Corporate law and governance scholarship has traditionally focused on understanding the agency costs that result from unresolved conflicts of interest between shareholders and management. This agency problem becomes trivial when corporate ownership is concentrated, as is the case in many...

This paper explores an extensive novel panel-data set covering more than 4,000 listed firms in 16 European countries to study the effects of shareholder protection on ownership structure and firm performance. Recent research criticizes the existing law and finance literature using (i)...

We examine whether stricter non-compliance sanctions on corporate governance regulations influence the investment decisions of foreign portfolio investors in emerging markets. To answer this question we use a natural experiment provided by a corporate governance regulatory reform introduced in...

This paper analyzes why corporate governance matters for stock returns if the stock market prices the underlying managerial agency problem correctly. Our theory assumes that strict corporate governance prevents managers from diverting cash flows, but reduces incentives for managerial effort. In...