On April 21, 2004, the European Community enacted the XIII Company Law Directive on Takeovers, whose primary purpose is the promotion of more efficient capital structures in Europe. The provision of a Mandatory Bid Rule (MBR) is among the several measures devised by the Directive to achieve this...

In recent times, there has been an unprecedented shift in power from managers to shareholders, a shift that realizes the long-held theoretical aspiration of market control of the corporation. This Article subjects the market control paradigm to comprehensive economic examination and finds it...

Eighty-two percent of public firms have golden parachutes (or “chutes”) under which CEOs and senior officers may be paid tens of millions of dollars upon their employer's change in control. What justifies such extraordinary payouts?Much of the conventional analysis views chutes as excessive...

Efforts to control bank risk address the wrong problem in the wrong way. They presume that the financial crisis was caused by CEOs who failed to supervise risk-taking employees. The responses focus on executive pay, believing that executives will bring non-executives into line — using...

We empirically investigate the political determinants of liberalization and privatization policies in six network industries of 30 OECD countries. We unbundle liberalization and privatization reforms and study their simultaneous determination in a two-equation model. Our findings unveil that...

Under the current model of corporate fiduciary law, informational asymmetry between managers and creditors makes the debt contract inadequate to efficiently govern the debtor-creditor relationship. More specifically, as currently devised, the debt contract fails to prevent managerial...