As companies continue to make large investments in information technology (IT), questions about how and in what contexts such investments pay off have gained importance. We develop a theoretical framework to explain how IT investments could pay off in the economically significant context of...

According to agency theory, debt is a useful governance mechanism for curbing the tendency of managers to over-invest in firm growth. First, we extend this view by using the theory of rules versus discretion to explain why the ability of debt to constrain excessive growth is contingent upon...

The empirical studies to date have not found consistent support for the performance advantages of international diversification. One reason suggested by internalization theory is that leveraging firm specific assets is critical for enhancing performance from international diversification. We...

With their increasing equity ownership, institutional investors have been hailed as a possible solution to governance problems with the ability to reduce the power of managers. However, there are some barriers that decrease their effectiveness in providing such governance. These include barriers...