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Political corruption imposes substantial costs on U.S. firms and affects their behavior. Yet, we understand little about how it affects executive compensation. We provide causal evidence that local political corruption drives up CEOs’ compensation. The compensation premium consists of both...
Persistent link: https://ebvufind01.dmz1.zbw.eu/10014236386
Political corruption imposes substantial costs on U.S. firms and affects their behavior. However, we understand little about how it affects executive compensation. We provide causal evidence that local political corruption drives up CEOs’ compensation. We show that a conspiracy theory is not...
Persistent link: https://ebvufind01.dmz1.zbw.eu/10014254681
We study dynamic incentive contracts in a continuous-time agency model with productivity switching between two unobserved states, about which an investor may learn by deviating from the myopically optimal action. The optimal contract balances short-run profits from myopic actions and the...
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