Essays in Corporate Finance

This dissertation is comprised of three essays about investment, technology transfer, and corporate governance mandates. The first essay, “Patent Acquisition, Investment, and Contracting”, examines the transfer of intellectual property via the secondary market for patents and asks how patent acquisitions interact with firm investment policy. I find that patent acquirers subsequently invest in more R&D, increase internal patenting, and eventually make new investments in CAPX. Firms with more technological expertise and investment opportunities acquire more patents. Patent sales are the dominant type of contract and maximize investment incentives; patent licenses frequently contain royalties, which induce underinvestment problems. Nevertheless, licensing can be explained in part by financial and strategic considerations. Licensing is more likely when buyers become financially constrained, when revenue can be shifted to low tax sellers, and when the buyer is a competitor acquiring rights to a valuable patent. Overall, these results suggest patent acquisitions are motivated by the pursuit of investment synergies, rather than innovation substitution, commercialization motives, or legal threats. The second essay, “What's your Identification Strategy? Innovation in Corporate Finance Research”, co-authored with Laurent Fresard and Jerome P. Taillard, studies the diffusion of techniques designed to identify causal relationships in corporate finance research. We estimate the diffusion started in the mid-nineties, lags twenty years compared to economics, and is now used in the majority of corporate finance articles. Consistent with recent theories of technology diffusion, the adoption varies across researchers based on individuals' expected net benefits of adoption. Younger scholars, holders of PhDs in economics, and those working at top institutions adopt faster. Adoption is accelerated through networks of colleagues and alumnis and is also facilitated by straddlers who cross-over from economics to finance. Our findings highlight new forces that explain the diffusion of innovation and shape the norms of academic research. The third essay, “Were non-independent boards really captured before SOX?”, exploits the legal implementation of rules used by the major US stock exchanges following Sarbanes-Oxley (SOX) to study the pre-SOX optimality of board structure. The rules allowed firms to change the legal independence of their board without changing personnel by reclassifying a director from non-independent to independent. Many firms required to change their board structure used reclassification in order to minimize the alterations they made to their pre-SOX board structure, and I call these “placebo firms”. This observation makes feasible a DDD test that identifies the effect of the mandate by comparing treatment firms to placebo firms. Consistent with the view that boards are chosen optimally, real outcomes (profitability) are better for placebo firms than treatment firms. The magnitude of the difference, 4.9 percentage points, is economically meaningful, implying that the constraint is a significant impediment to the conduct of firms targeted by the regulations. Increased profitability is accounted for by increased revenue and typically flat expenses, including investment levels

The statistical properties of solar wind temperature parameters near 1 AU

We present a long-duration ($\sim$10 years) statistical analysis of the temperatures, plasma betas, and temperature ratios for the electron, proton, and alpha-particle populations observed by the \emph{Wind} spacecraft near 1 AU. The mean(median) scalar temperatures are $T{\scriptstyle_{e, tot}}$ $=$ 12.2(11.9) eV, $T{\scriptstyle_{p, tot}}$ $=$ 12.7(8.6) eV, and $T{\scriptstyle_{\alpha, tot}}$ $=$ 23.9(10.8) eV. The mean(median) total plasma betas are $\beta{\scriptstyle_{e, tot}}$ $=$ 2.31(1.09), $\beta{\scriptstyle_{p, tot}}$ $=$ 1.79(1.05), and $\beta{\scriptstyle_{\alpha, tot}}$ $=$ 0.17(0.05). The mean(median) temperature ratios are $\left(T{\scriptstyle_{e}}/T{\scriptstyle_{p}}\right){\scriptstyle_{tot}}$ $=$ 1.64(1.27), $\left(T{\scriptstyle_{e}}/T{\scriptstyle_{\alpha}}\right){\scriptstyle_{tot}}$ $=$ 1.24(0.82), and $\left(T{\scriptstyle_{\alpha}}/T{\scriptstyle_{p}}\right){\scriptstyle_{tot}}$ $=$ 2.50(1.94). We also examined these parameters during time intervals that exclude interplanetary (IP) shocks, times within the magnetic obstacles (MOs) of interplanetary coronal mass ejections (ICMEs), and times that exclude MOs. The only times that show significant alterations to any of the parameters examined are those during MOs. In fact, the only parameter that does not show a significant change during MOs is the electron temperature. Although each parameter shows a broad range of values, the vast majority are near the median. We also compute particle-particle collision rates and compare to effective wave-particle collision rates. We find that, for reasonable assumptions of wave amplitude and occurrence rates, the effect of wave-particle interactions on the plasma is equal to or greater than the effect of Coulomb collisions. Thus, wave-particle interactions should not be neglected when modeling the solar wind.Comment: 23 pages, 3 figures, 6 tables, submitted to Astrophys. J. Suppl. on Jan. 30, 201

Overcoming Public Resistance to Carbon Taxes

Carbon taxes represent a cost-effective way to steer the economy toward a greener future. In the real world, their application has however been limited. In this paper, we address one of the main obstacles to carbon taxes: public opposition. We identify drivers of and barriers to public support, and, under the form of stylized facts, provide general lessons on the acceptability of carbon taxes. We derive our lessons from a growing literature, as well as from a combination of policy “failures” and “successes.” Based on our stylized facts, we formulate a set of suggestions concerning the design of carbon taxes. We consider the use of trial periods, tax escalators, environmental earmarking, lump-sum transfers, tax rebates, and advanced communication strategies, among others. This paper contributes to the policy debate about carbon taxes, hopefully leading to more success stories and fewer policy failures

Forefoot plantar multilobular noninfiltrating angiolipoma: a case report and review of the literature

<p>Abstract</p> <p>Background</p> <p>Soft tissue tumors of the feet are uncommon and there have been very few reports of large series in the literature. These tumors continue to present the clinician with one of the most difficult problems in medicine.</p> <p>Case presentation</p> <p>We present a case of a large multilobular noninfiltrating angiolipoma at the plantar surface of the forefoot. Only three cases occurring at the foot have been previously described. We report this new case due to unusual location of the tumor, the long duration (25 years) of its existence and the unique surgical approach for the tumor excision.</p> <p>Conclusion</p> <p>Surgical excision is the treatment of choice and adjuvant radiotherapy is indicated in select cases.</p