Tag Archives: Corporate Governance

Tug of War in Corporate Environmental Lobbying 

By | March 24, 2023

Do firms engage in political competition in environmental lobbying when they have opposing environmental stances? If yes, is there any deadweight loss of corporate value and social resources due to such political competition? Our recent working paper theoretically and empirically explores how firms can compete to capture an environmental policy through lobbying. Corporate lobbying is… Read More »

What Can Restructuring Laws Do? 

By | March 2, 2023

Corporate bankruptcy law is a tool to resolve the financial distress of corporations. Unviable corporations are liquidated and the proceeds distributed to the creditors. Viable corporations are restructured and put on a new financial footing. Following the model of Chapter 11 of the US Bankruptcy Code, many jurisdictions worldwide have strengthened or introduced such restructuring… Read More »

To Centralize or Not: Control Right Allocation and Auditor Incentives 

By | March 1, 2023

A corporation is a nexus of incomplete contracts that gives a demand for control right allocations. Whether firms should centralize or decentralize control rights depends on local information and coordination. This study uses the audit industry in China as a laboratory to shed light on to what extent control right allocation within an organization affects… Read More »

Effects of Public Firms’ Business Ties with the Government on Firm-Level CSR Exposure

By | February 7, 2023

With growing attention on corporate social responsibility (CSR) or the more recent expression of environmental, social, and governance (ESG), many countries and regions have imposed strict mandatory rules on CSR disclosures to better serve investors and other stakeholders. At the same time, government incentive programs such as the Paycheck Protection Program (PPP) were also effective… Read More »

It’s Not Easy Being Green  

By | February 6, 2023

Being green is not easy, but is it costly? Our recent paper attempts to answer this question for the U.S. federal government. The federal government is the largest consumer in the world, spending more than $650 billion buying products and services from firms in the private sector each year. Government contracts are considered green if… Read More »

Remedial Actions After Corporate Social Irresponsibility 

By | February 2, 2023

Reputational damage resulting from media, consumer, or investor outcry often follows corporate scandals. For instance, notable oil spills, from Exxon’s 1989 Exxon Valdez disaster to BP’s 2010 Deepwater Horizon disaster, have resulted in both hundreds of millions of dollars in direct regulatory penalties as well as short-term stock market losses (Länsilahti 2012), substantial longer-term losses… Read More »

The Value of Banking Governance Reform in China

By | February 1, 2023

Motivation   Banks collect deposits from households and allocate funds to borrowing firms in the real economy. Banks play two fundamental roles in fund allocation: selecting the best borrower from potential borrowers and monitoring them (Diamond 1984, 1991). The successful fulfillment of those two roles builds on a good bank governance system that aims to protect… Read More »

Toxic CEOs, ESG Funds as Watchdogs, and the Labor Market Outcomes

By | January 25, 2023

In a new paper, I examine changes in CEO labor market outcomes following corporate environmental misconduct, which creates negative externalities that firms are required by law to prevent. Corporate activities create significant negative environmental externalities. These economic costs can exceed $4.7 trillion a year, are multi-sectoral, and appear through the entire lifecycle of products. Externalities… Read More »

Who’s Afraid Of Antitrust? As Of Late, (Minority) Private Equity Investors 

By | January 11, 2023

The antitrust world is changing. US agencies’ eyes are turning to finance, with the newest enforcement target being private equity (“PE”). Repeated public statements and speeches of US antitrust officials under the Biden administration  clearly signal this policy shift. This is no surprise for Europe. The European Commission, confirmed by the Courts, has also recently… Read More »

Debt Markets Retort to Mandatory Corporate Social Responsibility  

By | January 5, 2023

Over decades, scholars across disciplines have proposed and discussed myriad “objectives” of the firm—shareholder value maximization, stakeholder theory, long-term firm value maximization, shareholder welfare maximization, and shareholder wealth maximization with stakeholder interests. One extreme is shareholder primacy, and the other is stakeholder capitalism (or conscious capitalism). The latter advocates corporate social responsibility (CSR) and has… Read More »