Annual Conference

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International Macroeconomics, Money & Banking

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May 2014

China's Growth, Stability, and Use of International Reserves

Joshua AIZENMAN, Yothin JINJARAK, Nancy P. MARION
Since the onset of the global financial crisis, China and the U.S. have reduced their current-account imbalances as a share of GDP to less than half their pre-crisis levels. For China, the reduction in its current-account surplus post-crisis suggests a structural change. Panel regressions for a samp...
Keywords: International reserves, current-account imbalances, financial crisis
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Annual Conference

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Corporate Finance

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May 2014

Do More Transparency & Disclosure Necessarily Enhance Firm Performance?

Suman BANERJEE, Ronald W. MASULIS, Sarmistha PAL
The present paper provides new evidence that the introduction of transparency and disclosure rules may not necessarily boost firm performance. Focusing on the introduction of the Transparency and Disclosure (T&D) reforms initiated in Russia in 2002, we use data on staggered implementation of the...
Keywords: Corporate governance reform, Transparency and Disclosure rules, Domestic and foreign listed firms, Q, Market-to-Book, EBIT-to-Asset ratio, Russia
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Annual Conference

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Corporate Finance

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May 2014

Financial Flexibility and Corporate Cash Policy

Tao CHEN, Jarrad HARFOLD, Chen LIN
Using variations in local real estate prices as exogenous shocks to corporate financing capacity, we investigate the causal effects of financial flexibility on cash policies of US firms. Building on this natural experiment, we find strong evidence that increases in real estate values lead to smaller...
Keywords: Financial Flexibility, Real Estate Prices, Cash Policy
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2014

Global Value Chains and Effective Exchange Rates

Shang-Jin WEI , Nikhil PATEL, Zhi WANG
The real effective exchange rate (REER) is one of the most cited statistics in open-economy macroeconomics. We show that the models used to compute these numbers are not rich enough to allow for the rising importance of global value chains. Moreover, because different sectors within a country partic...
Keywords: Global value chains, REER
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Annual Conference

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Corporate Finance

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May 2014

Restraining Overconfident CEOs through Improved Governance: Evidence from the Sarbanes-Oxley Act

Suman BANERJEE, Mark HUMPHERY-JENNER, Vikram NANDA
The literature posits that some CEO overconfidence benefits shareholders, though high levels may not. We argue adequate controls and independent viewpoints provided by an independent board mitigates the costs of CEO overconfidence. We use the concurrent passage of the Sarbanes-Oxley Act and changes ...
Keywords: Over-Confidence, Over-Investment, risk-taking, Quality of Investment, SOX, firm performance
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