Limiting executive compensation through a salary cap has emerged as one of the latest global governance initiatives. We investigate the effectiveness of a form of an executive salary cap system and find that only firms with a high level of effective external monitors set their salary cap...

We find that the relative levels of the computationally costly q-estimator developed by Perfect and Wiles (1994) and the simple one of Chung and Pruitt (1994), when used as continuous variables, are affected by variations in several firm financial characteristics. In contrast, when the...

We find that the relative levels of computationally costly "q" estimators and simple "q" estimators, when used as continuous variables, are affected by variations in many firm financial characteristics. In contrast, when the estimators are used as dichotomous variables, they classify the vast...

We examine whether foreign investors impact corporate governance by analyzing the relation between foreign share ownership and pay-performance sensitivity. While the extant literature has examined the impact of foreign ownership, the evidence for emerging markets is limited. We test our...

Internal capital markets (ICMs) provide firms an alternative to costly external financing; however, they also provide an avenue to avoid the monitoring associated with issuing external capital. We argue that firms operating inefficient internal capital markets will avoid outside financing....