Designing and managing an effective corporate governance structure for Virtual Breeding Environments (VBEs) is a challenging process. Therefore, a governance model is required to define operational rules, bylaws and principles that will govern the behaviour of the members of a VBE during its life cycle. VBE governance will help to define who can make what decisions, who is accountable for which...

Jump-starting stock markets in transition economies has proved difficult. These countries lack effective legal governance structures and face severe information problems. Yet not all financial markets failed because of adverse conditions. Using China’s initial stock market development as a case study, this article suggests that administrative governance can substitute for formal legal governanc...

Economic performance depends crucially on how parties adapt to changing circumstances. We therefore study how the organization of economic activity can facilitate such adaptation. Where spot transactions would produce inefficient adaptation, we ask how governance structures (allocations of control) can facilitate relational contracts that improve on spot adaptation. We show that the optimal gov...

This study considers the influence of Dutch governance structures on the informativeness of reported unexpected changes in provisions. Characteristics of the corporate governance system in the Netherlands provide a unique opportunity to investigate the influence of characteristics of the governance system on market reactions to financial disclosures. This governance system allows a distinction ...

Using a simple but general formalization, we state the conditions under which one might expect a negative or positive relationship between preexisting trust and governance complexity, and whether crowding out or complementarity arguments are necessary for such outcomes. Our analysis provides a platform for simple but rigorous analysis of other possible relationships between trust and governance...

We empirically examine how corporate governance affects the structure of executive compensation contracts. In particular, we analyze the implicit weights of firm performance measures in explaining CEO compensation. We find that weaker corporate governance is associated with compensation contracts that put more weight on accounting-based measures of performance (i.e., return on assets) than on s...