Information-based theories of financial intermediation focus on delegated monitoring. However, there is little evidence on how markets discipline intermediaries who fail at this function. We exploit the direct link between corporate fraud and monitoring failure and examine how a venture capital...

What is the value of political capital for individuals? Towards the end of the Pinochet dictatorship in Chile, military and civilian collaborators entered the business elite, controlling the largest and most important firms in the country. Using a novel panel dataset of board members in these...

Credit unions compete directly with commercial banks in markets for consumer financial services yet receive an exemption from federal corporate income tax. Commercial banks claim that credit unions are no different than banks and that the credit union tax exemption represents an unfair...

Banks open more branches and make more lending near their Chief Executive Officers' (CEOs) childhood hometowns. The effects are stronger among information-ally opaque borrowers and among CEOs who spend more time in their childhood hometowns. Furthermore, loans originated near CEOs' hometowns...

We examine whether the relationship between managerial risk-taking incentives and bank risk is sensitive to the underlying macroeconomic conditions. We find that risk-taking incentives provided to bank executives are associated with higher bank riskiness during economic downturns. We attribute...

Purpose: The purpose of this paper is to examine the impact of corporate governance, with particular reference to the role of independent directors on boards and audit committees and media coverage on corporate transparency and disclosure. In addition, the paper also investigates the role of the...

The primary role of equity compensation is to provide incentives to an effort-averse agent. Here, we show that the chosen level of equity incentives, when publicly disclosed, will also convey information about future earnings, causing two-way linkages between incentive compensation and financial...

Extant research argues that borrowing from financial intermediaries subjects managers to external monitoring. However, given managers' flexibility in choosing the type of debt financing, why would managers submit themselves to external monitoring? Recent theory points to the role of managerial...

This paper examines the relationship between firm performance and the recommendations provided by proxy advisory firms in the United States, regarding shareholder votes in stock option exchange programs. Using a comprehensive sample of stock option exchanges announced between 2004 and 2009, we...