This paper utilizes the Pragmatic Theory of the Firm to better understand the process that delivers economic progress reflected in rising living standards. Section One explains how firms build knowledge and create value. Section Two introduces the Knowledge Building Loop to clarify and delineate...

We survey the textual sentiment literature, comparing and contrasting the various information sources, content analysis methods, and empirical models that have been used to date. We summarize the important and influential findings about how textual sentiment impacts on individual, firm-level and...

This paper is a comment on Ronald Gilson and Alan Schwarz “Constraints on Private Benefits of Control: Ex Ante Control Mechanisms versus Ex Post Transaction Review”. Together with that paper it will appear in the Journal of Institutional and Theoretical Economics 169 (1) in 2013, in a...

Abstract: This paper is a comment on Ronald Gilson and Alan Schwarz “Constraints on Private Benefits of Control: Ex Ante Control Mechanisms versus Ex Post Transaction Review”. Together with that paper it will appear in the Journal of Institutional and Theoretical Economics 169 (1) in 2013,...

Problems resulting from the delegation of competencies from one actor to another are at the heart of any governance discussion. While the conventional agency view stronger emphasizes that such problems can be solved ex-post by monitoring and control strategies, the contract view proposes to...

We investigate whether the concentration of power in the hands of individuals characterized as business leaders influences the variability of corporate performance. We do so by proposing an original method to estimate the concentration of power that takes into account both the individual...

Government bailouts undermine the core principles of capitalism. They are also expensive, unjust, unpopular, and usually represent dramatic deviations from the rule of law. However, they are also, in some cases, necessary. The “problem of bailouts,” then, is that they are almost always...

Vital in preserving managerial accountability, the firmly established one share, one vote rule provides shareholders with limited rights to elect directors who appoint managers and to approve certain extraordinary transactions. Without the deterrents of risk of capital loss and fear of removal,...

This paper is a preliminary exploration of the politics of financial market development. Using panel data for 197 countries over 34 years, we test a range of variables and hypotheses regarding the politics of financial market development. We find only weak support for the legal origins...

At a time of such great turbulence, looking to the future directions of capital markets and their regulation in developed economies is a particularly risky business. We are in the midst of a great sea change.Nevertheless, there are several current, and readily observable, phenomena which are...