We examine the characteristics of firms that adopt stock-option plans for outside directors using a sample of 2,088 firm-year observations of Fortune 1000 firms from 1997-1999. Using fixed-effects models that account for self-selectivity bias, we find that firms with outside director option...

We study a sample of diversified firms that alter their organizational structure by divesting a business segment. These firms experience a reduction in the diversification discount after the divestiture. We show that the efficiency of segment investment increases substantially following the...

We investigate the role of outside directors in the corporate-control process by exploiting variation in ownership structure within the insurance industry. In mutuals, ownership rights are not transferable. This inalienability restricts the effectiveness of control mechanisms like external...

We study a sample of diversified firms that alter their organizational structure by divesting a business segment. These firms experience a reduction in the diversification discount after the divestiture. We show that the efficiency of segment investment increases substantially following the...