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The Common Law, parliamentary democracy, and academia all institutionalize dissent to check undue obedience to authority; and corporate governance reformers advocate the same in boardrooms. Many corporate governance disasters could often be averted if directors asked hard questions, demanded...
Persistent link: https://www.econbiz.de/10012468049
the announcement day return of bidding firms. The returns to bidding shareholders are lower when their firm diversifies …, when it buys a rapidly growing target , and when the performance of its managers has been poor before the acquisition …. These results are consistent with the proposition that managerial rather than shareholders' objectives drive bad …
Persistent link: https://www.econbiz.de/10012476048
responds more to increases in shareholders' return performance than to decreases. Further, this asymmetry is stronger when …
Persistent link: https://www.econbiz.de/10012456270
In this paper we examine the causal impact of competition on management quality. We analyze the hospital sector where … management quality - measured using a new survey tool - is strongly correlated with financial and clinical outcomes such as … a greater number of neighboring hospitals) is positively correlated with increased management quality, and this …
Persistent link: https://www.econbiz.de/10012462620
cash flow retention, more CEO accountability, and less earnings management. We posit that more powerful independent … errant top managers, or both …
Persistent link: https://www.econbiz.de/10012458854
Every firm in a developed economy relies on the mere existence of countless other firms to keep prices competitive up and down all supply chains. Without this network externality, no firm forms; and without many firms, no network forms; locking in a low-income trap. Business group governance...
Persistent link: https://www.econbiz.de/10012482288
Economics has firms maximizing value and people maximizing utility, but firms are run by people. Agency theory concerns the mitigation of this internal contradiction in capitalism. Firms need charters, regulations and laws to restrain those entrusted with their governance, just as economies need...
Persistent link: https://www.econbiz.de/10012462167
Different economies at different times use different institutional arrangements to constrain the people entrusted with allocating the economy's capital and other resources. Comparative financial histories show these corporate governance regimes to be largely stable through time, but capable of...
Persistent link: https://www.econbiz.de/10012463607
that assign officers and directors a duty to act for their business group, not their firm or its shareholders. Even where a … duty to individual firms' shareholders exists, business groups often have pyramidal structures of intercorporate … blockholdings that entrench controlling shareholders, usually wealthy families, who run their groups to maximize their utility. This …
Persistent link: https://www.econbiz.de/10012464733
Equity ownership gives labor both a fractional stake in the firm's residual cash flows and a voice in corporate governance. Relative to other firms, labor-controlled publicly-traded firms deviate more from value maximization, invest less in long-term assets, take fewer risks, grow more slowly,...
Persistent link: https://www.econbiz.de/10012467431