We examine the within-firm resource allocation and restructuring outcomes at firms violating debt covenants. Using establishment-level data from the U.S. Census Bureau, we find that covenant violations are followed by reductions in employment, investment, and more frequent establishment closures...

We interview 20 executives in the UK who have been members of both PE and PLC boards of relatively large companies. The main difference we find in PE and PLC board modus operandi is in the single-minded value creation focus of PE boards versus governance compliance and risk management focus of...

We investigate the investment-cash flow sensitivity of a large sample of the UK listed firms and confirm that investment is strongly cash flow-sensitive. Is this suboptimal investment policy the result of agency problems when managers with high discretion overinvest, or of asymmetric information...

In family firms, the succession of controlling equity stake to next generation is an issue of paramount importance. This, however, can be a major challenge in the presence of heavy inheritance or gift tax burden (high tax rate and absence of tax-saving vehicles, such as trusts or foundations)...

In Italy, as in many other European countries, listed firms have gone dark through controlling shareholder-initiated tender offers. We find that the presence of institutional investors, especially when foreign, helps minority shareholders receive a higher takeover premium and reduces the...

This paper studies the two potentially contrasting effects on IPO pricing and post-IPO operating performance of family ties as well as social ties the top management has with board members. While family ties may solve manager-owner conflicts of interests, they may also give rise to...

We argue that a fundamental reason for the short term perspective of corporate executives is the short-term orientation of shareholders and financial markets that drive the performance benchmarks of CEOs. In our view, long-term committed shareholders can provide substantial benefits to the...

The bulk of corporate governance theory examines the agency problems that arise from two extreme ownership structures: 100 percent small shareholders or one large, controlling owner combined with small shareholders. In this paper, we question the empirical validity of this dichotomy. In fact,...

Over the last few years, national and international regulators have taken conscious steps to make capital markets - especially those based in Europe - more shareholder-oriented. On one side, these are welcome initiatives as the recent spectacular corporate failures and anecdotal evidence suggest...

As domestic sources of outside finance are limited in many countries around the world, it is important to understand factors that influence whether foreign investors provide capital to a country's firms. We study 4,409 firms from 29 countries to assess whether and why concerns about corporate...