We examine whether the Sarbanes-Oxley Act has a major role in reducing the diversification discount and enhancing internal capital markets efficiency. The act proposes new rules and regulations on financial practice and reshapes corporate governance to insure alignment of incentives between...

Internal capital markets (ICMs) provide firms an alternative to costly external financing; however, they also provide an avenue to avoid the monitoring associated with issuing external capital. We argue that firms operating inefficient internal capital markets will avoid outside financing....

Personal managerial indiscretions are separate from a firm's business activities but provide information about the manager's integrity. Consequently, they could affect counterparties' trust in the firm and the firm's value and operations. We find that companies of accused executives experience...

It is controversial whether governance structure affects the value of the firm. This paper examines the sensitivity of firm value to capital expenditure under various levels of CEO power. The paper uses two measures of CEO power and finds that the greater the power of the CEO the less the...

We explore the labor market effects of gender and race by examining board leadership appointments. Prior studies are often limited by observing only hired candidates, whereas the boardroom provides a controlled setting where both hired and unhired candidates are observable. Although diverse...

The appointment of contributing directors is associated with immediate positive market reaction, and the presence of contributing directors in the board enhances long-run firm value. We identify the contribution of directors by alpha, or the abnormal risk-adjusted stock returns that are...