Purpose The ineffectiveness of external governance mechanisms (laws and regulations) designed to curb insider trading in Malaysia leads this study to focus on the role of internal governance of firms in helping to reduce insider trading incidences. The purpose of this paper is to investigate the...

Purpose – The purpose of this paper is to test for the existence of residual moral hazard in the three largest US reinsurance markets over the period 1995‐2000 and examine the effectiveness of retention limit, experience rating and long‐term contracting relationship in controlling for...

Purpose – Inspired by the recent opening up of the Chinese banking market and by the ensuing location strategies adopted by foreign banks, the purpose of this paper is to develop an empirical analysis on location strategies. The paper enriches the existing literature by including many...

Using highly detailed data on the loan portfolios of large U.S. banks, we document that these banks "specialize" by concentrating their lending disproportionately into one industry. This specialization improves a bank's industry-specific knowledge and allows it to offer generous loan terms to...

We document a new set of facts regarding the impact of referrals on labor market outcomes. Our results highlight the importance of distinguishing between different types of referrals-those from family and friends and those from business contacts-and different occupations. Then we develop an...

We provide elementary insights into the effectiveness of certification to increase market transparency. In a market with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device. This difference alone implies that seller-certification...

Interactions between players with private information and opposed interests are often prone to bad advice and inefficient outcomes, e.g. markets for financial or health care services. In a deception game we investigate experimentally which factors could improve advice quality. Besides advisor...

An advisor is supposed to recommend a financial product in the best interest of her client. However, the best product for the client may not always be the product yielding the highest commission to the advisor. Do advisors nevertheless provide truthful advice? If not, will a voluntary or...

The market for retail financial products (e.g. investment funds or insurance) is marred by information asymmetries. Clients are not well informed about the quality of these products. They have to rely on the recommendations of advisors. Incentives of advisors and clients may not be aligned, when...