FINS5581 Empirical Corporate Governance - 2020

Term 3
6 Units of Credit
Banking & Finance
This course outline is for the current semester. To view outlines from other years and/or semesters, visit the archives

1. Course Details

Summary of Course

​FINS5581 is an elective for students in the PhD and MPhil programs. The course explores a number of empirical questions and statistical techniques from corporate finance, with application to topics in corporate governance. Topics covered include applications of agency theory and optimal contracting theory, an overview of internal and external corporate control mechanisms, and a survey of major methodological approaches used in this research area including their strengths and weaknesses. The primary topics to be covered are corporate boards of directors, executive incentives, and manifestations of poor governance. We will also discuss some of the major databases used for this type of research. The  topics to be covered are all in the lecturer’s area of expertise.

The course assumes a sound knowledge of the economic theory relating to the foundations of finance, including basic agency theory and financial contract theory. The course will emphasize both the major economic questions concerning the needs for and the effectiveness of these critical corporate governance mechanisms and to help researchers to create effective research designs necessary to produce compelling evidence of causal relationships.

Teaching Times and Locations

Please note that teaching times and locations are subject to change. Students are strongly advised to refer to the Class Timetable website for the most up-to-date teaching times and locations.

View course timetable

Course Policies & Support

Course Aims and Relationship to Other Courses

​By the end of the course, you should be familiar with some of the classic research as well as some of the most cutting edge work in the field of corporate governance. You should also understand the major empirical approaches employed in this research area, and a good understanding of what makes for a strong research paper and to be well-equipped to undertake your own research studies. However, ultimately, the time and effort that each student devotes to the course will determine how much he or she learns.

This course will focus primarily on recent research over the last couple of years. We will explore key questions in corporate governance and their effects on corporate decision making. In the process of studying these topics, I will primarily emphasize the empirical predictions of theory, and the statistical methodology used in corporate finance and the strengths and weaknesses of the existing statistical evidence.

This is a Postgraduate (PhD) course. Participants should have a strong interest in corporate finance. Students will find many of the econometric techniques covered in Research Method in Finance 1 and 2 very useful in undertaking their research projects and they should be prepared to use these techniques. In addition, students should have a solid background in the microeconomic theory of the firm.

2. Staff Contact Details

Position Title Name Email Location Phone Consultation Times
Lecturer-in-chargeProfRon MasulisRoom: 354, Business School building - Ref E12+61 2 9385 5860Tuesday 5-6 pm (or by appointment)

3. Learning and Teaching Activities

Approach to Learning and Teaching in the Course

​The teaching and learning approach adopted emphasises the importance of developing critical thinking and analytical skills. This is achieved through a mix of lectures, class presentations and discussions, and a research paper.

Learning Activities and Teaching Strategies

​Weekly Class Activities:

In order to obtain the full benefit from the course, students should:

1. Read the assigned reading for each class and be prepared to ask critical questions and to answer specific questions about the readings.

2. Attend all seminar classes and arrive on time.

3. Sign up to present two Powerpoint critiques of assigned readings.

4. Actively participate in class: Answer questions posed by the instructor, and ask your own questions.

5. If issues are still not clear, first ask your classmates, then ask me, send me a mail, or come to my office during the consultation hours.

The rationale for the above suggestions and requirements is to achieve the learning outcomes specified in Section 2.4. The design of the course presupposes that students are interested in the topics and will endeavour to learn the material presented. Lectures and class discussions and presentations are all aimed to facilitate your learning. However, ultimately, the time and effort each student devotes to the course will determine how much he or she learns from it.

The first four classes will be primarily in a lecture format with class discussions.

During the remaining 3-hour class sessions, a few minutes at the start of class will be devoted to a short discussion of the topics based on survey paper and methodology readings followed by student presentations and discussions of assigned readings. The early lectures are intended to establish an analytical framework for investigating major corporate governance mechanisms. The lecturer will focus on the most challenging concepts and students are encouraged to engage in a dialogue to facilitate better understandings of the materials. The lecturer will also highlight examples of effective writing in the assigned readings.

The remaining six classes will generally be composed of student presentations and class discussions of the research articles and should focus on key issues in the assigned readings with emphasis on the basic findings and the limitations of the paper in terms of data sources and documentation, statistical methodology, analytical rigor of the economic arguments, contribution to the literature, the paper's organization and writing effectiveness. These discussions will help students develop both an understanding of the theoretical underpinning of the literature and a familiarity with how these theories are evaluated empirically.

Beyond the classroom:

You are expected to complete the required readings indicated by an * before the class and be prepared for class discussions and presentations and to complete a research paper by the end of the semester. Outside the class, students are encouraged to form study groups to engage in interactive critical discussions of the assigned research articles. Students are also expected to attend the weekly finance seminars and brown bag workshops when the topics are in the corporate finance/governance area.

You are encouraged to fully utilise the available consultation hours to best prepare for the assignments. For the assignments, I will provide extra assistance in terms of suggesting further readings and discussing issues related to your presentations and research paper due at the end of the semester. You can also request feedback on your preliminary research paper topic.

5. Course Resources

​All required readings, and information on assessments can be found on the subject web page (See Moodle below). Students are strongly advised to log into the subject web page at least once a week. Additional readings: Additional academic reference papers will be listed on Moodle. They are available in full-text format (pdf files) from the library. The easiest way to find them is to (1) or (2) the faculty member’s personal or university webpage.

Course Outline – required and recommended readings

* Denotes required readings

** Denotes required literature surveys

Background Reading Prior to First Class

*Shleifer, A. and W. Vishny, 1997, A Survey of Corporate Governance, Journal of Finance 52, 737-783.

Becht, M., P. Bolton and A. Roell, 2003, Corporate Governance and Control in The Handbook of the Economics of Finance, Volume 1A, Corporate Finance (eds.) G. Constantinides, M. Harris and R. Stultz, North-Holland.

Black, B., A. G. de Carvalho, V. Khanna, W. Kim and B. Yurtoglu, 2020, Which Aspects of Corporate Governance Do and Do Not Matter in Emerging Markets, Journal of Law, Finance, and Accounting, 5(1), 137–177.

Chen, K., W. Guay, and R. Lambert. 2020, The Many Dials of Corporate Governance, Wharton School working paper.  

Jiang, F. and K. Kim, 2020, Corporate Governance in China. A Survey. Review of Finance, 733–772

Lehmann, E. and S. Vismara, 2020, Corporate Governance in IPO firms. Annals of Corporate Governance, 5(1), 1–100.

Guest, P. M. and M. Nerino, 2020, Do Corporate Governance Ratings Change Investor Expectations? Evidence from Announcements by Institutional Shareholder Services, Review of Finance, 24(4), 891–928.

Corporate Finance Paradigms (1 week)

Fama, E. 1980. Agency Problems and the Theory of the Firm, Journal of Political Economy 88(2): 288-307.

*Fama, E., and M. Jensen, 1983, Separation of Ownership and Control, Journal of Law and Economics 26, 301-325.

Hellwig, M., 2009, A Reconsideration of the Jensen-Meckling Model of Outside Finance, Journal of Financial Intermediation 18, 495-525.

*Jensen, M. and W. Meckling, 1976, Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure, Journal of Financial Economics 3(4): 305-60.

*Jensen, M., 1986, Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers, American Economic Review 323-329.

*Klein, B. and K. Leffler, 1981, The Role of Market Forces in Assuring Contractual Performance, Journal of Political Economy 89:4, 615-641.

Demsetz, H. (1983) "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics.

