Publications

2021
Working Paper

The Green Bonding Hypothesis: How Do Green Bonds Enhance the Credibility of Environmental Commitments?

By: Shirley Lu

This paper proposes and provides evidence on a green bonding hypothesis, where green bonds act as a commitment device that subjects firms to institutions holding them accountable to their environmental promises. I find that green-bond issuers face higher climate change... View Details

Keywords: Bonding Hypothesis; Sustainable Finance; Climate Change; Corporate Social Responsibility and Impact; Environmental Sustainability; Bonds; Corporate Accountability

SSRN

December 2012
Background Note

Municipal Bond Structuring

A note on municipal bond structuring. View Details

Keywords: Local Government; Political Process; Debt Management; Financial Planning; Financial Management; Bonds; Urban Development; Local Range; Government Administration

February 2005
Article

Can Foreign Firms Bond Themselves Effectively by Renting U.S. Securities Laws?

By: Jordan I. Siegel

The study tests the functional convergence hypothesis, which states that foreign firms can leapfrog their countries' weak legal institutions by listing equities in New York and agreeing to follow U.S. securities law. Evidence shows that the SEC and minority... View Details

Keywords: Corporate Governance; Cross-listing; Reputation; Bonding; Business Ventures; Laws and Statutes; Financial Instruments; United States; Mexico

May 2010
Article

Price Pressure in the Government Bond Market

By: Robin Greenwood and Dimitri Vayanos

Research Summary

What Makes the Bonding Stick? A Natural Experiment Involving the U.S. Supreme Court and Cross-Listed Firms

On March 29, 2010, the U.S. Supreme Court signaled its intention to geographically limit the reach of the U.S.securities antifraud regime and thus differentially exclude U.S.-listed foreign firms from the ambit of formal U.S.antifraud enforcement. We exploit this... View Details

Keywords: Cross-listing; Corporate Governance; Civil Liability; Bonding

2014
Article

Bond Supply and Excess Bond Returns

By: Robin Greenwood and Dimitri Vayanos

We examine empirically how the maturity structure of government debt affects bond yields and excess returns. Our analysis is based on a theoretical model of preferred habitat in which clienteles with strong preferences for specific maturities trade with arbitrageurs.... View Details

Keywords: Bonds; Investment Return

2020
Working Paper

Internal Models, Make Believe Prices, and Bond Market Cornering

By: Ishita Sen and Varun Sharma

Exploiting position-level heterogeneity in regulatory incentives to misreport and novel data on regulators, we document that U.S. life insurers inflate the values of corporate bonds using internal models. We estimate an additional $9-$18 billion decline in regulatory... View Details

Keywords: Life Insurers; Capital Regulation; Internal Models; Corporate Bonds; Regulatory Supervision; Concentrated Ownership; Bonds; Capital; Governing Rules, Regulations, and Reforms; Insurance; Investment Portfolio

SSRN

September 2016
Article

Disproportional Control Rights and the Bonding Role of Debt

By: Aiyesha Dey, Valeri Nikolaev and Xue Wang

We examine the governance role of debt in the context of U.S.-based dual class ownership structures. We hypothesize that the use of debt alleviates the conflict between shareholder classes by balancing the power of controlling insiders. We document that dual class... View Details

Keywords: Dual Class; Private Debt; Debt Covenants; Bonding Mechanisms; Ownership Type; Capital Structure; Borrowing and Debt

July 2003 (Revised January 2004)
Case

Swedish Lottery Bonds

Profiling nonsystematic risk for a bond investor, the case describes lottery bond issues by the Swedish National Debt Office (SNDO). Swedish lottery bonds are a specific type of financial fixed income instrument for Swedish retail investors. The distinctive feature of... View Details

Keywords: Bonds; Business and Government Relations; Public Administration Industry; Retail Industry; Sweden

27 May 2011
Working Paper Summaries

An Empirical Decomposition of Risk and Liquidity in Nominal and Inflation-Indexed Government Bonds

Keywords: by Carolin E. Pflueger & Luis M. Viceira

05 Jul 2006
Working Paper Summaries

Reinventing Savings Bonds

Keywords: by Peter Tufano & Daniel Schneider; Financial Services

August 2004 (Revised September 2004)
Background Note

Note on Bond Valuation and Returns

All securities can be evaluated based on certain common characteristics: value, rate of return, risk, maturity, and so forth. This case examines how bonds are valued and how their rates of return are computed. It begins with basic definitions and features of... View Details

Keywords: Bonds; Valuation; Investment Return

05 Jul 2006
Research & Ideas

Reinventing the Dowdy Savings Bond

allowing bonds to be rolled over into private sector retirement accounts; and generally making it easier to purchase bonds by expanding distribution to outlets such as the post office and Wal-Mart. "The... View Details

Keywords: by Julia Hanna; Banking; Financial Services

Research Summary

What Makes the Bonding Stick? A Natural Experiment Testing the Legal Bonding Hypothesis

On March 29, 2010, the U.S. Supreme Court signaled its intention to geographically limit the reach of the U.S. securities antifraud regime and thus differentially exclude U.S.-listed foreign firms from the ambit of formal U.S. antifraud enforcement. We use this legal... View Details

Keywords: Securities Litigation; Corporate Governance

November 2014 (Revised May 2017)
Teaching Note

Fresno's Social Impact Bond for Asthma

By: John A. Quelch

The case desccribes a social impact bond (SIB) to fund home-based remediation programs designed to reduce asthma attacks among Fresno residents (especially children) and thereby save on health care costs (ambulance callouts, emergency room visits etc.). The case... View Details

Keywords: Programs; Social Issues; Investment Return; Health Care and Treatment; Health Industry; California

Government bonds comove more strongly with bond-like stocks: stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor distressed. Variables derived from the yield curve that are already known to predict returns on... View Details

June 2012
Article

Comovement and Predictability Relationships Between Bonds and the Cross-Section of Stocks

By: Malcolm Baker and Jeffrey Wurgler

Government bonds comove more strongly with bond-like stocks: stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor distressed. Variables derived from the yield curve that are already known to predict returns on... View Details

Keywords: Relationships; Bonds; Stocks; Investment Return; Cash Flow; Quality; Risk and Uncertainty; Forecasting and Prediction; Profit