Using hand‐collected data on divisional managers at S&P 500 firms, we study their role in
internal capital budgeting. Divisional managers with social connections to the CEO receive …

Paper aims The purpose of this article is to identify the research opportunities in capital
budgeting. Originality This research contributes to the literature by providing a methodology …

Equity capital allocation plays a particularly important role for financial institutions such as
banks, who issue equity infrequently but have continuous access to debt capital. In such a …

We argue that when managers have private information about the productivity of assets
under their control and receive private benefits, substantial bonuses are required to induce …

Previous research on capital investment has identified a tendency in multibusiness firms
toward cross‐subsidization from well‐performing to poorly performing divisions, a …

This paper investigates the effect of internal information asymmetry (IIA) within conglomerate
firms on the quality of management forecasts and financial statements. We develop a novel …

We provide direct evidence on the impact of asymmetric information on both financing and
operating activities through a study of credit evaluations of microfinance institutions (MFIs) …

We analyze proprietary internal capital allocation data from a large retail banking group
consisting of member banks and a headquarters organization. We find that capital …

We develop a theory of firm scope and structure in which merging two firms allows the
integrated firm's top management to allocate resources that are costly to trade. However …

This paper develops a dynamic contracting (multitasking) model of a levered firm. In
particular, the manager selects long-term and short-term efforts, and shareholders choose …