We propose a model in which firms compete to attract better managers by using corporate governance as part of an optimal executive compensation scheme. Higher governance decreases the cost of taking disciplinary actions against managers, but when managerial talent is scarce, competition among firms to attract better managers implies that firms under-invest in governance. The reason is that mana...

This paper provides new evidence for the relationship between the nature of banking relationships, managerial ownership and operational performance in supporting reciprocal effects between these variables in the context of small and medium enterprises (SMEs). A simultaneous equations model was applied to a sample of 4,163 Portuguese SMEs and to cross-section data. Evidence was found that these ...

Empirical evidence on the causal effects of managerial ownership on firm performance has been elusive due to a lack of within-firm variation and credible empirical design. This paper identifies this causal effects exploiting the 2003 Tax Cut as a quasi-natural experiment, which increased the net-of-tax effective managerial ownership. Consistent with predictions from agency theory, our differenc...

The objective of this study was to construct a profile of managerial competencies, based on the consensus of nurse coordinators in the field. This study was developed in a philanthropic hospital in São Paulo, following the research-action model, and included 13 nurse coordinators as participants. The data collection was performed using the focal group technique. Data analysis was performed usin...

This paper examines the impact of managers’ social capital on managerial performance. Two dimensions of social capital are compared—the structural embeddedness (i.e., configuration) of a manager’s network of work relations and the relational embeddedness (i.e., quality) of those relations. Based on a sample of 120 product and sales managers in a Fortune 100 pharmaceutical firm, this paper prese...

This study analyzes the effect of managerial style on firm value by partitioning general and administrative (G&A) expenses in the REIT industry into a nondiscretionary “structural” component associated with the costs of asset and liability management and a discretionary or “style” component. The discretionary component is significantly related to at least one measure of stylespecifically, the p...

Firms can increase profitability by appropriately motivating managers. We investigate drivers of managerial motivation, and propose how firms can use performance-pay to alter motivational patterns. We focus on the agent’s optimal effort decision in trading off compensation utility with effort cost in a static and dynamic setting. Surprisingly, we find that lower risk aversion or increased pay a...

We study the formation of cartels within two di¤erent contexts. First, we consider internal-external stability based models which, due to …rms’ free-riding incentives, lead to the inexistence of stable cartels. Second, we introduce the dynamic aspect of coalition formation. That is, when considering a cartel we consider also any cartel that can be reached through a succession of moves. Despite ...

Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We study the agency problem between shareholders and a manager when the manager can hedge his incentive compensation using financial markets and s...