How can China achieve phenomenal economic growth despite what is considered as "weak" institutions in market-based economies? Xu (2011) provides a framework to understand this puzzle. Specifically, he suggests that China’s institutional framework of Regionally Decentralized Authoritarian...

We examine a model that incorporates two hidden-actions of the manager: a productive effort and a manipulative effort. The manager is paid a bonus based on the accounting report that the manager can manipulate. A downward restatement of the accounting report triggers lawsuits. The manager is...

This paper examines how discriminatory input pricing by the upstream monopolist affects the R&D choices of downstream duopolists in the presence of R&D spillovers. We show that the monopoly supplier can benefit from a precommitment to uniform pricing because under uniform pricing the downstream...

How can China achieve phenomenal economic growth despite what is considered as "weak" institutions in market-based economies? Xu (2011) provides a framework to understand this puzzle. Specifically, he suggests that China's institutional framework of Regionally Decentralized Authoritarian regime...

We examine investment banks' strategic entry and market share gain in the new China H-share IPO (HIPO) market since 1993. Investment banks would have the incentive in initial years to obtain the HIPO business by low balling, i.e., providing high offer prices to the issuer, leading to a lower...

We introduce some new econometric tests and techniques for identifying and overcoming the problem of weak instruments in the context of joint provision of audit and non-audit fees. We use this context because identifying appropriate instruments is difficult due to the lack of theoretical...

The investor composition in the US stock market has been undergoing a dramatic shift towards greater institutional ownership. In this paper, we show that the increase in the stock ownership by institutions over time, especially those with focus on short-term performance, is positively related to...

Corporate sustainability can be broadly defined as the pursuit of a business growth strategy by allocating financial or in-kind resources of the corporation to a social or environmental initiative. Today, more than ever, corporate sustainability has risen to the status of strategic business...