"We rely on a survey of Swiss firms to document deviation from first-best for reasons of internal 'fairness' when allocating resources. This 'socialist' practice is more widespread in smaller than in larger firms. It ignores the reputation and past performance of the managers who apply for...

"This paper is about shareholder value. We examine whether welfare considerations justify that target and whether competitive markets force firms to pursue it. We also argue that shareholder value is strictly an ill-defined goal. We report evidence from a large sample of listed firms across the...

Corporate managers typically estimate the value of capital projects by discounting the project's expected future net cash flows at the cost of capital. The capital asset pricing model (CAPM) is generally used to estimate that cost. But, as anyone who has worked on the finance or business...