John J. McConnell’s research while affiliated with Indiana University – Purdue University Indianapolis and other places

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Publications (159)


Guilty by Political Association: The Impact of Political Scandals on Connected Firms
  • Article

November 2024

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1 Citation

The Journal of Law and Economics

April Knill

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Baixiao Liu

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John J. McConnell

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Figure 1. Differences in abandonment rates of value-reducing acquisition attempts between pilot and nonpilot firms during the pre-SHO, SHO and post-SHO Periods. This figure depicts the differences in abandonment rates between Regulation SHO pilot and nonpilot firms of value-
Descriptive statistics. This table presents descriptive statistics for value-reducing acquisition attempts by the Regulation SHO pilot and nonpilot firms obtained from the Thomson Financial SDC Mergers and Acquisitions database over the period of 1 January 2002 through 31 December 2010. Panels A and B show the means and medians for acquirers and transaction characteristics, respectively, both for the full sample and for subsamples of only pilot and only nonpilot acquirers. All variables are defined in Appendix A. Statistical tests for differences in means and medians for each characteristic for pilot and nonpilot acquirers are also presented. ***, **, and * indicate significance at 1%, 5%, and 10%, respectively.
Cont.
The Effect of Short-Sale Restrictions on Corporate Managers
  • Article
  • Full-text available

November 2023

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17 Reads

Journal of Risk and Financial Management

This paper studies the effect of short selling on corporate managers from 2002 through 2010. We examine how the exemption of short-sale uptick tests due to the Regulation SHO pilot program affects managers’ decisions to abandon value-reducing acquisition attempts. We find that when deciding whether to abandon value-reducing acquisition attempts during the program, managers of pilot firms, whose stocks are less subject to short-selling impediments, are more sensitive to stock price changes than managers of nonpilot firms. We find no difference in managers’ sensitivity prior to nor post SHO. These results indicate that, despite their dislike of short sellers, managers believe that the level of informativeness from capital markets is superior when short sellers are less impeded.

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Citations (73)


... Marginal value of cash holdings. We follow Halford et al. (2020) to examine the value relevance vis-à-vis the potential evidence for agency motives of cash holdings by single CEOs. 12 We argue that the stock market would value higher cash holdings by single CEOs less (more) higher cash holdings is driven by the agency (precautionary) motive. ...

Reference:

Is Marriage a Turning Point? Evidence from Cash Holdings Behaviour
Existing Methods Provide Unreliable Estimates of the Marginal Value of Cash
  • Citing Article
  • January 2024

Critical Finance Review

... Takeovers exist in numerous forms and contexts, whether as a means to reduce risk and uncertainty, as a way for executives to engage in empire building, or occurring within one country or across borders (Bris and Cabolis 2008;Liu and McConnell 2015;Nguyen and Phan 2017). These, generally, irreversible firm-altering strategic moves (Ebina et al. 2022) are fraught with challenge, particularly when a firm attempts to acquire in a different country, creating complexity (Sun et al. 2021;Yiu et al. 2023). ...

CEOs, Abandoned Acquisitions, and the Media
  • Citing Article
  • October 2015

Journal of Applied Corporate Finance

... The minimum board independence was 45.45%, with 91.67% being the maximum. A board with the majority of board members being independent has the capacity to create greater value for shareholders under certain circumstances as well as enhancing the company's reputation (Dahya et al. 2023). ...

Does board independence matter in companies with a controlling shareholder?
  • Citing Article
  • April 2023

Journal of Applied Corporate Finance

... We also examine the importance of holdout problems by examining the relation between reliance on loans held by CLOs and the likelihood of a prepackaged bankruptcy versus an out of court restructuring. A prepackaged bankruptcy or "prepack" is generally considered a tool for dealing with holdouts (McConnell and Servaes, 1991;Tashjian, Lease, and McConnell, 1996), because, unlike traditional Chapter 11, "prepacks" are typically not used to restructure operations, but rather they are used to put a prearranged plan into effect. Thus, if loans held by CLOs are more difficult to restructure due to more severe holdout problems, then we would expect the likelihood of a "prepack" versus an out of court restructuring to be higher when the firm relies heavily on loans held by CLOs. ...

The economics of prepackaged bankruptcy
  • Citing Article
  • April 2023

Journal of Applied Corporate Finance

... Second, this study extends the literature that connects media partisanship and financial decisions. Baloria and Heese (2018) and Knill et al (2021) examine the ways in which corporate managers' decisions are influenced by media partisanship. Our study examines a way in which investors' decisions can be influenced by media partisanship. ...

Media Partisanship and Fundamental Corporate Decisions
  • Citing Article
  • August 2021

Journal of Financial and Quantitative Analysis

... Studies by Blanes i Vidal, Draca, and Fons-Rosen (2012) and Bertrand, Bombardini and Trebbi (2014) also find evidence consistent with the quid pro quo hypothesis in the context of revolvingdoor lobbyists. A larger literature on corporate political connections documents systematic evidence consistent with the quid pro quo hypothesis both internationally as well as in the U.S. (see, e.g., Sapienza (2004), Khwaja and Mian (2005), Faccio, Masulis, and McConnell (2005), Bunkanwanicha and Wiwattanakantang (2009), and Goldman, Rocholl, and So (2013)). ...

Political Connections and Corporate Bailouts
  • Citing Article
  • January 2007

The Journal of Finance

... Family business studies have attracted the interest of many researchers [1][2][3][4] as family firms play a crucial role in promoting sustainable economic development, emerging innovation, and stable employment [5]. The sustainable development of family businesses is momentous not only for themselves but also for the advancement of the entire economy. ...

Does CEO Succession Planning (Disclosure) Create Shareholder Value?

Journal of Financial and Quantitative Analysis

... Recent work adds institutional reforms (La Porta, Lopez-de-Silanes, and Shleifer (2008)), financial liberalizations (Henry (2007)), and market expansions (Aw, Roberts, and Xu (2011)) to the roster of productivity-enhancing shocks. Work in growth theory (Aghion and Howitt (1992)) and finance (Fogel, Morck, and Yeung (2008), Faccio and McConnell (2020)) associates increased productivity with creative destruction (Schumpeter (1911)), wherein innovative firms partially or completely displace established firms. ...

Impediments to the Schumpeterian Process in the Replacement of Large Firms
  • Citing Article
  • January 2020

SSRN Electronic Journal