We analyze the effects of changes in the purpose of large German corporations from stakeholder-oriented organizations to shareholder-oriented organizations during the decade of the 1990s. We document this transformation by first examining the annual reports of large firms at strategic points in...

We show that entrepreneurs may prefer to allow insider trading even when it is not socially optimal. We examine a model in which an insider/manager allocates resources on the basis of his private information and outside information conveyed through the secondary-market price of the firm's...

A critical question faced by any sovereign seeking to raise funds in the bond market is whether to issue the debt under foreign or local parameters. This choice determines other key characteristics of any bond issue such as which banks, lawyers, and investors will be involved. Most important...

Using the passage of the Sarbanes-Oxley Act and the associated change in listing standards as a natural experiment, we find that while board independence decreases the cost of debt when credit conditions are strong or leverage low, it increases the cost of debt when credit conditions are poor or...

A sovereign seeking to raise funds in the bond market may choose to issue the debt under either local or foreign parameters. This decision involves a tradeoff between the sovereign retaining discretion in managing the issue on the one hand and relinquishing control of the issue to third parties...

The claim that lawyers act as gatekeepers or certifiers in financial transactions is widely discussed in the legal literature. There has, however, been little empirical examination of the claim. We test the hypothesis that law firms have replaced investment banks as the gatekeepers of the market...

We examine the effects of inflation on the standard, Constant-Growth valuation model found throughout the finance literature. We find that the presence of inflation vitiates the generally accepted expression of this model for the value of a firm that either makes no new investments or invests...

Using a unique hand-collected dataset, we show that shareholder activism designed to open U.S. based closed-end funds has become more frequent since the SEC's reform of the proxy rules in 1992 (the 1992 Reform) that lifted restrictions on shareholder communication. We denote this activity...