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managers and shareholders upon the control of internal funds, a simple model allows to analyse the link between profit …
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Morse, Nanda and Seru (2011) interpret the data to suggest that more powerful CEOs ex-post change their incentive contracts more. My paper points out a number of issues with their inference. First and most importantly, MNS do not control for the fact that not just the most powerful but almost...
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executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution …
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