Jul 2026· Journal of Financial Research· 0 citations· 37 references
Abstract
We examine how government subsidies alter corporate control activity in publicly traded U.S. firms. Using a panel from 2000–2022 that links Good Jobs First subsidy records with Bloomberg merger and acquisition (M&A) data, we find that subsidies increase firms’ likelihood of becoming acquirers while reducing their probability of becoming acquisition targets. Acquisitions of subsidized targets generate negative acquirer returns, indicating possible value destruction, consistent with free cash flow theory. Subsidized firms are also more likely to divest assets around M&A activity than non‐subsidized firms. Our results reveal how subsidies unintentionally alter recipient M&A incentives and dampened market discipline.
This study examines how labor protection affects the dynamics of corporate cash policy. Using the staggered adoption of U.S. state‐level wrongful discharge laws, we find that stronger labor protection reduces the speed of cash adjustment by 16.7%. The effect is asymmetric, concentrated among cash‐rich firms, and more...
Rong-Bing Xiao, P. Asimakopoulos, Fangming Xu et al.· The Financial Review· 0 citations
The paper explores how a small low-tax economy is affected by foreign corporate-tax shocks. To address this question, I develop a dynamic general-equilibrium model, in which multinational firms engage in both tangible and intangible FDI. Intangible assets arise from multinationals' R&D activities. Each multinational de...
This study examines how the implied cost of capital(ICC) effects a firm's financing and investment decisions. We find that firms with lower ICC rely more on equity financing and undertake larger mergers and acquisitions. These findings indicate that ICC captures both equity mispricing and a firm's ability to generate v...
Stephen P. Ferris, Tomas Mantecon, Shiang Liu· Quarterly Journal of Finance· 0 citations
We examine how state ownership and CEO financial incentives jointly condition the market valuation of acquisition‐related leverage adjustments in 2251 completed M&A deals by Chinese A‐share listed acquirers (2013–2023). Acquirers draw on spare financing capacity at deal completion, with larger leverage increases amon...
Chungsheng Lin, Joseph C. P. Shieh, Hao Fang et al.· Economics & Politics· 0 citations
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