The last forty years have seen two major economic trends: Wages have stalled despite rising productivity, and institutional investors have replaced retail shareholders as the predominant owners of the American equity markets. A few powerful institutional investors—dubbed common owners—now...

Does corporate governance structure matter for firm value? We develop a model in which the allocation of control rights between shareholders and managers (“governance structure”) affects managers' incentive to invest (strong governance tightens managerial freedom and weak governance loosens...