The informational content of prices hypothesis in Modigliani and Miller (and Fisher before them) advocates that organizations’ market prices could somehow estimate their growth prospects and intangible assets. For this estimation, discounted cash flow models are frequently employed. However,...

Drawing on the literature on organizational psychology, this paper discusses the potential of studying corporate culture and organizational behaviour for financial supervision. First, we discuss how corporate culture is often linked to long-term firm performance. From that perspective, factoring...

In Japan, since 2013, Japanese corporate governance reform has been developed by Japanese Government initiatives. This paper provides a theoretical framework for understanding what Japanese corporate governance reform means for Japanese companies by an application of agency theory. Corporate...

The research question for this paper is to identify how some widely accepted governance practices are not necessarily consistent with the objectives of good governance. One reason is that there is little agreement as to what are the objectives of generic good governance, be it in the public,...

Exploiting China's anti-corruption campaign, we show that following a decrease in corruption, firm performance improves. Small and young firms benefit more. We identify the channels through which corruption hampers firm performance. Following the anti-corruption campaign, the allocation of...

The Australian financial system is exposed to the same toxic governance practices that caused the financial crisis in 2008. The US Government's 2011 commission of inquiry into the crisis concluded that a “key cause” was “dramatic failures of corporate governance and risk management”....

Nonviable 'zombie' firms have become a key concern in China. Using novel firm-level industrial survey data, this paper illustrates the central role of zombies and their strong linkages with state owned enterprises (SOEs) in contributing to debt vulnerabilities and low productivity. As a group,...

Drawing on the literature on organizational psychology, this paper discusses the potential of studying corporate culture and organizational behaviour for financial supervision. First, we discuss how corporate culture is often linked to long-term firm performance. From that perspective, factoring...

We document the prevalence of public companies with negative net earnings since the 1970s. The fraction of firms with negative net income has increased sharply from 18% in 1970 to 54% in 2019. Such an increase is mainly driven by the right shifts in the mean, i.e., the increasing popularity of...

We investigate how luck, namely, changes in a firm’s performance beyond the CEO’s control, affects strategic risk-taking. Fusing upper echelons theory with insights from psychology and behavioral strategy research, we hypothesize that there is a positive association between luck and...