Methodological Approaches in Corporate Governance I – Endogeneity & Natural Experiments (1 week)

*Atanasov, V. and B. Black, 2016, Shock-Based Causal Inference in Corporate Finance and Accounting Research, Critical Finance Review, 5: 207–304

Atanasov, V. and B. Black, 2020, The Trouble with Instruments: The Need for Pre-treatment

Balance in Shock-Based Instrumental Variable Designs, Management Science, forthcoming.

*Roberts, M. and T. Whited, 2013, Endogeneity in Empirical Corporate Finance, Handbook of the Economics of Finance (PA), 493-572.

*Heath, D., M. C. Ringgenberg, M. Samadi and I. M. Werner, 2020, Reusing Natural Experiments. SMU Research Paper.

*Berg, T. and D. Streitz, 2019, Handling Spillover Effects in Empirical Research, SSRN working paper.

Athey, S. and G. Imbens, 2017, The State of Applied Econometrics: Causality and Policy Evaluation, Journal of Economic Perspectives 31(2), 3-32.

Bartlett, R. and F. Partnoy, 2020, The Misuse of Tobin's Q, Vanderbilt Law Review, 73(2), 353-372.

Methodological Approaches in Corp. Governance II – Matching Methods, DID & Panel Regressions (1 week)

*Bertrand, M. and S. Mullainathan, 2003, Enjoying the Quiet Life? Corporate Governance and Managerial Preferences, Journal of Political Economy, 111, 1043-1075.

Bertrand, M. and E. Duflo and S. Mullainathan, 2004, How Much Should We Trust Differences–in-Differences Estimates? Quarterly Journal of Economics, 119, 249-275.

*Chaney, T., D. Sraer and D. Thesmar, 2012, The Collateral Channel: How Real Estate Shocks Affect Corporate Investment, American Economic Review, 102, 2381-2409.

*Gormley, T. and D. Matsa, 2014, Common Errors: How to (and Not to) Control for Unobservable Heterogeneity, Review of Financial Studies, 27(2), 617-661.

Karpoff, J., A. Koester, D.S. Lee and G. Martin, 2017, Proxies and Databases in Financial Misconduct Research, The Accounting Review, 92(6), 129-163.

Karpoff, J. and M. Wittry, 2018, Institutional & Legal Context in Natural Experiments: The Case of State Anti-Takeover Laws, Journal of Finance, 73(2), 657-714.

*Petersen, M., 2009, Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches, Review of Financial Studies, 22(1), 434-480.

*Roberts, M. and T. Whited, 2013, Endogeneity in Empirical Corporate Finance, Handbook of the Economics of Finance (PA), 493-572.

Grieser, W. and C. Hadlock, 2019, Panel-Data Estimation in Finance: Testable Assumptions and Parameter (In)Consistency, Journal of Financial and Quantitative Analysis 54, 1-29.

Methodological Approaches in Corporate Governance III – DDR (1 week)

*Appel, I., T. Gormley and D. Keim, 2020, Identification Using Russell 1000/2000 Index Assignments: A Discussion of Methodologies, University of Pennsylvania working paper.

Bakke, T. and T. Whited, 2012, Threshold Events and Identification: A Study of Cash Shortfalls, Journal of Finance 67(3), 1083–1111.

Bena, J. and T. Xu, 2013, Competition and Ownership Structures of Closely-Held Firms, Review of Financial Studies, 30(5), 1583-1626.

Chang, Y., H. Hong, E. Liskovich, 2015, Regression Discontinuity and the Price Effects of Stock Market Indexing, Review of Financial Studies, 28(1), 213-246.

*Chemmanur, T. and X. Tian, 2018, Do Antitakeover Provisions Spur Corporate Innovation? A Regression Discontinuity Analysis, Journal of Financial and Quantitative Analysis, 53(3), 1163-1194.

Colak, G. and T. Whited, 2007, Spin-offs, Divestitures and Conglomerate Investment, Review of Financial Studies, 20, 557-595.

*Crane, A., S. Michenaud and J. Weston, 2016, The Effect of Institutional Ownership on Payout Policy: A Regression Discontinuity Design Approach, Review of Financial Studies, 29 (6), 1377-1408.

*Cunat, V., M. Guadalupe and M. Gine, 2012, The Vote Is Cast: The Effect of Corporate Governance on Shareholder Value, Journal of Finance, 67(5), 1943-1977.

Kwan, A., R. Masulis and T. McInish, 2015, Trading Rules, Competition for Order Flow and Market Fragmentation, Journal of Financial Economics, 115, 330-48.

*Roberts, M. and T. Whited, 2013, Endogeneity in Empirical Corporate Finance, Handbook of the Economics of Finance (PA), 493-572 (sections on Matching and DDR).

Corporation Political Ties and Social Responsibility (1 week)

Akey, P. and I. Appel, 2019, Environmental Externalities of Activism, SSRN working paper.

Alok, S. and M. Ayyagari, 2020, Politics, State Ownership, and Corporate Investments, The Review of Financial Studies, 33(7), 3031–3087.

Babenko, I., V. Fedaseyeu and S. Zhang, 2020, Do CEOs Affect Employees’ Political Choices? The Review of Financial Studies, 33(4), 1781–1817.

Bolton, P., T. Li, E. Ravina and H. Rosenthal, 2020, Investor Ideology, Journal of Financial Economics, 137(2), 320–352.

Chen, T., H. Dong and C. Lin, 2020, Institutional Shareholders and Corporate Social Responsibility, Journal of Financial Economics, 135(2), 483–504.

*Child, T., N. Massoud, M. Schabus and Y. Zhou, 2020, Surprise Election for Trump Connections, Journal of Financial Economics, forthcoming.

Di Giuli, A. and L. Kostovetsky, 2014, Are Red or Blue Companies More Likely to Go Green? Politics and Corporate Social Responsibility, Journal of Financial Economics, 111(1), 158–180.

Dyck, A., K. Lins, L. Roth, M. Towner and H. Wagner, 2020, Renewable Governance: Good for the Environment? SSRN working paper.

*Dyck, A., K. V. Lins, L. Roth and H. F. Wagner, 2019, Do Institutional Investors Drive Corporate Social Responsibility? International Evidence. Journal of Financial Economics, 131(3), 693–714.

Flammer, C., 2020, Corporate Green Bonds. Journal of Financial Economics, forthcoming.

Flammer, C., 2015, Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach, Management Science, 61(11), 2549–2568.

*Knill, A., B. Liu, and J. McConnell, 2020, Media Partisanship and Fundamental Corporate Decisions, Purdue University working paper.

Levine, R., C. Lin and Z. Wang, 2018, Pollution and Human Capital Migration: Evidence from Corporate Executives, NBER working paper.

Naaraayanan, L. Sachdeva and V. Sharmak, 2020, The Real Effects of Environmental Activist Investing, SSRN working paper.

Shive, S. A. and M. M. Forster, 2020, Corporate Governance and Pollution Externalities of Public and Private Firms, The Review of Financial Studies, 33(3), 1296–1330.

Using Crisis Management as an Experimental Setting (1 week)

Babina, T., A. Bernstein and F. Mezzanotti, 2020, Crisis Innovation, SSRN working paper.

Croci, E., G. Hertig, L. Khoja and L. Lan, 2020, The Advisory and Monitoring Roles of the Board - Evidence from Disruptive Events. SSRN working paper.

Dai, Y., P. R. Rau, A. Stouraitis and W. Tan, 2020, An Ill Wind? Terrorist Attacks and CEO Compensation, Journal of Financial Economics, 135(2), 379–398.

*Ding, W., R. Levine, C. Lin and W. Xie, 2020, Corporate Immunity to the COVID-19 Pandemic, SSRN working paper.

