We find that the strength of countries' legal institutions can explain the ability of private firms to identify and terminate poorly performing managers. This finding is consistent with our hypothesis that governance problems in private firms are ameliorated by strong institutions that reduce...

Better legal protection of investors in a country is a central theme of international corporate governance research. However, investor protections can be derived not only from legal rights provided by countries' laws but also from rights attached to individual securities at the issuer's...

This article studies the ability of security-level contracts to substitute for poor country-level investor protections. Using a cross-country sample of restrictive covenants, we find that bond contacts are more likely to include covenants when creditor protection laws are weak. Further, the use...

This paper studies the ability of security-level contracts to substitute for poor country-level investor protections. Using a cross-country sample of restrictive covenants, we find that bond contacts are more likely to include covenants when creditor protection laws are weak. Further, the use of...