We are concerned with the design of a constitution for a firm - an ex ante contract which assigns residual rights of control (and possibly residual income rights) without reference to the issue to be decided. We focus attention on two polar constitutions: non-profit cooperatives and outside...

The success of mass privatization requires either that new owners are active in corporate affairs or that the original owners sell their shares to those who are willing to be active: voice or exit is necessary. We examine the structure of ownership and the extent of voice and exit in one...

The rapid growth in index funds and significant consolidation in the asset-management industry over the past few decades has led to higher levels of common ownership and increased attention on the topic by academic researchers. A consensus has yet to emerge from the literature regarding the...

This paper provides a theoretical model for explaining the separation of ownership and control in firms. An entrepreneur hires a worker for providing eff ort to complete a project. The worker's eff ort determines the probability that the project is completed on time, but the worker receives...

Purpose: This study explores the probability of expropriation of minority shareholders by controlling shareholders in the form of CEO compensation under an imperfect governance institution by using a novel Chinese dataset over 2001-2010.Design/methodology/approach: We use a direct method to...