This research explores whether management by family members creates or destroys firm value. We estimate the impact of family pervasiveness in top management (family members as executive officers or board members) on firm value as measured by Tobin's Q. Results indicate that family members acting...

Stock option contracts provide managers with dual incentives, motivating both effort and fraud. We show that although there exists an infinity of stock option contracts that induce a given level of effort, no contract behaviorally dominates another in the sense that it induces relatively greater...

We analyze the choice between a one-tier and a two-tier board structure in a firm with a large shareholder sitting on the board. The board has two tasks: project selection and monitoring the ability of the manager. In a one-tier structure, the sole board performs all tasks. In a two-tier...

In a repeated interaction between a principal and two agents with inter-agents externalities and asymmetric information, we show that optimal decentralization within the organization is limited to the first period and across agents.

We investigate the reasons why universities use different combinations of fees and exams to guide admission decisions, focusing on the role of borrowing constraints on such decisions. On the one hand, we show that public universities choose exams and zero fees under borrowing constraints because...

We investigate the reasons why universities use different combinations of fees and exams to guide admission decisions, focusing on the role of borrowing constraints on such decisions. On the one hand, we show that public universities choose exams and zero fees under borrowing constraints because...

The standard Le Chatelier Principle states that the long-run demand for a good (in which by definition there are fewer restraints on the variables) is more elastic than short-run demand. The fundamental insight above goes well beyond demand theory, and proofs of this basic idea have been found...

We establish four necessary and sufficient conditions for the existence of the Averch-Johnson effect in a generalized version of their famous model of the rate-of-return regulated firm. The four necessary and sufficient conditions are then compared to the two stronger sufficient conditions for...

The aim of this work is to test the Gibrat's Law hypothesis for Brazilian firms. Gibrat''s Law establishes that firm growth is a random walk, it means that the probability of a given proportionale change in size during a specified period is the same for all firms in a given industry. This work...

This paper investigates the mechanism of the power shortage in China by estimating the capacity expansion and capacity utilisation behaviour of the power firms. The theoretical and empirical evidence is presented to show that the state planner deals with the ‘coal-electricity' conflict by...