We investigate empirically the determinants of the quality of governments in a large cross-section of countries. We assess government performance using measures of government intervention, public sector efficiency, public good provision, and political freedom. We find that countries that are...

This paper examines legal rules covering protection of corporate shareholders and creditors, the origin of these rules, and the quality of their enforcement in 49 countries. The results show that common law countries generally have the best, and French civil law countries the worst, legal...

This paper addresses the question of why firms pay dividends, the so-called "dividend puzzle", from the agency perspective. We outline two agency models of dividends. On what we call "the outcome" model, dividends are the result of effective pressure by minority shareholders to force corporate...

Entrepreneurs who start new firms may choose not-for-profit status as a means of commiting to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entreperneur. We derive conditions under which completely...

Recent research has documented large differences between countries in ownership concentration in publicly traded firms, in the breadth and depth of capital markets, in dividend policies, and in the access of firms to external finance. We suggest that there is a common element to the explanations...

Tunnelling is defined as the transfer of assets and profits out of firms for the benefit of their controlling shareholders. We describe the various forms that tunnelling can take, and examine under what circumstances it is legal. We discuss two important legal principles--the duty of care and...