The present paper proposes to employ a major shift in the legal and institutional environment to identify contractual incentives from the correlation of executive pay and firm performance. We use the reform of the German stock companies act in 1884 as such a major shift and estimate the...

(forthcoming Journal of Political Economy). Part ownership of a takeover target can help a bidder win a takeover auction, often at a low price. A bidder with a "toehold" bids aggressively in a standard ascending auction because its offers are both bids for the remaining shares and asks for its...

Part ownership of a takeover target can help a bidder win a takeover auction, often at a low price. A bidder with a ``toehold'' bids aggressively in a standard ascending auction because its offers are both bids for the remaining shares and asks for its own holdings. While the direct effect of a...

An important literature has pointed out the coordination problems faced by the agents, in particular the financial one when they have to manage risk and their portfolio. If we follow Kaldor and its definition of speculation, then we could point out that in this case agents are short term...

A Central Counterparty (CCP) is an entity that interposes itself between transacting counterparties – a seller vis-à-vis the original buyer and a buyer vis-àvis the original seller – to quarantee execution of the transaction. Thus, the original transacting parties substitute their...

This study investigates the firm financing patterns in India and the role of corporate governance mechanisms. We use firm-level time series data of nearly 2000 listed companies from 1994 through 2000, to analyze the firm’s corporate financing behavior in connection with its corporate...

The need to develop securities market has, following the recent international financial crises, increasingly attracted the attention of national and international policy makers. Never before have developed and developing countries shared such a strong interest in ensuring the stable growth of...

We develop the Probability Scaling Method, which rescales short-window announcement period returns; and the Intervention Method, which uses returns associated with intervening events, to estimate value improvements from tender offers. These methods address biases in conventional techniques,...

An economy in which deposit-taking banks of a Diamond/Dybvig style and an asset market coexist is modelled. Firstly, within this framework we characterize distinct financial systems depending on the fraction of households with direct investment opportunities that are less efficient than those...

This paper studies how the trade size and the historical sequence of trades affect bid-ask spreads, investors’ trading strategies, and the market maker’s learning process in a multi-period economy. First, we show that there is a nonzero cut-off size below which informed traders never buy or...