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Banks, like other debtholders, are most sensitive to negative changes in firm value.
We investigate changes in firm value, measured by Tobin's Q, for CSR firms surrounding the financial crisis, controlling for changes in firm value of matched non-CSR firms over the same period.
As long as firm performance isn't also driven by the local weather, but instead only by the weather's effect on how much CEOs golf, we can test whether excessive leisure consumption indeed leads to changes in firm performance.
The Federal Reserve and the Federal Deposit Insurance Corp. called the banks' resolution plans, or "living wills," "unrealistic or inadequately supported". They said the plans "fail to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for" an orderly resolution.
First, by using simple OLS models with firm fixed effects, we investigate the potential impact on the Phillips curve of changes in firm composition.
First, changes occurred not only in production technologies, but also in the way of organizing economic activity, including substantial changes in firm size and ownership structure.
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Changes in firm-level expectations are measured by specially designed survey questions.
The "reverse causation" may play a (economically very minor) role in explaining changes in firms' corporate governance in the 1990-2006 time period.
Such "creative" accounting explains why changes in, say, earnings per share explain very little of the changes in firms' price-earnings ratios, a traditional gauge of corporate value.Because they focus on cash flow, which is harder to manipulate, the new measures provide a more reliable picture of firms' performance.
Updating allocations, which involve periodically adjusting allocations over time to reflect changes in firms' operations, contrast with this.
Instead of focusing on a cross-sectional CSR effect on the level of firm value, we investigate the CSR effect on the change in firm value surrounding the financial crisis.
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