Board of director effectiveness and informal institutions: A meta‐analysis

Board Involvement, Director Expertise and Executive Incentives

Boards of directors have become more involved in monitoring and advising top management. We investigate how board involvement affects executive incentives in a project investment setting. To increase the probability of project success, the CEO engages in a sequence of tasks: first acquiring information to evaluate a potential project, then reporting his assessment of the project to the board, a...

Local Director Talent and Board Governance

This paper examines the effects of director labor markets at firm headquarter locations on board governance. We argue that firms can implement better board governance by drawing on local director talent when a larger pool of prospective directors (officers and directors of same-industry firms, financial institutions, and universities) is located near the firm. We find that firms located near la...

Informal Institutions and Property Rights

In recent years, the call for strong and clear property rights has grown in law and development circles. In the landmark book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, de Soto put forth the claim that “strong and clear” property rights, formalized rather than informal, are necessary for economic efficiency and for the protection of the poor, who occu...

Informal Institutions a “Weaknesses” of Hu Behavior

Matching in Informal Financial Institutions.

This paper analyzes an informal financial institution that brings heterogeneous agents together in groups. We analyze decentralized matching into these groups, and the equilibrium composition of participants that consequently arises. We find that participants sort remarkably well across the competing groups, and that they re-sort immediately following an unexpected exogenous regulatory change. ...