Two streams of agency theory research have focused on different aspects of the contracting relationship between shareholders and CEOs. The first stream of agency theory research examines the role of multiple performance measures in a CEOs compensation contract in maximizing firm value in a...

Prior studies fail to find that dedicated institutional investors (those characterized by long trading horizons and high ownership stakes in portfolio firms) trade in anticipation of future performance. In this study, I find that dedicated institutions sell shares of bankrupt firms at least one...