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Faculty Profile : Thomas W. Bates

Thomas Bates
Associate professor Thomas Bates received his Ph.D. in Finance from the University of Pittsburgh in 2000.  He joined the University of Arizona in 2005, leaving the University of Delaware where he served as an assistant professor of Finance.  In 2008, Bates received tenure and appointment to associate professor and the McCoy-Rogers Fellow at the Eller College of Management.

Bates’ research interests include financial contracting in merger and acquisition bids, corporate governance choices and firm value, and the payout and liquidity decisions of corporations.  His research has been published in many of the leading scholarly journals in the field of finance and is frequently cited by scholars, practitioners, and general news outlets including the New York Times. 

In a paper now forthcoming in the Journal of Finance, Bates and his co-authors are the first to document a dramatic increase in the cash holdings of U.S. corporations over the last three decades.  This research shows that the increase in corporate liquidity is largely attributable to greater idiosyncratic risk, as well as an increasing reliance by U.S. firms on research and development and other intangible investments over time.

In another paper recently published in the Journal of Financial Economics, Bates examines the controversial role of staggered annual elections for boards of directors.  While conventional wisdom suggests that staggered elections can make contested takeover bids prohibitively costly for an acquirer, the results of this study indicate that this governance feature does not have an economically meaningful impact on the likelihood of a firm receiving a takeover bid. Given this and other evidence, the study concludes that staggered board elections do not insulate incumbent managers from an active market for corporate control, and in fact, can increase the expected value of takeover bids for target shareholders.

Bates currently teaches Valuation Modeling (FIN 513) and Corporate Finance Strategy (FIN532) to students in Eller’s Masters of Business Administration and Masters in Finance programs, as well as the core business finance module in the Eller Executive MBA program.

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