Numerous gift exchange experiments have found a positive relationship between employers' wage offers and workers' effort levels. In (almost) all these experiments the employer both owns and controls the firm. Yet in reality many firms are characterized by the separation of ownership and control....

This paper argues that academics, politicians, and the media have six commonly held but misguided beliefs about corporate governance. While Armstrong, Guay, and Weber (2010) discuss some of these misconceptions, a wider recognition that these beliefs are actually “myths” is important. They...

The effects of corporate taxation on firm behavior have been extensively discussed in the neoclassical model of firm behavior which abstracts from agency problems. As emphasized by the corporate governance literature, corporate investment behavior is however crucially influenced by diverging...

Using an agency model of firm behavior, the paper analyzes whether the cost of investment should be tax exempt. The findings suggest that, when managers engage in wasteful capital expenditures, welfare may decline if the cost of investment is tax deductible, as commonly advocated. The extent to...

Japanese corporate governance reform is implemented by an introduction of corporate governance code and stewardship code, in which stewardship activities by institutional investors play an important role in terms of reduction of agency cost. In this report, stewardship activities are focused...

A principal-agent model is formulated to capture the efficiency of cooperatives with a member CEO and cooperatives with an employed outsider as CEO. Results of the model show that the incentive strength regarding the member CEO is stronger compared to that of the outside CEO in order to shift...

Existing research on CEO turnover focuses on CEO ability. This paper argues board ability is also important. Corporate boards will be reluctant to replace CEOs as this makes financing expensive by sending a negative signal about board ability. This differs from existing literature: entrenchment...

This chapter provides a critical review and survey of aspects of formal and informal contracting particularly relevant to the study of corporate governance. Two types of modeling, hidden-information agency and informal (relational) contracting that are perhaps under-utilized in governance...

Purpose – This paper develops a discussion for the shareholder influence on board of directors and CEO remuneration of public listed corporation.Design/methodology/approach – This study entails Australia, The United States of America and The United Kingdom.Findings – The findings show that...