A Corporate Governance Reform as a Natural Experiment for Incentive Contracts

A Framework for Assessing Corporate Governance Reform∗

In light of recent corporate scandals, numerous proposals have been introduced for reforming corporate governance. This paper provides a theoretical framework through which to evaluate these reforms. Unlike various ad hoc arguments that have been made, this framework recognizes that governance structures arise endogenously in response to the constrained optimization problems faced by the releva...

Incentive effects of funding contracts: an experiment

We examine the incentive effects of funding contracts on entrepreneurial effort and on allocative efficiency. We experiment with funding contracts that differ in the structure of investor repayment and, thus, in their incentives for the provision of entrepreneurial effort. Theoretically the replacement of a standard debt contract by a repayment-equivalent non-monotonic contract reduces effort d...

Enterprise Reform and Corporate Governance in Russia: a Quantitative Survey

The objective of this paper is to verify the range and depth of the study on corporate governance in Russia through a comprehensive survey of 202 research works. With regard to the internal structure of Russian corporations, a great deal of research has been conducted in a relatively short time since the collapse of the Soviet Union by many highly motivated researchers, who have provided insigh...

A proposed corporate governance reform: Financial statements insurance

The inherent conflicts of interest in the auditor–client relationship and the unobservability of financial statement quality are likely culprits in the recent corporate scandals such as Enron and WorldCom. The solution proposed here is a financial statement insurance (FSI) mechanism. Instead of appointing and paying auditors, companies would purchase financial statement insurance that provides ...

The Reform of (Corporate) Governance in Japan