This paper examines the desirability of having an interim performance evaluation (IPE) in the design of an optimal contract. While enabling the principal to plan and control the project process better, the IPE may also adversely affect the agent's morale in case of unfavorable IPE outcome....

We study a two-stage model in which the agent's ability is initially unknown to any party, but the principal can choose a pre-hire screening scheme to discover the agent's ability before offering a contract. Perfect screening enables the principal to fine-tune the contract to the agent's...

We study the relation between corporate social responsibility (CSR) and internal control quality by empirically testing that CSR can be used to reduce managers' agency behaviors. Consistent with this agency cost hypothesis, we find that CSR indeed improves the firms' internal control environment...