*Fazio, D., T. Silva and J. Skrastins, 2020, Economic Resilience, Spillovers, Courts and Vertical Integration, SSRN working paper.

*Kamiya, S., J. Kang, J. Kim, A. Milidonis and R. Stulz, 2020, Risk Management, Firm Reputation, and the Impact of Successful Cyberattacks on Target Firms. Journal of Financial Economics, forthcoming.

Market for Corporate Control (1 week)

*Dessaint, O., E. Eckbo and A. Golubov, 2020, The Anatomy of Acquirer Returns, SSRN working paper.

Eckbo, E., T. Makaew and K. Thorburn, 2018, Are Stock Financed Takeovers Opportunistic? Journal of Financial Economics 128, 443-465.

Bebchuk, L. A., A. Brav, W. Jiang and T. Keusch, 2020, Dancing with Activists, Journal of Financial Economics, 137(1), 1–41.

Guo, L., J. Kong and R. Masulis, July 2020, Market for Corporate Control Efficiency and the Impact of Unemployment Insurance, UNSW working paper.

Harford, J., R. Schonlau and J. Stanfield, 2019, Trade Relationships, Indirect Economic Links, and Mergers. Management Science, 65(7), 2947-3448.

Isil Erel, I., Y. Jang, B. Minton and M. Weisbach, 2020, Corporate Liquidity, Acquisitions, and Macroeconomic Conditions, Journal of Financial and Quantitative Analysis, forthcoming.

*Johnson, W., J. Karpoff and M. Wittry, 2020, The consequences to directors of deploying poison pills. SSRN working paper.

Karpoff, J. and M. Wittry, 2018, Institutional and Legal Context in Natural Experiments: The Case of State Antitakeover Laws, Journal of Finance, 73(2), 657-714.

*Li, K. and J. Wang, 2020, How Do Mergers and Acquisitions Foster Corporate Innovation? Inventor-level Evidence, SSRN working paper.

*Massoud, N., K. Song and N. Tran, 2019, Lender Effects on Gains from Mergers and Acquisitions, SSRN working paper.

Wang, W. and Y. Wu, 2020, Managerial Control Benefits and Takeover Market Efficiency. Journal of Financial Economics, 136(3), 857–878.

Corporate Decisions & Boards of Directors (2 weeks)

Hermalin, B.E., and M.S. Weisbach, 2003. Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature, Federal Reserve Bank of New York Economic Policy Review 9(1), 7–26.

*Masulis, R., 2020, A Survey of Recent Evidence on Boards of Directors and CEO Incentives, Asia-Pacific Journal of Financial Studies 49, 7-35.

Adams, R., 2017, Boards and the Directors Who Sit on Them, in The Handbook of the Economics of Corporate Governance, coedited with B. Hermalin and M. Weisbach, 2017, Elsevier Publishers.

Adams, R., B. Hermalen and M. Weisbach, 2010, The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey, Journal of Economic Literature, 48(1), 58-107.

Knyazeva, A., D. Knyazeva, and L. Naveen, 2020, Diversity in Corporate Teams, Temple University working paper

Masulis, R. and S. Mobbs, 2011, Are All Inside Directors the Same? Evidence from the External Directorship market, Journal of Finance, 66(3), 823-872

Masulis, R., C. Wang and F. Xie, 2012, Globalizing the Boardroom - The Effects of Foreign Directors on Corporate Governance and Firm Performance, Journal of Accounting and Economics, 53(3), 527-554.

Knyazeva, A., D. Knyazeva and R. Masulis, 2013, The Supply of Corporate Directors and Board Independence, Review of Financial Studies, 26, 1561-1605.

Masulis, R. and S. Mobbs, 2014, Independent Director Incentives: Where Do Talented Directors Spend their Time and Energy? Journal of Financial Economics, 111, 406-429.

Guo, L. and R. Masulis, 2015, Board Structure and Monitoring: New Evidence from CEO Turnovers, Review of Financial Studies, 28(10), 2770-2811.

Masulis, R. and E. J. Zhang, 2019, How Valuable Are Independent Directors? Evidence from External Distractions, Journal of Financial Economics, 132(3), 226-256.

Liu, C.Y., A. Low, R. Masulis and L. Zhang, 2020, Monitoring the Monitor: Distracted Institutional Investors and Board Governance, Review of Financial Studies, forthcoming.

Banerjee, S., R. Masulis and A. Upadhyay, July 2020, Mitigating Effects of Gender Diverse Boards in Companies with Aggressive Management, UNSW working paper.

Masulis, R., S. Shen, and Z. Hong, August 2020, Personal Liability and Board Quality, SSRN working paper.

Masulis, R., C. Wang, and F. Xie and S. Zhang, May 2020, Older and Wiser or Too Old to Govern? ECGI working paper.

Masulis, R. and S. Mobbs, July 2020, Independent Director Reputation Incentives: CEO Compensation Contracts and Financial Reporting, UNSW working paper.

Coles, J., N. Daniel, and L. Naveen, 2014, Co-opted Boards, Review of Financial Studies, 27(6), 1751-1796.

Coles, J., N. Daniel, and L. Naveen, 2008, Boards: Does One Size Fit All? Journal of Financial Economics, 87, 329-356.

Hwang, B. and S. Kim, 2009, It Pays to Have Friends, Journal of Financial Economics, 93, 138-158.

Recent Board Research

Aggarwal, R., S. Dahiya and N. Prabhala, 2019, The Power of Shareholder Votes: Evidence from Director Elections, Journal of Financial Economics, 131(1), 134-153.

Adams, R., V. Ragunathan and R. Tumarkin, 2020, Death by Committee? An Analysis of Corporate Board (Sub-) Committees, Journal of Financial Economics, forthcoming.

*Alam, Z., M. Chen, and C. Ciccotello and H. Ryan, 2020, Board Structure Mandates and the Location of Directors, Management Science, forthcoming.

Andonov, A., Y. Hochberg, and J. Rauh, 2018, Political Representation and Governance: Evidence from the Investment Decisions of Public Pension Funds, Journal of Finance, 73(5), 2041-2086.

Appel, I., T. Gormley and D. Keim, 2016, Passive Investors, Not Passive Owners, Journal of Financial Economics, 121(1), 111-141

Balsmeier, B., L. Fleming and G. Manso, 2017, Independent Boards and Innovation, Journal of Financial Economics, 123, 536-557.

Barrios, J., P. Bianchi, H. Isidro and D. Nanda, 2020, Boards of a Feather: Homophily in Foreign Director Appointments Around the World. SSRN Working Paper.

Belot, F., E. Ginglinger, M. Slovin and M. Suishka, 2014, Freedom of Choice between Unitary and Two-Tier Boards; An Empirical Analysis, Journal of Financial Economics, 112, 364-385.

Borokhovich, K., T. Boulton, K. Brunarski and Y. Harman, October 2014, The Incentives of Grey Directors: Evidence from Unexpected Executive and Board Chair Turnovers, Journal of Corporate Finance, 28, 102-115.

Bouwman, C., 2011, Corporate Governance Propagation through Overlapping Directors, Review of Financial Studies, 24(7), 2358-2394.

Brav, A., M. Cain and J. Zytnick, 2020, Retail Shareholder Participation in the Proxy Process: Monitoring, Engagement, and Voting. SSRN working paper.

Brochet, F. and S. Srinivasan, 2014, Accountability of Independent Directors, Evidence from Firms Subject to Securities Litigation, Journal of Financial Economics, 111, 430-449.

