governance and performance issignificantly different from zero. Our model provides a clean test of this hypothesis bycontrolling … reduced-form bivariate equation. We modelgovernance, performance and the constraints on the firm’s investment decisions as … latentvariables. Our estimate of the conditional correlation between our measures of governanceand performance is statistically …

work for. We reject, however, the efficient pay hypothesis as CEO pay and the demand for managers increases in Germany in … difficult times when the typical firm size shrinks. We find further that domestic and global competition for managers has … for performance and that the great recession of 2009 acted as a disciplining devise on CEO pay in Germany. …

findings suggest that, when managers engage in wasteful capital expenditures, welfare may decline if the cost of investment is …

model with strategic interaction between managers and outside shareholders, we hypothesize that, while an increase in the …

can limit the interference of the large shareholder and can restore manager’s incentive to exert effort to become informed …

. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their … poorly, (ii) the more costly monitoring is, the more sensitive is the manager’s compensation to firm performance, and (iii …)conditional on the firm’s performance, the manager’s compensation is lower when his portfolio is monitored, even if no hedging is …