Passively managed index funds now hold over 25% of U.S. mutual fund and ETF assets. The rise of index investing raises fundamental questions about monitoring and corporate governance. We examine the voice and exit mechanisms and find that...Read more
We examine the within-firm resource allocation and restructuring effects of creditor intervention and their relationship to performance gains at firms violating covenants in private credit agreements. By linking firms to establishment-level data...Read more
This chapter reviews the single high profile case in which twentieth century antitakeover law has come to bear on management defense against a twenty-first century activist challenge?the Delaware Court of Chancery?s decision to sustain a low-...Read more
The manner in which hostile takeovers have historically been executed has just begun
to receive serious academic attention. Similarly, while the literature on the accuracy and determinants of share prices is voluminous, there has been...Read more
This paper analyses how outsiders, such as bidders or activist investors, overcome the lack of coordination and information among dispersed shareholders. We identify the two basic means to achieve this goal. First, the outsider must relinquish...Read more
This Article investigates the determinants of dividend policy in firms with concentrated
ownership structure. A review of the empirical literature shows that dividend payout ratios are lower in firms with controlling shareholders. We...Read more
The separation of ownership and control has always been central in corporate governance debates. A large body of literature has sought to show that control-enhancing arrangements can deter investors. However, the experience of the last few years...Read more
We show that ambiguity aversion generates endogenous disagreement between a firm?s insider and outside shareholders. Outsiders are well-diversified, but the insider holds only equity of the firm, leading to endogenous difference of opinion. We...Read more
The separation of control and ownership ? the ability of a small group effectively to control a company though holding a minority of its cash flow rights ? is common throughout the world, but also is commonly decried. The control group, it is...Read more
We develop a search model of block trades that values the illiquidity of controlling stakes. The model considers several dimensions of illiquidity. First, following a liquidity shock, the controlling blockholder is forced to sell, possibly to a...Read more
This Article offers a new understanding of concentrated ownership ? the prevalent form of corporate ownership around the world ? by developing a framework for evaluating many corporate ownership patterns and exploring the resulting legal and...Read more
This paper develops a theory of the joint allocation of control and cash-flow rights in venture capital deals. When the need for VC advice and support calls for a highpowered outside claim, the entrepreneur should optimally retain control in...Read more