This paper explores the relationship between corporate governance and asymmetric information. We find that proxies for governance mechanisms that encourage the monitoring of managers and rewards managers for moderating shirking and perquisite consumption are inversely related to proxies for...

This paper studies leverage dynamics when managers cannot commit to future financing and default policies ex-ante. Managers derive private benefits of control but debt constrains their flexibility, and thus, they build up less excessive leverage and may even actively reduce debt over time....

This paper provides empirical evidence of a clientele effect between institutional holdings and debt maturity structure. Using a new measure of debt maturity that captures the refinancing and underinvestment risks associated with the timing of cash flows, I find that institutional equity holders...

Do pre-offer target stock price runups increase bidder takeover costs? We present model-based tests of this issue assuming runups are caused by signals that inform investors about potential takeover synergies. Rational deal anticipation implies a relation between target runups and markups (offer...

This paper examines how executive compensation influences the market value of the firm's assets. After controlling for endogeneity, we find that boards have set the incentive to incur risk (vega) to maximize shareholder value, but that incentives to increase returns (delta) do not maximize...

The primary objective of this study is to construct a valid and reliable instrument to quantitatively measure the quality of internal audit function via level of conformance by internal auditors towards the International Professional Practice Framework (IPPF). Two separate pilot tests were...

For the past 30 years, the conventional wisdom has been that executive compensation packages should include very large proportions of incentive pay. This incentive pay orthodoxy has become so firmly entrenched that the current debates about executive compensation simply take it as a given. We...

The conventional wisdom in corporate law posits that private ordering has an important virtue: it allows firms to efficiently tailor governance terms to their particular needs. This virtue is routinely advanced to justify the largely “enabling” structure of U.S. corporate law, and to oppose...

Corporate governance systems exist to discourage self-interested behavior. One question that is often overlooked is how extensive these systems should be. A look at corporate governance today suggests that self-interest is high because companies are compelled - by regulators and the market - to...