While many existing studies report that corporate diversification destroys shareholder value, two recent studies challenge these findings. Schoar (2002) finds that plants in conglomerates are more productive than those in comparable single-segment firms, although conglomerates are traded at...

This paper models a situation that an entrepreneur with assets in place and uncertain development opportunities decides whether to sell his business to public capital markets or to place it privately to a conglomerate. It finds that going-public is more profit enhancive, in most circumstances,...

How does quotation transparency affect financial market performance? Biais' (1993) irrelevance proposition shows that centralized markets yield the same expected bid-ask spreads as fragmented markets, other things equal. However, de Frutos and Manzano (2002) demonstrate that expected spreads in...

This paper fleshes out the rent extraction view of CEO compensation put forward by the managerial power theory (Bebchuk et al., 2002), and tests its main implications on the relation between CEO power and the structure of CEO pay. For a measure of CEO power most relevant to managerial power...

This paper studies the effects of principal's risk aversion on principal-agent relationship under hidden information. It finds that the agent's equilibrium effort increases and approaches the efficient level as the principal's risk aversion increases and tends to infinity. Allowing for random...

This paper fleshes out the rent extraction view of CEO compensation put forward by the managerial power theory (Bebchuk, Fried, & Walker, 2002), and tests its main implications on the relation between CEO power and the structure of CEO pay. For a measure of CEO power most relevant to managerial...