The Effect of Foreign Competition on Corporate Tax Avoidance

Courtesy of Nader Atawnah, Balasingham Balachandran, Huu Nhan Duong, Jeffrey Pittman, and Edward Podolski The US Federal government deficit totaled $984 billion in 2019, representing 4.7% of GDP. Aggressive tax evasion and avoidance strategies by corporations are one contributing factor to this shortfall. By some accounts, profit shifting and tax evasion strategies reduce the IRS’s […]

The Death of Trust Across the Finance Industry

Courtesy of Peter Limbach, P. Raghavendra Rau, and Henrik Schürmann The financial sector plays a crucial role in a country’s economic development. For example, better developed financial systems are associated with faster economic growth, increased levels of technological innovation, and reduced poverty. A well-functioning financial system depends on the reliability of contracts and contractors. This […]

Theorizing Transnational Fiduciary Law

Courtesy of Seth Davis & Gregory Shaffer What do asset protection trusts in the Cook Islands and Alaska, the UN Environment Program’s “Fiduciary Duty for the 21st Century” report, and the Mitsubishi UFJ Trust and Banking Corporation have in common? They are all examples of transnational fiduciary law.[1] Fiduciary law is a global phenomenon. It […]

Private Information Acquisition via Freedom of Information Act Requests

Courtesy of Stephen Glaeser, Bryce Schonberger, Charles E. Wasley, and Jason Xiao Theoretical models explore when and why individuals incur costs to acquire information about a firm that is not publicly available (often referred to as private information acquisition). Empirical evidence of these theories’ implications is virtually non-existent due to the difficulty of observing private […]

Defining Appraisal Fair Value

Courtesy of Ben Lucy Appraisal is a statutory mechanism that allows dissenting shareholders of Delaware merger targets to petition the Court of Chancery for a judicial determination of the “fair value” of their shares. In the 2010s, appraisal rose from relative obscurity to the front lines of high-stakes commercial litigation and the front pages of […]

The Economic Implications of National Quarantines

Courtesy of Christos A. Makridis and Jonathan Hartley Although academic research on the COVID-19 pandemic began with a slow start, policymakers were grappling with challenges about the economic effects of the national containment strategy. Since real-time macroeconomic indicators will take some time to come in, we published a policy brief on April 6thbased on research […]

Valuing ESG: Doing Good or Sounding Good?

Courtesy of Bradford Cornell and Aswath Damodaran Using criteria based on environmental, social and governance (ESG) considerations has become an increasingly important aspect of investment decision making, particularly for high profile institutional investors. Investors, including some of the largest institutions, have added social responsibility criteria to their investing screens, and it was estimated that there […]

Feverish Stock Price Reactions to COVID-19

Courtesy of Stefano Ramelli* and Alexander F. Wagner** The outbreak of COVID-19 took the world economy by surprise. The topic ‘‘infectious diseases’’ was ranked number 10 in terms of impact in the World Economic Forum’s Global Risk Report 2020, published on January 15, 2020, but was considered quite unlikely. Instead, most corporate decision-makers and politicians […]

COVID-19 Market Protection: Close Down Stock Exchanges

Courtesy of Alexandra Andhov As COVID-19 continues to spread across continents, all economies begin to tremble and prepare for the worst. Companies, investors, and trading clients are turning to stock exchanges amid one of the most tumultuous periods in market history to borrow money, buy or sell assets, and limit losses in their holdings. Yet […]

Market Crashes and Merger Completions

Courtesy of Davidson Heath and Mark Mitchell* Recent movements in financial markets illustrate the proverb: “The market takes the stairs up and the elevator down.” After rising steadily through 2019 and reaching a new all-time high of 3,386 on February 19, 2020, over the next seven trading days the S&P 500 fell by 432 points, […]