This paper considers an economy in which a not-for-profit government seeks to minimize the cost to taxpayers of maintaining a constitutionally mandated free trading market economy while letting firms maximize market values. By free trading, I mean that the government does not (a) force merger...

This paper provides a comprehensive analysis of a new and increasingly important phenomenon: the simultaneous holding of both equity and debt claims of the same company by noncommercial-banking institutions ("dual holders"). The presence of dual holders offers a unique opportunity to assess the...

The corporate governance literature has shown that self-interested controlling owners tend to divert corporate resources for private benefits at the expense of other shareholders. Such behavior leads the controlling owners to prefer long maturity debt to short maturity debt, to avoid frequent...

The financial crisis that began in the United States in 2007 and spread into a deep worldwide recession focused attention on agency costs in leveraged firms. Particular attention was given to the incentives of shareholders in such firms to overinvest (known as the "risk-shifting" problem) or...

A dual-class ownership structure, accompanied by disproportional control rights, is traditionally considered to be an inferior form of governance. We examine how the capital structure choices made by dual-class firms (i.e., by their controlling shareholders or insiders), as well as the...

Assuming an alternative corporate governance paradigm that puts employees in the firm's governance structures, as well as understanding their objective functions, we investigate capital structure decisions in an employee-governed firm. Examining corporate capital structure decisions in 12...

The study seeks to examine how the severity of corruption in a country influences corporate governance and financing decisions of firms. We analyse 15-years (1996-2010) data pertaining to 556 non-financial firms drawn from 10 African countries using models that link firm financing, ownership...