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In a comprehensive sample of takeovers from 1983-2020, we show that credit market conditions predict takeover activity. A deterioration in aggregate credit quality predicts an increase in the number and aggregate value of takeovers in years two and three, particularly for cash-financed deals, and lower activity in years five and six. We find similar results in international samples and when omitting the financial crisis. Worse aggregate credit quality predicts higher firm-level debt issuance and probability of a cash-financed deal announcement over the following three quarters. Our results are consistent with a framework with biased credit market investors and rational managers.

Answering causal questions with generalizable results is challenging. Estimators requiring pseudo-randomization provide estimates with …

We show empirically that firms increase cash holdings starting as early as one year before prescheduled (i.e., predictable) elections. …

Causal forest is part of a growing class of doubly-robust machine learning based estimators that non-parametrically recovers …

We use M&A deal-level data and gubernatorial elections in a difference-in-difference framework to ask whether political uncertainty …

United States Senators’ equity trades outperformed the market before 60 Minutes exposed arguably unethical trading activity by …

I examine the link between political uncertainty and firm investment using U.S. gubernatorial elections as a source of plausibly …

We study how the delisting of a firm’s stock, and the accompanying drop in liquidity, causally affects a firm’s real economic …