*Brown, A. B., J. Dai and E. Zur, 2019, Too Busy or Well-Connected? Evidence from a Shock to Multiple Directorships, The Accounting Review, 94(2), 83–104.

*Bubb, R. and E. Catan, 2019, The Party Structure of Mutual Funds. SSRN working paper.

Burt, A., C. Hrdlicka, and J. Harford, 2020. How Much Do Directors Influence Firm Value? Review of Financial Studies, 33(4), 1818-1847.

Cai, X., F. Jiang and J. K. Kang, 2019, Remote Board Meetings and Corporate Governance: Evidence from China, NTU working paper

Campello, M., D. Ferres, G. Ormazabal, 2017, Whistleblowers on the Board? The Role of Independent Directors in Cartel Prosecutions, Journal of Law and Economics 60(2), 241-268.

Celikyurt, U., M. Sevilir and A. Shivdasani, 2014, Venture Capitalists on Boards of Mature Public Firms, Review of Financial Studies 27(1), 56-101.

Chen, K. and W. Guay, 2019, Busy Directors and Shareholder Satisfaction, Journal of Financial and Quantitative Analysis, forthcoming.

Chhaochharia, V., Y. Grinstein, G. Grullon and R. Michaely, 2017, Product Market Competition and Internal Governance: Evidence from the Sarbanes-Oxley Act, Management Science 63(5), 1405-1424.  

Chung, K. H. and C. Lee, 2020, Voting Methods for Director Election, Monitoring Costs, and Institutional Ownership. Journal of Banking & Finance 113, forthcoming.

Cohen, A. and C. Wang, 2013, How Doe Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment, Journal of Financial Economics, 110, 627-641.

Cornelli, F., Z. Kominek, and A. Ljungqvist, 2013, Monitoring Managers: Does it Matter? Journal of Finance, 68(2), 431-481.

Cremers, K., L. Litov and S. Sepe, March 2017, Staggered Boards and Firm Value, Revisited, Journal of Financial Economics,126(2), 422-444.

*Croci, E., G. Hertig, L. Khoja, and L. Lan, 2020, The Advisory and Monitoring Roles of the Board – Evidence from Disruptive Events. ECGI Working Paper.

D’Acunto, F., M. Weber and J. Xie, 2019, Punish One, Teach a Hundred: The Sobering Effect of Punishment on the Unpunished, Boston College working paper.

Dass, N., O. Kini, V. Nanda, B. Onal and J. Wang, 2014, Board Expertise: Do Directors from Related Industries Help Bridge the Information Gap? Review of Financial Studies, 27(5), 1533-1592.

Denis, D., D. Denis and M. Walker, 2015, CEO Assessment and the Structure of Newly Formed Boards, Review of Financial Studies, 28, 3338-3366.

*Dey, A., E. Engel and X. Liu, 2019, Determinants and Implications of Boards Leadership Structure, University of Chicago working paper.

Donaldson J., N. Malenko and G. Piacentino, 2020, Deadlock on the Board, Review of Financial Studies, forthcoming.

*Duchin, R., M. Simutin and D. Sosyura, 2020, The Origins and Real Effects of the Gender Gap: Evidence from CEOs’ Formative Years, Review of Financial Studies, forthcoming.

Eckbo, E., K. Nygaard and K. Thorburn, 2019, Board Gender-Balancing and Firm Value, European Corporate Governance Institute (ECGI) Working Paper.

Fahlenbrach, R., A. Low and R. Stulz, 2017, Do Independent Director Departures Predict Future Bad Events? Review of Financial Studies, 30(7), 2313-2358.

Fahlenbrach, R., A. Low and R. Stulz, 2010, Why Do Firms Appoint CEOs as Outside Directors? Journal of Financial Economics, 97, 12-32.

Falato, A., D. Kadyrzhanova and U. Lel, 2014, Distracted Directors: Does Board Busyness Hurt Shareholder Value? Journal of Financial Economics, 113(3), 404-426.

Fauver, L., M. Hung, X. Li and A. Taboada, 2017, Board Reforms and Firm Value: Worldwide Evidence, Journal of Financial Economics, 125, 120-142.

Ferreira, D., M. Ferreira and B. Mariano, 2017, Creditor Control Rights and Board Independence, Journal of Finance, 73(5), 2385-2423.

Field, L. and M. Lowry, 2019, Bucking the Trend: Why Do IPOs Choose Controversial Governance

Structures and Why Do Investors Let Them? SSRN Working Paper.

Field, L. and A. Mkrtchyan, 2017, The Effect of Director Experience on Acquisition Performance, Journal of Financial Economics, 123, 488-511.

Field, L. C., M. E. Souther and A. S. Yore, 2020, At The Table But Can Not Break Through The Glass Ceiling: Board Leadership Positions Elude Diverse Directors, Journal of Financial Economics, 137(3), 787–814.

Fisman, R., R. Khurana and M. Rhodes-Kropf, 2014, Governance and CEO Turnover: Do Something or Do the Right Thing? Management Science, 60(2), 319-337.

Fogel, K., L. Ma and R. Morck, January 2015, Powerful Independent Directors, NBER Working Paper No. 19809.

Fos, V., 2016, The Disciplinary Effects of Proxy Contests, Management Science, 63(3), 655-671.

Fos, V., K. Li, K and M. Tsoutsoura, 2018, Do Director Elections Matter? Review of Financial Studies, 31(4), 1499-1531.

Foroughi, P., A. Marcus, V. Nguyen and H. Tehranian, 2019, Peer Effects in Corporate Governance Practices: Evidence from Universal Demand Laws, EFA 2019 Meeting Working Paper.

Fracassi, C. and G. Tate, 2012, External Networking and Internal Firm Governance, Journal of Finance, 67, 153-194.

Francis, B., I. Hasan and Q. Wu, 2015, Professors in the Boardroom and their Impact on Corporate Governance and Firm Value, Financial Management, 44(3), 547-581.

Giannetti, M., G. Liao and X. Yu, 2015, The Brain Gain of Corporate Boards: Evidence from China, Journal of Finance, 70(4), 1629-1682.

*Giannetti, M. and T. Wang, 2020, Public Attention to Gender Equality and the Demand for Female Directors. SSRN working paper.

Hertzel, M., and H. Zhao, 2019, Why Do Boards Let Their CEOs Take Outside Directorships? Entrenchment and Embeddedness, Arizona State working paper

Hoitash, U. and A. Mktchyan, 2019, Directors’ Ties to Non-CEO Executives: Information Advantage or Entrenchment? SSRN working paper.

Houston, J., J. Lee and H. Shan, 2019, In Search of Board Independence: Former Employees, Shades of Gray and Director Classification, 2017 FIRS conference working paper.

Hsu, P.H, Y. Lu and H. Wu, 2019, Directors’ Re-election Pressure and Advisory Roles in Innovative Project Choices, Hong Kong Poly working paper.

Huang, Q., F. Jiang, E. Lie, K. Yang, 2014, The Role of Investment Banker Directors in M&A, Journal of Financial Economics, 112, 269-286.

Jenter, D., T. Schmid and D. Urban, 2019, Does Board Size Matter? LBS Working paper.

Jiang, W., H. Wan and S. Zhao, 2016, Reputation Concerns of independent Directors: Evidence from Individual Director Voting, Review of Financial Studies, 29(3), 655-696.

Khanna, E. H. Kim and Y. Lu, 2015, CEO Connectedness and Corporate Fraud, Journal of Finance, 70(3), 1203-1252.

Kim, E. Han and Yao Lu, 2018, Executive Suite Independence: Is It Related to Board Independence? Management Science, 64(3), 1015-1033.

