment Market (AIM) IPOs that meet Main Market (MM) listing requirements had issued equity in the MM during the 1995-2021 period. We find that the spread is 1.33% higher in the AIM than the MM for IPO listings that meet the MM listing requirements. This finding suggests that AIM companies, meeting the MM listing requirements, could have saved more than 100 pound million by going public through the MM than the AIM market. We also find that this spread differential is attributed to the issuing firms' market self-selection. We demonstrate that listing requirements in the MM have an impact on the gross spread. The Propensity score matching results show that AIM firms that meet the MM market listing requirements pay a 0.921% higher spread which is significant at a 1% level compared to the MM market IPOs.

We investigate whether firms engaging in corporate social responsibility (CSR) can preserve firm value during normal and unprecedented exogenous adverse events. Our evidence shows, in regular times, a negative relation between CSR engagement and firm value, but under adverse economic conditions, CSR protects firm value by decreasing firm risks. We also find that firms with high managerial attributes engage in greater CSR activities that benefit shareholders in both normal and aberrant financial times. Despite the controversy surrounding CSR, our evidence points out that CSR can be viewed as a set of intangible assets that can improve firm value across good and bad economic states when firms are run by high-attribute managers.

This paper proposes a theoretical model of the competition among high-frequency traders and its impact on market liquidity. First, the optimal strategies of high-frequency market-makers and corresponding effects are explored. Then two-sided quotes and high-frequency speculators are introduced to enrich our model. Furthermore, we calculate the equilibrium in steady-state and analyze parameters in the equilibrium. The empirical results, consistent with the predictions of our model, show that a lower exchange latency leads to a lower bid-ask spread and the market maker's preference for a two-sided quote. In addition, the speed and information advantages of the market-maker are beneficial to liquidity, while speculators consume liquidity. Furthermore, we employ intra-day data of OMXC20 and three major currency pairs (EUR/USD, USD/JPY, and GBP/USD) in the forex market to verify the predictions of our model.

We examine the effect of hedging with different derivative instruments on the market value of firms run by CEOs with different risk preferences - based on a noble dataset over five years. We focus on the interest rate, commodity, and foreign exchange derivatives and find striking similarities in the hedging intensities of risk-seeking and risk-averse CEOs. Our findings show that when the average firm experiences an extreme (three-standarddeviation) change in interest rates, commodity prices, or foreign exchange rates, its derivatives portfolio creates only modest gains, regardless of CEO risk preferences. These findings are consistent with the view that hedging is just an insurance policy, not a value-increasing strategy. Our results suggest that CEOs, irrespective of their different risk preferences, are unwilling to forgo wealth-creating projects to hedge corporate risks. (c) 2022 Elsevier Ltd. All rights reserved.

In this study, we examine whether and how CEO dismissal risk affects M&A megadeal activity, firm performance, and, ultimately, the fate of CEOs making risky investment decisions driven by their career concerns. We find that CEOs with higher exogenous dismissal risk engage in more M&A megadeal activity than their counterparts. Such acquisition decisions elicit significant negative market reactions and fail to improve acquirers’ post-merger profitability, suggesting that they are driven by CEOs’ dismissal risk and not by shareholders’ interests. Finally, we document that high-dismissal-risk CEOs encounter a higher likelihood of dismissal within two years following their poor M&A decisions.

This study examines whether and how major customers affect supplier firms Environmental, Social and Governance (ESG). We find that companies with higher customer concentration engage in less ESG activities. This association is attenuated for suppliers with fewer business segments, customers with higher bankruptcy risk and lower switching costs, and during elevated equity market sentiment periods. We also provide compelling evidence that companies with at least one major customer tend to exhibit a greater propensity to invest in technology and maintain a higher level of intangible assets. Collectively, our findings demonstrate that the composition of suppliers' customer base has a notable adverse effect on their level of engagement in ESG activities.

The momentum anomaly is widely attributed to investor cognitive biases, but the trigger of cognitive biases is largely unexplored. In this study, inspired by psychology studies linking cognitive biases to the noisiness of information, we examine whether momentum returns are associated with high stock price synchronicity, a manifestation of noisy firm-specific information. Our results demonstrate that momentum is more pronounced in the presence of high stock price synchronicity. This finding is robust to other explanations and firm characteristics. We also find that stock price synchronicity boosts the profitability of momentum by amplifying investor underreaction to new information.