How does insider ownership affect shareholder value? We answer this question by examining how the marginal valuation of new investment projects announced by Indian firms varies with the level of insider holding in the firm, and other firm and project characteristics. We find that among projects...

We examine earnings management practices of insider controlled firms across twenty-two countries to shed light on the link between consumption of private benefits and earnings management. Insider controlled firms are associated with more earnings management than non-insider controlled firms in...

We investigate the impact of direct participation of banks on the board of borrowing companies in India. On the one hand, bank's proximity to decision-makers in the firm could mitigate the problem of expropriation by corporate insiders typical in emerging markets, thereby enhancing firm value....

Extensive discussions of the inefficiencies of "short-termism" in executive compensation notwithstanding, very little is known empirically about the extent of such short-termism. This paper develops a novel measure of executive pay duration that reflects the vesting periods of different pay...

While standard contract theory suggests that a CEO should be paid relative to a benchmark that removes the effects of sector performance, there is evidence that CEO pay is strongly and positively related to such sector performance. Many have coined this relationship as pay for luck. In this...

We analyze a publicly-traded firm's decision to stay public or go private, focusing on the stochastic nature of investor participation in the public market. The liquidity of public ownership is both a blessing and a curse: it facilitates trading and lowers the cost of capital, but it also...

Can institutional stock sales influence firm governance? Theory suggests that informed selling is likely to depress prices and disperse shareholding. Combined, both effects can influence firm governance by facilitating takeovers. I formalize this hypothesis and test its predictions using data on...

We analyze a publicly-traded firm's decision to stay public or go private, focusing on the stochastic nature of investor participation in the public market. The liquidity of public ownership is both a blessing and a curse: it facilitates trading and lowers the cost of capital, but it also...

We investigate the importance of reputation-based implicit contracts in firm financing in the context of Indian Business Groups. The group structure enables us to cleanly analyze the negative spillovers on other firms, triggered by a member firm defaulting on its debt obligations. We hypothesize...