Kang, J., S. Kim and S. Oh, 2019, Board Diversity and Director Dissent in Corporate Boards, Working Paper.

Lamoreaux, P., L. Litov and L. Mauler, 2019, Lead Independent Directors: Good Governance or Window Dressing? Journal of Accounting Literature, 43, 47-69.

Lee, J., K. Lee and J. Nagaragan, 2014, Birds of a Feather: Value Implications of Political Alignment between Top Management and Directors, Journal of Financial Economics, 112, 232-250.

Levit, D. and N. Malenko, 2016, The Labor Market for Directors and Externalities in Corporate Governance, Journal of Finance, 71(2), 775-808.

Li, F. and S. Srinivasan, 2011, Corporate governance when founders are directors, Journal of Financial Economics 102, 454-469.

Lin, C., M. Officer, R. Wang and H. Zou, 2013, Directors' and Officers' Liability Insurance and Loan Spreads, Journal of Financial Economics, 110(1), 37–60.

Lin, C., T. Schmid and Y. Sun, 2019, Conflict or Collusion? How Employees in the Boardroom Affect Executive Compensation, SSRN working paper.

Lu, J. and W. Wang, 2018. Managerial Conservatism, Board Independence, and Corporate Innovation, Journal of Corporate Finance, 48, 1-16.

Nguyen, B.D. and K. Nielsen, 2010, The Value of Independent Directors: Evidence from Sudden Deaths, Journal of Financial Economics, 98, 550–567.

Pang, J., X. Zhang and X. Zhou, 2020, From Classroom to Boardroom: The Value of Academic Independent Directors in China, Pacific-Basin Finance Journal, forthcoming.

*Pugachev, L. and A. Scherler, 2020, Neglecting Peter to Fix Paul: How Shared Directors Transmit Bank Shocks to Non-Financial Firms, Journal of Financial and Quantitative Analysis, forthcoming.

Ravina, E. and P. Sapienza, 2010, What Do Independent Directors Know? Evidence from Their Trading, Review of Financial Studies, 23(3), 962-1003.

Re-Jin, J.G., Q. Sun and X. Zuo, 2017, Innovation Diffusion in Network of Corporate Boards, Working Paper.

Schmidt, C. and R. Fahlenbrach, 2017, Do Exogenous Changes in Passive Institutional Ownership Affect Corporate Governance and Firm Value? Journal of Financial Economics 124, 285-306.

Stern, L., I. Erel, C. Tan and M. Weisbach, 2019, Selecting Directors Using Machine Learning, SSRN working paper

Wang, C., F. Xie, and M. Zhu, 2015, Industry Expertise of Independent Directors and Board Monitoring, Journal of Financial and Quantitative Analysis, 50(5), 929–962.

Manager Incentives – Overview (2 weeks)

Edmans, A. and X. Gabaix, 2016, Executive Compensation: A Modern Primer, Journal of Economic Literature, 54(4), 1232-1287.

Murphy, K., 2013, Executive Compensation: Where We Are and How We Got There, Handbook of the Economics of Finance (PA), 211-356.

Graham, J., C. Harvey, M. Puri, 2013, Managerial attitudes and corporate actions, Journal of Financial Economics, 109, 103-121.

Edmans, A., X. Gabaix and D. Jenter, 2017, Executive Compensation: A Survey of Theory and Evidence, Chapter 7 in Benjamin E. Hermalin and Michael S. Weisbach (eds.), Handbook of the Economics of Corporate Governance, Elsevier: Amsterdam, 383-539,

Hermalin, H. and M. Weisbach, Assessing Managerial Ability: Implications for Corporate Governance, Chapter 3 of The Handbook of the Economics of Corporate Governance, coedited with B. Hermalin and M. Weisbach, 2017, Elsevier Publishers.

Gabaix, X. and A. Landier, 2008, Why Has CEO Pay Increased So Much? Quarterly Journal of Economics, 123, 49-100.

Tervio, M., 2008, The Difference that CEOs Make: An Assignment Model Approach,” American Economic Review, 98(3), 642-668.

Benabou, R. and J. Tirole, 2016, Bonus Culture: Competitive Pay, Screening and Multitasking, Journal of Political Economy, 124(2), 305-370.

Managers Incentives - Corporate Decisions & Risk-taking

Dou, Y., R. Masulis and J. Zein, 2019, Shareholder Wealth Consequence of Insider Pledging of Company Stock as Collateral for Personal Loans, Review of Financial Studies, 32(12), 4810-4854.

Benmelech, E., E. Kandel and P. Veronesi, 2010, Stock based compensation and CEO (Dis) Incentives, Quarterly Journal of Economics, 125, 1769-1820.

Daniel, N., Y. Lib and L. Naveen, 2020, Symmetry in Pay for Luck, Review of Financial Studies forthcoming.

Edmans, A. and X. Gabaix, 2011, Tractability in Incentive Contracting, Review of Financial Studies, 24(9), 2865-2894.

Gormley, T. and D. Matsa, 2016, Playing It Safe? Managerial Preferences, Risk, and Agency Conflicts, Journal of Financial Economics, 122 (3), 431-455.

Gormley, T., D. Matsa and T. Milbourn, 2013, CEO Compensation and Corporate Risk-Taking: Evidence from a Natural Experiment", Journal of Accounting and Economics, 56, 79-101.

Low, A., 2009, Managerial Risk-taking Behavior and Equity-based Compensation, Journal of Financial Economics, 92, 470-490.

Morck, R., A. Shleifer and R. Vishny, 1988, Managerial Ownership and Market Valuation: An Empirical Analysis, Journal of Financial Economics, 20, 293-315.

Other Primarily Recent Research

*Banerjee, S., R. Masulis and A. Upadhyay, July 2020, Mitigating Effects of Gender Diverse Boards in Companies with Aggressive Management, SSRN working paper.

Masulis, R. and S. Reza, 2015, Agency Problems of Corporate Philanthropy, Review of Financial Studies, 28(2), 592-636.

Masulis, R. and S. Reza, August 2020, Private Benefits and Corporate Investment: The Case of Corporate Philanthropy, UNSW working paper.

Liu, C.Y., R. Masulis and J. Stanfield, July 2020, CEO Option Compensation Can Be a Bad Option: Evidence from Product Market Relationships, UNSW working paper.

*Islam, M. E., R. Masulis and L. Rahman, July 2020, Mobility Restrictions and Risk-Related Agency Conflicts: Evidence from a Quasi-Natural Experiment. SSRN working paper.

Liu, C. Y., R. Masulis and J. Stanfield, July 2020, CEO Option Compensation Can Be a Bad Option: Evidence from Product Market Relationships, SSRN working paper.

Masulis, R. and S. Mobbs, July 2020, Independent Director Reputation Incentives: CEO Compensation Contracts and Financial Accounting Quality, UNSW working paper.

*Islam, E., L. Rahman, R. Sen and J. Zein, 2020. Eyes on the Prize: Do Industry Tournament Incentives Shape the Structure of Executive Compensation? SSRN working paper.

Adams, R., H. Almeida and D. Ferreira, 2005, Powerful CEOs and Their Impact on Corporate Performance, Review of Financial Studies, 18(4), 1403-1432.

Anton, M., F. Ederer, M. Gine, and M. Schmalz, 2019, Common Ownership, Competition, and Top Management Incentives, SSRN working paper.

Armstrong, C. J. Core and W. Guay, 2016, Why Do CEOs Hold So Much Unconstrained Equity? MIT Working Paper.

Armstrong, C., D. Larcker, G. Ormazabal, and D. Taylor, 2013, The Relation Between Equity Incentives and Misreporting: The Role of Risk-taking Incentives, Journal of Financial Economics, 109(2), 327-350.

