Corporate scandals are reflected in excessive top management compensation and fraudulent accounts. These scandals cause an enormous amount of damage, not only to the companies affected, but also to the market economy as a whole. As a solution, conventional wisdom suggests more monitoring and...

We develop a theory of corporate liquidity demand, capturing the fact that a firm's borrowing capacity depends on news on future investment profitability. In our model, bad news on future investment profitability reduces a firm's borrowing capacity and therefore increases the need for internal...

The corporate governance structure of monasteries is analyzed to derive new insights into solving agency problems of modern corporations. In the long history of monasteries, some abbots and monks lined their own pockets and monasteries were undisciplined. Monasteries developed special systems to...

Stock option grants to top managers have largely contributed to the dramatic increase in US executive pay in recent years. In this paper it is argued that stock options, compared to other forms of compensation, have created strong incentives for managers to engage in lobbying activities for...

Die Benediktinerklöster weisen im Vergleich zu anderen Institutionen eine ungewöhnlich lange Lebensdauer auf. Unsere empirische Untersuchung aller je existierenden Benediktinerabteien in Bayern, Baden-Württemberg und der Deutschschweiz zeigt, dass ein durchschnittliches Kloster fast 500...

In view of recent corporate scandals, it is argued that corporate governance can learn from public governance. Institutions devised to control and discipline the behavior of executives in the political sphere can give new insights into how to improve the governance of firms. Proposals in four...

The credibility of standard instrumental variables assumptions is often under dispute. This paper imposes weak monotonicity in order to gain information on counterfactual outcomes, but avoids independence or exclusion restrictions. The outcome process is assumed to be sequentially ordered,...

This paper explores semi-monotonicity constraints in the distribution of potential outcomes, first, conditional on an instrument, and second, in terms of the response function. The imposed assumptions are strictly weaker than traditional instrumental variables assumptions and can be gainfully...