Essays in Financial Economics

Abstract

This dissertation is composed of four self-contained chapters studying how financial markets affect the governance of public companies. The first chapter shows how large shareholders can engage in governance when there is an informational spillover to credit markets. In the second chapter, we investigate the role of strategic communication for the efficient allocation of control rights via takeovers. In Chapters 3 and 4, we study how financial markets affect corporate decision-making by enabling investors to decouple their voting power from their economic exposure. Chapter 3 provides a classification of different decoupling techniques, whereas Chapter 4 develops a cost-benefit analysis of the most prominent decoupling technique called vote trading.