Babenko, I. and R. Sen, 2016, Do Non-Executive Employees Have Information? Evidence from Employee Stock Purchase Plans, Management Science, 62(7), 1878-1898.

Benmelech, E. and C. Frydman, 2015, Military CEOs. Journal of Financial Economics, 117(1), 43-59.

Bennedsen, M., F. Pérez‐González and D. Wolfenzon, 2020, Do CEOs Matter? Evidence from Hospitalization Events, The Journal of Finance, 75(4), 1877–1911.

Bennett, B., R. Stulz and Z. Wang, 2020, Does the Stock Market Make Firms More Productive? Journal of Financial Economics, 136(2), 281–306.

Bernile, G., V. Bhagwat and R. Rau, 2017, What Doesn't Kill You Will Only Make You More Risk-loving: Early-life Disasters and CEO Behaviour, Journal of Finance, 72(1), 167–206.

Bertrand, M., and S. Mullainathan, 2001, Are CEOs Rewarded for Luck? The Ones without Principals Are, Quarterly Journal of Economics, 116, 901-932.

Bettis, C., J. Bizjak, J. Coles and S. Kalpathy, 2018, Performance-Vesting Provisions in Executive Compensation, Journal of Accounting and Economics, 66, 194-221.

Bettis, C., J. Bizjak and S. Kalpathy, 2015, Why Do Insiders Hedge their Ownership? An Empirical Examination, Financial Management, 44(3), 655-683.

Bizjak, J., S. Kalpathy, and V. Mihov, 2018, Performance Contingencies in CEO Equity Awards and Debt Contracting, Accounting Review, 94(5), 57-82.

Boone, A., A. Starkweather and J. White, 2020, Spinning the CEO Pay Ratio Disclosure, Vanderbilt University working paper.

*Borgschulte, M., M. Guenzel, C. Liu and U. Malmendier, 2020, CEO Stress, Aging, and Death. University of Illinois, Urbana-Champaign working paper.

Bereskin, F., T. Campbell and S. Kedia, 2020, Whistle Blowing, Forced CEO Turnover, and Misconduct: The Role of Socially Minded Employees and Directors, Management Science, 66(1), 24–42.

Butler, A. and U. Gurun, 2012, Educational Networks, Mutual Fund Voting Patterns, and CEO Compensation, Review of Financial Studies, 25(8), 2533-2562.

Chattopadhyay, A., M. D. Shaffer and C. C. Y. Wang, 2020, Governance Through Shame and Aspiration: Index Creation and Corporate Behavior, Journal of Financial Economics, 135(3), 704–724.

Chen, G., C. Crossland and S. Huang, 2020, That Could Have Been Me: Director Deaths, CEO Mortality Salience, and Corporate Prosocial Behavior, Management Science, 66(7), 3142–3161.

Chen, M. D. Greene and J. Owers, 2020, The Costs and Benefits of Clawback Provisions in CEO Compensation, Review of Corporate Finance Studies, forthcoming.

Chen, Z. and R. Duchin, 2019, Do Nonfinancial Firms Use Financial Assets to Take Risk? SSRN working paper.

Chu, J., J. Faasse and R. Rau, 2018, Do Compensation Consultants Enable Higher CEO Pay? A Disclosure Rule Change as a Separating Device, Management Science, 64(10), 4471-4965.

*Cline, B. N., R. A. Walkling and A. S. Yore, 2018, The Consequences of Managerial Indiscretions: Sex, Lies, and Firm Value. Journal of Financial Economics, 127(2), 389–415.

Coles, J., Z. Li and Y. Wang, 2018, Industry Tournament Incentives, Review of Financial Studies, 31(4), 1418–1459.

Coles, J., and Z. Li, 2020, Managerial Attributes, Incentives, and Performance, Review of Corporate Finance Studies, forthcoming.

Core, J.E., R.W. Holthausen, and D.F. Larcker, 1999, Corporate Governance, Chief Executive Officer Compensation, and Firm Performance, Journal of Financial Economics, 51(3), 371-406

Cronqvist, H., A. Makhija, S. Yonker, 2012, Behavioral Consistency in Corporate Finance: CEO Personal and Corporate Leverage, Journal of Financial Economics, 103, 20-40.

Cunat, V., M. Gine and M. Guadalupe, 2016, Say Pays! Shareholder Voice and Firm Performance, Review of Finance, 20(5), 1799-1834.

Custódio, C., M. Ferreira, P. Matos, 2013, Generalists Versus Specialists: Lifetime Work Experience and Chief Executive Officer Pay, Journal of Financial Economics, 108, 471-492.

Dasgupta, S., A. Wang and X. Li, 2017, Product Market Competition Shocks, Firm Performance, and Forced CEO Turnover, Review of Financial Studies, 31(11), 4187-4231.

Davidson, R., A. Dey, A., Smith, 2015, Executives’ “off-the-job” Behavior, Corporate Culture, and Financial Reporting Risk, Journal of Financial Economics, 117(1), 5-28.

Deng, X. and H. Gao, 2013, Nonmonetary Benefits, Quality of Life and Executive Compensation, Journal of Financial and Quantitative Analysis, 48(1), 197-218.

Denis, D. K., T. Jochem and A. Rajamani, 2020, Shareholder Governance and CEO Compensation: The Peer Effects of Say on Pay, The Review of Financial Studies, 33(7), 3130–3173.

Dicks, D. L. and P. Fulghieri, 2019, Uncertainty and Contracting: A Theory of Consensus and Envy in Organizations. Kenan Institute of Private Enterprise Research Paper and CEPR working paper.

Du, F. 2018, From Playground to Boardroom, Endowed Social Status and Managerial Performance, Arizona State University working paper.

Edmans, A., P. Chaigneau and D. Gottlieb, 2018, Does Improved Information Improve Incentives? Journal of Financial Economics, 130(2), 291-307.

Edmans, A., V.W. Fang and A. Hung, 2020, The Long-term Consequences of Short-term Incentives, ECGI Working Paper.

Edmans, A., V. Fong and K. Lewellen, 2017, Equity Vesting and Investment, Review of Financial Studies, 30(7), 2229-2271.

Edmans, A., L. Goncalves-Pinto, M. Groen-Xu, and Y. Wang, 2018, Strategic News Releases in Equity Vesting Months, Review of Financial Studies, 31(11), 4099-4141.

Ellul, A., C. Wang and K. Zhang, 2017, Labor Unemployment Risk and CEO Incentive Compensation, University of Indiana Working Paper.

Engelberg, J., P. Gao and C. Parsons, 2013, The Price of a CEO Rolodex, Review of Financial Studies, 26(1), 79-114.

*Ewens, M., R. Nanda and C. Stanton, 2020, The Evolution of CEO Compensation in Venture Capital Backed Startups, SSRN working paper.

Falato, A., D. Li and T. Milbourn, 2015, Which Skills Matter in the Market for CEOs? Evidence from Pay for CEO Credentials, Management Science, 61(12), 2845-2869.

Fee, C., C. Hadlock, J. Pierce, 2013, Managers With and Without Style: Evidence Using Exogenous Variation, Review of Financial Studies, 26, 567-601

Focke, F., E. Maug, and A. Niessen-Ruenzi, 2017, The Impact of Firm Prestige on Executive Compensation, Journal of Financial Economics, 123(2), 313-336.

Frattaroli, M., 2020, Does Protectionist Anti-Takeover Legislation Lead to Managerial Entrenchment? Journal of Financial Economics, 136(1), 106–136.

