This paper analyzes the independence of boards of directors as an optimally chosen, non-contractible behavior. A board behaves loyally to a CEO when it agrees to a negative NPV-project, giving the CEO private benefits. While the CEO benefits from competent directors because they help him make...

This paper analyses how institutional factors affect satisfaction with democracy (SWD). It employs a panel of observations from Eurobarometers in the time span 1990-2000, and thus is one of the first studies to consider the longitudinal dimension of the driving forces of SWD. We find that...

Using modern methods for analyzing multi-level data, we find that, by and large, citizens of OECD countries are more satisfied with the way democracy works in their country if more environmental policies are in place and if environmental quality is higher. We also document that parents care...

This paper explores the idea that the speed with which equity prices reflect any benefits or costs of voluntary disclosure quality (VDQ) varies across firms. We find that for firms where we expect informational efficiency to be high, VDQ is not associated with returns beyond those available...

This paper explores one potentially important channel through which immigration may drive support for extreme right-wing parties: the presence of immigrants in one’s neighborhood. We study the case of the Freedom Party of Austria (FPÖ). Under the leadership of Jörg Haider, this party...

This paper develops a structural equilibrium model with intertemporal macroeconomic risk, incorporating the fact that firms are heterogeneous in their asset composition. Compared with firms that are mainly composed of invested assets, firms with growth options have higher costs of debt because...

This paper explores one potentially important channel through which immigration may drive support for extreme right-wing parties: the presence of immigrants in one’s neighborhood. We study the case of the Freedom Party of Austria (FPÖ). Under the leadership of Jörg Haider, this party...

This paper develops a dynamic trade-off model of optimal capital structure that takes into ac- count the fact that most firms have both invested assets and growth opportunities. These two sources of value react quite differently to business cycle risk. In particular, growth options are more...