This paper investigates under what circumstances boards of directors fire CEOs and whether this action leads to better firm performance. We use unique and detailed data, covering 473 companies in the transition region, on boards’ actions, expectations and beliefs about CEO ability. We find...

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed ‘hard’ information about the...

We study how well-incentivized boards monitor CEOs and whether such monitoring improves performance. Using unique, detailed data on boards' information sets and decisions for a large sample of private-equity-backed firms, we find that gathering information helps boards learn about CEO ability....

Unlike previous empirical work concerning investment behavior and the determinants of liquidity constraints, we use a switching regression framework when sample separation is unknown and endogenous and firms are assumed to operate either in the financially constrained or in the financially...

In this paper we investigate to what extent firm investment in transition countries is sensitive to internal finance. We use accounts data of over 4000 companies in four countries at different stages of transition. We find that firms in Bulgaria and Romania are less sensitive to internal...

Networks of informal relationships between businesses appear to dominate economic activity in several emerging economies. These networks usually involve exchange of favors which make doing business easier for those within the network. Recent empirical studies in the organizational behavior...

Strategic restructuring of firms through investment is key to a transition from plan to market. Using data on industrial firms in the Czech Republic during 1992-98, we find that (a) foreign owned companies invest the most and cooperatives the least, (b) private firms do not invest more than...

Contrary to predominant Western predictions, the 'invisible hand' of the market has not as yet been able to perform its miracle in the Russian economy. It is the central thesis of this paper that one of the main reasons for this failure is the stubborn obstruction of transition be the 'invisible...

We analyze optimal schemes for privatization of state enterprises when foreign investors are potential buyers. The highest bidders may not be the best large shareholders for the state enterprise since their bid may only reflect their high private benefit of control. The government finds itself...

We study how well-incentivized boards monitor CEOs and whether such monitoring improves performance. Using unique, detailed data on boards' information sets and decisions for a large sample of private-equitybacked firms, we find that gathering information helps boards learn about CEO ability....