Gabaix, X., A. Landier and J. Sauvagnet, 2014, CEO Pay and Firm Size: An Update after the Crisis, The Economic Journal, 124(574), F40-F59.

Gagnon, L., and A. Jenneret, 2019, Does Corporate Governance Impact Equity Volatility?  Theory and Worldwide Evidence, HEC Montreal working paper.

*Gilje, E., T. Gormley and D. Levit, 2020, Who’s Paying Attention?  Measuring Common Ownership and its Impact on Managerial Incentives, Journal of Financial Economics, 137(1), 152-178.

Gillan, S. L., J.C. Hartzell, A. Koch, A., & L. T. Starks, 2017, Getting the Incentives Right: Backfilling and Biases in Executive Compensation Data, Review of Financial Studies, 31(4), 1460-1498.

Gopalan, R., T. Milbourn, F. Song, and A. Thakor, 2014, Duration of Executive Compensation, Journal of Finance, 69(6), 2777–2817.

Graham, J., C. Harvey and M. Puri, 2016, A Corporate Beauty Contest, Management Science, 63(9), 3044-3056.

*Graham, J., D. Kim and H. Kim, 2019, Executive Mobility in the United States, 1920 to 2011, Duke working paper.

*Graham, J., D. Kim and M. Leary, 2020, CEO-Board Dynamics, Journal of Financial Economics, 137(3), 612-636.

Gryglewicz, S., S. Mayer and E. Morellec, 2020, Agency Conflicts and Short- Versus Long-Termism in Corporate Policies, Journal of Financial Economics, 136(3), 718–742.

*Guay, W., J. Kepler and D. Tsui, 2019, The Role of Executive Cash Bonuses in Providing Individual and Team Incentives, Journal of Financial Economics 133, 441-471.

Harford, J. and R. Schonlau, 2013, Does the Director Labor Market Offer Ex Post Settling-Up for CEOs? The Case of Acquisitions, Journal of Financial Economics, 110(1), 18-36.

Hayes, R., M. Lemmon and M. Qiu, 2012, Stock Options and Managerial Incentives for Risk Taking: Evidence from FAS 123R, Journal of Financial Economics, 105, 174-190.

Hermalin, B. and M. Weisbach Understanding Corporate Governance Through Learning Models of Managerial Competence, Asia-Pacific Journal of Financial Studies, 48, 7-29.

Hoitash, U. and A. Mkrtchyan, 2018, Recruiting the CEO from the Board: Determinants and Consequences, Journal of Financial and Quantitative Analysis, 53, 1261-1295.

Hu, S., 2019, Learning about the Details in CEO Compensation, Baylor University working paper.

Jayaraman, S. and T. Milbourn, 2015, CEO Equity Incentives and Financial Misreporting: The Role of Auditor Expertise, The Accounting Review, 90(1), 321-350.

Jayaraman, S. and T. Milbourn, 2012, The Role of Stock Liquidity in Executive Compensation, The Accounting Review, 87(2), 537-564.

Jenter, D., and F. Kanaan, 2015, CEO Turnover and Relative Performance Evaluation, Journal of Finance, 70(5), 2155–2184.

Kale, J., H. Ryan and L. Wang, 2020, Outside Employment Opportunities, Employee Productivity, and Debt Disciplining, Journal of Corporate Finance, forthcoming.

Kaplan, S., M. Klebanov and M. Sorensen, 2012, Which CEO Characteristics and Abilities Matter? Journal of Finance, 67, 973-1007.

Kolasinski, A. and X. Li, 2013, Can Strong Boards and Trading Their Own Firm’s Stock Help CEOs Make Better Decisions? Evidence from Acquisitions by Overconfident CEOs, Journal of Financial and Quantitative Analysis, 48(4), 1173-1206.

Ladika, T. and Z. Sautner, 2020, Managerial Short-Termism and Investment: Evidence from Accelerated Option Vesting, Review of Finance, 24(2), 305–344.

Lie, E. and K. Yang, January 2018, Import Penetration and Executive Compensation, University of Iowa working paper.

Lui, P. and Y. Xuan, 2019, The Contract Year Phenomenon in the Corner Office: An Analysis of Firm Behavior during CEO Contract Renewals, SSRN working paper.

Ma, P., J. Shin, and C. Wang, September 2019, rTSR: When Do Relative Performance Metrics Capture Relative Performance? Working paper, Harvard Business School.

Minnick,K. L., Burns, N., Starks, 2017, CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences and Consequences, Journal of Financial and Quantitative Analysis, 52(2), 519-551.

Morse, A., V. Nanda and A. Seru, 2011, Are Incentive Contracts Rigged by Powerful CEOs? Journal of Finance, 66, 1779-1821.

Na, K., 2020, CEOs’ Outside Opportunities and Relative Performance Evaluation: Evidence from A Natural Experiment, Journal of Financial Economics, 137(3), 679–700.

Nili, Y., Successor CEOs, 2019, Boston University Law Review 99, 787.

Pan, Y., S. Siegel and T. Y. Wang, 2020, The Cultural Origin of CEOs’ Attitudes toward Uncertainty: Evidence from Corporate Acquisitions, The Review of Financial Studies, 33(7), 2977–3030.

Pan, Y., T. Y. Wang, and M. S. Weisbach, 2016, CEO Investment Cycles, Review of Financial Studies, 29, 2955-2999.

Pan, Y., T. Y. Wang, and M. S. Weisbach. 2015. Learning About CEO Ability and Stock Return Volatility, Review of Financial Studies, 28(6), 1623-1666.

Peters, F. and A. Wagner, 2014, The Executive Turnover Risk Premium, Journal of Finance 69 (4), 1529-1563.

Sen, R. and R. Tumarkin, 2016, Stocking Up: Executive Optimism and Share Retention, Journal of Financial Economics 118(2), 399-430.

Shue, K. 2013, Executive networks and firm policies: evidence from the random assignment of MBA peers, Review of Financial Studies 26, 1401-1442.

Shue, K., and R. Townsend, 2017, How do quasi-random option grants affect CEO risk-taking? Journal of Finance, 72, 2551-2588.

Shue, K., and R. Townsend, 2016, Growth through Rigidity: Understanding Recent Trends in Executive Compensation, Journal of Financial Economics, 123(1), 1-21.

Smith G. and P. Swan, 2014, Concentrated Institutional Investor Really Reduce Executive Compensation While Raising Incentives? Critical Finance Review, 3, 49-83.

Tchistyi, A., D. Yermack and H. Yun, 2011, Negative Hedging: Performance Sensitive Debt and CEOs’ Equity Incentives, Journal of Financial and Quantitative Analysis, 46(3) 657-686.

Wei, C. and D. Yermack, 2011, Investor Reactions to CEOs’ Inside Debt Incentives, Review of Financial Studies, 24, 3813-3840.

Business Groups (1 week)

Ang, A., R. Masulis, P. Pham, and J. Zein, August 2020, Internal Capital Markets in Family Business Groups around the 2008 Global Financial Crisis, SSRN working paper.

Bubchuk,D., B. Larrain, M. Prem and F. Infante, 2020, How Do Internal Capital Markets Work? Evidence from the Great Recession, Review of Finance forthcoming.

Faccio, M. and W. O’Brien, February 2020, Business Groups and Employment, ECGI working paper.

Fried, J. M. and H. Spamann, 2020, Cheap-Stock Tunneling Around Preemptive Rights, Journal of Financial Economics, 137(2), 353–370.

Kang, J.-K. and J. Kim, 2020, Do Family Firms Invest More than Nonfamily Firms in Employee-Friendly Policies? Management Science, 66(3), 1300–1324.

