This paper studies the interactions between monitoring choices in different firms. Shareholders gather information about a common industry shock and subsequently intervene with management. An information externality arises because intervention transmits information about industry conditions to...

We propose that potential entrants learn about industry conditions from observing the investment behavior of established firms. Strong corporate governance at established firms facilitates learning spillovers. Empirically, we find that industries experience more entry if incumbent firms invest...

We present a model of succession in a firm owned and managed by its founder. The founder decides between hiring a professional manager or leaving management to his heir, as well as on how much, if any, of the shares to float on the stock exchange. We assume that a professional is a better...

In many organizations, decisions are taken by unanimity giving each member veto power. We analyze a model of an organization in which members with heterogenous productivity privately contribute to a common good. Under unanimity, the least efficient member imposes her preferred effort choice on...