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Our model of the initial public offering process links the three main empirical IPO ‘anomalies’ – underpricing, hot issue markets, and long-run underperformance – and traces them to a common source of inefficiency. We relate hot IPO markets (such as the 1999/2000 market for Internet...
Persistent link: https://www.econbiz.de/10005498165
should err in favour of the arrangement that is less favourable to managers. Such an approach, we show, would make it most …
Persistent link: https://www.econbiz.de/10005656367
instrument for addressing the agency problem between managers and shareholders but also as part of the agency problem itself … managers. As a result, managers wield substantial influence over their own pay arrangements, and they have an interest in … reducing the saliency of the amount of their pay and the extent to which that pay is de-coupled from managers’ performance. We …
Persistent link: https://www.econbiz.de/10005662270
constraints that act on these processes, leave managers with considerable power to shape their own pay arrangements. Examining the …
Persistent link: https://www.econbiz.de/10005114260
For a large number of companies from different countries, we analyze how company corporate governance practices and country regulatory regimes interact in terms of company valuation. We confirm that corporate governance plays a crucial role in efficient company monitoring and shareholder...
Persistent link: https://www.econbiz.de/10005504236
We argue in favour of the shareholder model of the firm for three main reasons, First, serving multiple stakeholders leads to ill-defined property rights. What sounds like a fair compromise between stakeholders can easily evolve in a permanent struggle between the stakeholders about the ultimate...
Persistent link: https://www.econbiz.de/10005504292
When stakeholder protection is left to the voluntary initiative of managers, relations with social activists may become …
Persistent link: https://www.econbiz.de/10005504332
We evaluate the net benefits of the Sarbanes-Oxley Act (SOX) for shareholders by studying the lobbying behaviour of investors and corporate insiders to affect the final implemented rules under the Act. Investors lobbied overwhelmingly in favour of strict implementation of SOX, while corporate...
Persistent link: https://www.econbiz.de/10005504338
The paper studies the role of risk arbitrage in takeover contests. We show that arbitrageurs have an incentive to accumulate non-trivial stakes in a company target of a takeover. For each arbitrageur, the knowledge of his own presence (and that he will tender a positive fraction of his shares)...
Persistent link: https://www.econbiz.de/10005504384
In this Paper we use agency theory to study the active role of the CEO in the formulation of corporate strategy. We allow the agent (CEO) to play a role in defining the parameters of the agency problem, in an incomplete contracting model in which the agent can be rewarded based only on financial...
Persistent link: https://www.econbiz.de/10005504388