This study analyzes the impact of corporate governance structures at the initial public offering (IPO) date. We test hypotheses that firms with more shareholder-oriented governance structures receive higher valuations at the IPO stage and have better long-term performance. Our sample is a set of...

I analyze the economic consequences of Material-Adverse-Change clauses (MACs) in merger agreements. MACs, used in more than 90% of acquisitions in my sample, show a high level of customization through the Material-Adverse-Event (MAE) exclusions, which limit the acquirers abandonment option...

Given the fact that related party transaction (RPT) exists, the present study aims to enquire whether and how different types of governance structure will affect the impact of RPT upon corporate performance. We find that, companies with unitary leadership and companies with over 40% divergence...

This study analyzes the impact of corporate governance structures at the initial public offering date. We test hypotheses that firms with more shareholder-oriented governance structures receive higher valuations at the IPO stage, attract more institutional ownership, and have better long-term...

I study how strategic alliances and their impact on future competitive incentives can motivate interfirm equity sales. In the model, an alliance between an entrepreneurial firm and an established firm improves efficiency for both. However, the requisite knowledge transfer heightens the...

Equity ties between businesses change the division of the firms' joint profits, thereby affecting incentives for relation-specific investments and other strategic actions. Depending on which side owns the equity and how readily the equity can be resold, we find that the changed incentives can...

Go-shop provisions have changed the way in which private equity firms execute public-company buyouts. While there has been considerable practitioner commentary on go-shops in the three years since they first appeared, this paper presents the first systematic empirical evidence on this new...

This paper documents the restructuring of 92 Japanese corporations that experienced a substantial decline in operating performance during 1986 to 1990. We find that these Japanese firms implement a number of downsizing measures such as asset sales, plant closures, and employee layoffs. Firms...

Equity participations affect the hold-up problem in two ways. On the one hand, they allow to reduce the externality that is created ex-post by hold-up. On the other hand, they change the bargaining positions by partially internalizing the threat of walking away from the bargaining. It turns out...

Venture Capitalists hold extensive control rights over entrepreneurial companies, including the right to fire the entrepreneurs with little severance. I examine why, and under what circumstances, entrepreneurs would voluntarily choose to relinquish control. I show that control may be necessary...