We model long-run firm performance, management compensation, and corporate governance in a dynamic, nonstationary world. We show that managerial compensation and governance policies, which, in a single-period context, can best be rationalized by self-serving managerial influence over board policy, are shareholder-wealth maximizing in a dynamic setting. For example, shareholder wealth is maximiz...

This paper deals with corporate governance issues and competition policy. The impact of private benefits extraction on the values of oligopolistic firms is analyzed. Private benefits are assumed to generate costs which create price distortion on the product market. For a wide range of industry concentrations, we prove that this may affect the profit (i.e. the value) of the firms in a positive s...

We compare the impact of mandatory against voluntary ownership transfer on stock price informativeness using the unique research setting provided by the Split Share Structure Reform in China. Ownership transfers from state to private entity are expected to improve corporate governance, which in turn reduce managerial incentives to withhold value-relevant information to outside investor. However...

We examine the relation between a broad set of corporate governance factors and various measures of managerial behavior and organizational performance. Using a sample of 2,126 firms we distill 38 structural measures of corporate governance (e.g., board characteristics, stock ownership, anti-takeover variables etc.) to 13 governance factors using principal components analysis. For a wide set of ...

It is sometimes argued in the corporate governance literature that the total share of corporate value that can be extracted by a manager is fixed and independent of the avenues through which value is extracted. Shareholders need not worry about an activity such as insider trading, the story goes, because any profits achieved by a manager through insider trading will simply offset conventional c...

Failure in bank corporate governance has been seen as a contributing factor to excessive risk-taking pre-crisis with devastating implications as risks realised during the financial crisis. Unfortunately, the empirical evidence on the impact of managerial incentives on bank crisis performance is scarce. Moreover, bank strategy has not previously been accounted for. Hence, this paper presents nov...

What are the forces that influence strategic managerial decisions in the context of economic transition? In this paper, we analyse how strategic and governance forces influence the degree of discretion perceived by managers operating in the context of the transition economy of Russia. An exploratory case study provides insights about the managerial decision-making process in a transition econom...

From a meta-model linking a firm’s corporate governance system to managerial discretion (Charreaux, 2008), this article presents a specific corporate governance model for the high growth entrepreneurial firm. A survey of the empirical literature on the governance of entrepreneurial firms confirms the plausibility of this theoretical framework, especially with respect to the cognitive dimension ...

This paper investigates the characteristics of firms that adopt persistent conservative financial policies. We are mainly interested in the determinants of the likelihood of firms adopting the persistent policies of low-leverage and high-cash holdings simultaneously. In this paper, we classify firms as financially conservative if they adopt both low-leverage and high-cash policies at the same t...