Theory

Taming or Protecting the Modern Corporation? Shareholder-Stakeholder Debatesin a Comparative Light

The Informativeness Principle Without the First-Order Approach

Holmström (1979) provides a condition for a signal to have positive value assuming the validity of the first-order approach. This paper extends...

Why do foreign firms leave U.S. equity markets?

How Should Performance Signals Affect Contracts?

The informativeness principle demonstrates that a contract should depend on informative signals. This paper studies how it should do so. Signals that...

A Theory of Optimal Expropriation, Mergers and Industry Competition

We model a competitive industry where managers choose quantities and costs to maximize a combination of firm profits and benefits from expropriation....

A Theory of Financial Media

We present a model of media coverage of corporate announcements. Firms strategically use the media to communicate corporate announcements to a group of...

A Theory of Income Smoothing When Insiders Know More Than Outsiders

We develop a theory of income and payout smoothing by firms when insiders know more about income than outside shareholders, but property rights ensure...

The Maximands of Corporate Governance: A Theory of Values and Cognitive Style

Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence

This paper presents an industry equilibrium model where firms have a choice to engage in corporate social responsibility (CSR) activities. We model CSR...

Contracting With Synergies

This paper studies multi-agent optimal contracting with cost synergies. We model synergies as the extent to which effort by one agent reduces his...