Abigail S. Hornstein

Wesleyan University · Department of Economics

Research Summary Corporate philanthropy has long been recognized as an important part of multinational strategy, yet we know relatively little how charitable giving is allocated across countries. Using a sample of 208 U.S.‐based corporate foundations from 1993 to 2008, we find that the foundations give more in countries with opaque institutional en...

We examine whether companies from certain countries are more likely to fulfil investment pledges. Using data on contracted and utilized FDI in China, we find that firms fulfil an average of 59% of their pledges within two years. The propensity to fulfil pledges is lower for firms from countries with greater uncertainty avoidance, power distance, an...

We examine the determinants of managerial investments in mutual funds and the subsequent impacts of these investments on fund performance. By using panel data we show that investment levels fluctuate within funds over time, contrary to the common assumption that cross-sectional data are representative. Managerial investments reflect personal portfo...

Mergers and acquisitions (M&As) could lead to a firm diversifying into new industries, and the impact of this may be related to the firm's prior diversification. Using a panel of 1030 M&A transactions from 2000 to 2010, we find that previously diversified firms are more likely to pursue industrially diversifying M&As. Both previous and contemporary...

This paper exploits the substantial variation in market institutions across provinces in China to examine the impact of institutional quality on foreign listing. Firms that list on the U.S. and U.K. exchanges are more likely to come from better regulated provinces and tend to be at the top of a corporate pyramid. However, though the impact on firm...

When a firm has minimal agency and informational asymmetry problems it should make efficient capital budgeting decisions. Many firms over-invest prior to CEO turnover, halt investments in the period surrounding the turnover, and then greatly increase their level of expenditures. Empirical analysis of the cross-sectional and inter-temporal variation...

Two-step estimation with large panel data sets generally involves estimating vectors of individual-specific coefficients in a first-stage. In a second-stage estimation a vector of estimated coefficients is used as the dependent variable. Potential problems of heteroskedasticity in the second stage may be mitigated by weighting all independent obser...

The SEC has required mutual fund portfolio managers to disclose annually their level of investments in self-managed funds since 2005. When the SEC proposed this disclosure requirement, some fund managers argued that information on levels of managerial investment would be a noisy, non-informative signal that investors might have difficulty understan...

Firms must overcome agency and information asymmetry problems to make efficient corporate capital budgeting decisions; this is particularly true for firms with multiple units dispersed across geographic locations. Internal communication and coordination may therefore be crucial in reducing information asymmetry and achieving efficient resource allo...

A large literature has examined the antecedents and consequences of charitable giving by corporations, but the results have been mostly inconclusive. One reason for the mixed empirical findings is that, when measured at the firm level, both the factors associated with charitable giving and the actual level of giving can be driven by the same set of...

Chinese firms are increasingly choosing to have only one listing on a foreign stock exchange. This paper examines three hypotheses for why these firms list on particular foreign stock exchanges. First, Chinese firms are often parts of corporate pyramids, and that may enable firms to engage in tunneling. As some Chinese pyramids contain multiple fir...

Firms must overcome agency and information asymmetry problems to make efficient corporate capital budgeting decisions; this is particularly true for firms with multiple units dispersed across geographic locations. Internal communication and coordination may therefore be crucial in reducing information asymmetry and achieving efficient resource allo...

There are major differences between ex ante corporate investment plans and ex post investments. The case of China is useful for understanding this problem because there is substantial time series and cross sectional variation in the ratio of utilized to contracted FDI (UC ratio), which is less than one in most province-year observations. Provinces...

With U.S. multinational enterprises playing increasingly important roles in the global economy, it is important to understand the efficiency of their capital budgeting decisions. We examine an unbalanced panel of 332 U.S. firms from 1992-2000. Using the deviation of a firm's estimated marginal Tobin's q from a benchmark as an indicator of effective...

Hornstein thanks the Mellon Foundation for financial support. We thank J.J. Feigenbaum for excellent research assistance. All errors remain our own.

Many Chinese firms now only list shares abroad. These firms may present greater informational asymmetries to investors as they often belong to corporate pyramids or are under state control. There is also substantial variation in the regulatory institutions of the headquarters' locations, and this can affect the quality of corporate disclosures. Fir...