Handbook of Corporate Finance Empirical Corporate Finance Volume 1

xxii Contents of Volume 1

Chapter 4
Behavioral Corporate Finance
MALCOLM BAKER, RICHARD S. RUBACK and JEFFREY WURGLER 145
Abstract 146
Keywords 146

1. Introduction 147


2. The irrational investors approach 148
   2.1. Theoretical framework 149
   2.2. Empirical challenges 153
   2.3. Investment policy 155
   2.4. Financial policy 158
   2.5. Other corporate decisions 164


3. The irrational managers approach 168
   3.1. Theoretical framework 169
   3.2. Empirical challenges 171
   3.3. Investment policy 172
   3.4. Financial policy 174
   3.5. Other behavioral patterns 175


4. Conclusion 177
   References 178

PART 2: BANKING, PUBLIC OFFERINGS, AND PRIVATE SOURCES OF
CAPITAL

Chapter 5
Banks in Capital Markets
STEVEN DRUCKER and MANJU PURI 189
Abstract 190
Keywords 190

1. Introduction 191


2. Commercial banks as underwriters: Theoretical literature 192


3. Empirical evidence on conflicts of interest 195
   3.1. Before the 1933 Glass–Steagall Act 196
   3.2. The late 1980s and beyond 200
   3.3. Mitigating conflicts of interest: Organizational structure and syndicates 203
   3.4. Conflicts of interest from equity holdings: Evidence from venture capital 205


4. Empirical evidence on competition between commercial and investment banks 207
   4.1. Underwriting fees 207
   4.2. Underwriter selection 209
   4.3. Can investment banks survive? 210


5. International evidence 211
   5.1. Japan 212
   5.2. Canada 213