What are the costs and benefits of mandatory dividend rules? On the one hand, they make it harder for controlling shareholders to divert corporate assets. On the other hand, they reduce the internal funds available for firms to invest, possibly leading to the loss of valuable projects. To assess...

Firms that maintain no formal record of actions and events would hardly be considered well managed. Yet, organizations that require the recording of actions and the filing of reports are often labelled quot;bureaucraticquot; and inefficient. This paper argues that the thin line between efficient...

In recent years, stock exchanges have engaged in strategic alliances and regulatory changes to attract firms and trading volume. To characterize the outcomes of such regulatory competition, legal scholars coined the phrases race to the top and race to the bottom. In a race to the top, the...

In the last two decades, the number of foreign firms cross listing their shares in the US has significantly increased. In response, some stock exchanges have offered the option of adhering to stricter exchange governance requirements. Can these rules enhance firm value in countries with weak...

This paper identifies a new corporate governance mechanism: sharing control. We show that bargaining problems among multiple controlling shareholders may prevent inefficient investment decisions that harm minority shareholders. The same bargaining problems may block efficient investment...

This paper explains why companies close to bankruptcy tend to lose their best workers and why the employees who remain lack proper motivation. This collapse of incentives within an organization arises because of a negative interaction between the system of incentives and the capital structure...

How do shareholders perceive managers who lever up under a takeover threat? Increasing leverage conveys good news if it reflects management's ability to enhance value. It conveys bad news, though, if inefficient managers are more pressured to lever up than the efficient ones. This paper...