Entrepreneurship and Innovation: The Hidden Costs of Corporate Governance in Europe

Entrepreneurship and Corporate Governance

This paper explores the relationship between the theory of the firm and the theory of financial markets. I begin with Mises’s claim that the defining feature of an industrialized, market economy is the use of financial markets to allocate capital among firms and among industries. This presupposes a market for the ownership and control of productive assets. Unfortunately, the Austrian theory of ...

Corporate Governance and Innovation: Theory and Evidence

We develop a theory to show how external and internal corporate governance mechanisms a¤ect innovation. We show that there is a U-shaped relation between innovation and external takeover pressure, which arises from the interaction between expected takeover premia and private bene…ts of control. We show strong empirical support for the predicted relation using ex ante and ex post innovation meas...

Corporate Governance and Innovation: Theory and Evidence

We develop a theory of the e¤ects of external corporate governance mechanisms — such as takeover pressure — and internal mechanisms — such as compensation contracts and monitoring intensity — on innovation. Our theory generates the following testable predictions: (i) innovation varies non-monotonically in a U-shaped manner with takeover pressure; (ii) innovation increases with monitoring intens...

The Impact of Innovation Climate & Job Satisfaction on Corporate Entrepreneurship

Corporate Governance, Innovation, and Economic Performance in the Eu (cgep)

The dominant role of banks, the system of co-determination and company-centered management are traditionally seen as the critical elements of the German system of corporate governance. Important changes have taken place in recent years in this system. Of particular importance have been developments in the relationship between German corporations and the financial system. Particularly in the lat...