Li, Z., H. Ryan and L. Wang, 2017, Pay for Outsiders: Compensation Incentives for Nonfamily Executives in Family Firms, SSRN Working Paper.

Santiono, R., F. Schiantarelli and P. Strahan, 2020, Internal Capital Markets in Times of Crisis. The Benefit of Group Affiliation, Review of Finance forthcoming.

6. Course Evaluation & Development

Feedback is regularly sought from students and continual improvements are made based on this feedback. At the end of this course, you will be asked to complete the myExperience survey, which provides a key source of student evaluative feedback. Your input into this quality enhancement process is extremely valuable in assisting us to meet the needs of our students and provide an effective and enriching learning experience. The results of all surveys are carefully considered and do lead to action towards enhancing educational quality.

The current course format is influenced by versions of this course taught in previous years. In previous years, negative comments generally related to the quantity of reading material, and the need to give students more hands-on practices.

Positive comments on undertaking a group project were noted, as were comments that suggested a less 'academic' research project. This encouraged the move toward a case study and pitch-book mode of assessment as well as the inclusion of the M&A simulation game. [These comments pertain to the M&A course where I am responsible for some lectures.]

7. Course Schedule

Note: for more information on the UNSW academic calendar and key dates including study period, exam, supplementary exam and result release, please visit:
Week Activity Topic Assessment/Other
Week 1: 15 SeptemberLecture

Overview of Corporate Governance Mechanisms and Agency Theory

Class Participation

Week 2: 22 SeptemberLecture

Endogeneity & Natural Experiments

Class Discussion

Week 3: 29 SeptemberLecture

Matching Methods & Diff-in-Diff

Class Discussion

Week 4: 06 OctoberLecture

Panel Regression & Discontinuity Design Regression (DDR)


Class Discussion HW Assignment

Week 5: 13 OctoberLecture

Corporation Political Ties and Social Responsibility


Presentations/ Critiques and Class Discussion

Week 6: 20 OctoberCritiques of Articles

Market for Corporate Control

Boards of Directors - Recent Literature

Presentations/ Critiques and Class Discussion

Week 7: 27 OctoberCritiques of Articles

Boards of Directors I

Presentations/ Critiques and Class Discussion

Week 8: 03 NovemberLecture

Boards of Directors II



Presentations/ Critiques and Class Discussion

Week 9: 10 NovemberCritiques of Articles

CEO Incentives - I

Presentations/ Critiques and Class Discussion

Week 10: 17 NovemberCritiques of Articles

CEO Incentives - II

Presentations/ Critiques and Class Discussion

Week 11: 15 September I-LabiLab: Practice Accessing Databases

Corporate Governance Databases

Class Participation & Practice Assignment

Week 12: 21 September I-LabiLab: Practice Accessing Databases

Corporate Governance Databases (continued)

Class Participation & Practice Assignment

8. Policies and Support

Information about UNSW Business School protocols, University policies, student responsibilities and education quality and support.

Program Learning Outcomes

The Business School places knowledge and capabilities at the core of its curriculum via seven Program Learning Outcomes (PLOs). These PLOs are systematically embedded and developed across the duration of all coursework programs in the Business School.

PLOs embody the knowledge, skills and capabilities that are taught, practised and assessed within each Business School program. They articulate what you should know and be able to do upon successful completion of your degree.

Upon graduation, you should have a high level of specialised business knowledge and capacity for responsible business thinking, underpinned by ethical professional practice. You should be able to harness, manage and communicate business information effectively and work collaboratively with others. You should be an experienced problem-solver and critical thinker, with a global perspective, cultural competence and the potential for innovative leadership.

All UNSW programs and courses are designed to assess the attainment of program and/or course level learning outcomes, as required by the UNSW Assessment Design Procedure. It is important that you become familiar with the Business School PLOs, as they constitute the framework which informs and shapes the components and assessments of the courses within your program of study.

PLO 1: Business knowledge

Students will make informed and effective selection and application of knowledge in a discipline or profession, in the contexts of local and global business.

PLO 2: Problem solving

Students will define and address business problems, and propose effective evidence-based solutions, through the application of rigorous analysis and critical thinking.

PLO 3: Business communication

Students will harness, manage and communicate business information effectively using multiple forms of communication across different channels.

PLO 4: Teamwork

Students will interact and collaborate effectively with others to achieve a common business purpose or fulfil a common business project, and reflect critically on the process and the outcomes.

PLO 5: Responsible business practice

Students will develop and be committed to responsible business thinking and approaches, which are underpinned by ethical professional practice and sustainability considerations.

PLO 6: Global and cultural competence

Students will be aware of business systems in the wider world and actively committed to recognise and respect the cultural norms, beliefs and values of others, and will apply this knowledge to interact, communicate and work effectively in diverse environments.

PLO 7: Leadership development

Students will develop the capacity to take initiative, encourage forward thinking and bring about innovation, while effectively influencing others to achieve desired results.

These PLOs relate to undergraduate and postgraduate coursework programs.  Separate PLOs for honours and postgraduate research programs are included under 'Related Documents'.

Business School course outlines provide detailed information for students on how the course learning outcomes, learning activities, and assessment/s contribute to the development of Program Learning Outcomes.



UNSW Graduate Capabilities

The Business School PLOs also incorporate UNSW graduate capabilities, a set of generic abilities and skills that all students are expected to achieve by graduation. These capabilities articulate the University’s institutional values, as well as future employer expectations.

UNSW Graduate CapabilitiesBusiness School PLOs
Scholars capable of independent and collaborative enquiry, rigorous in their analysis, critique and reflection, and able to innovate by applying their knowledge and skills to the solution of novel as well as routine problems.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 7: Leadership development

Entrepreneurial leaders capable of initiating and embracing innovation and change, as well as engaging and enabling others to contribute to change
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 6: Global and cultural competence
  • PLO 7: Leadership development

Professionals capable of ethical, self-directed practice and independent lifelong learning
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 5: Responsible business practice

Global citizens who are culturally adept and capable of respecting diversity and acting in a socially just and responsible way.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 5: Responsible business practice
  • PLO 6: Global and cultural competence

While our programs are designed to provide coverage of all PLOs and graduate capabilities, they also provide you with a great deal of choice and flexibility.  The Business School strongly advises you to choose a range of courses that assist your development against the seven PLOs and four graduate capabilities, and to keep a record of your achievements as part of your portfolio. You can use a portfolio as evidence in employment applications as well as a reference for work or further study. For support with selecting your courses contact the UNSW Business School Student Centre.

Academic Integrity and Plagiarism

Academic Integrity is honest and responsible scholarship. This form of ethical scholarship is highly valued at UNSW. Terms like Academic Integrity, misconduct, referencing, conventions, plagiarism, academic practices, citations and evidence based learning are all considered basic concepts that successful university students understand. Learning how to communicate original ideas, refer sources, work independently, and report results accurately and honestly are skills that you will be able to carry beyond your studies.

The definition of academic misconduct is broad. It covers practices such as cheating, copying and using another person’s work without appropriate acknowledgement. Incidents of academic misconduct may have serious consequences for students.


UNSW regards plagiarism as a form of academic misconduct. UNSW has very strict rules regarding plagiarism. Plagiarism at UNSW is using the words or ideas of others and passing them off as your own. All Schools in the Business School have a Student Ethics Officer who will investigate incidents of plagiarism and may result in a student’s name being placed on the Plagiarism and Student Misconduct Registers.

Below are examples of plagiarism including self-plagiarism:

Copying: Using the same or very similar words to the original text or idea without acknowledging the source or using quotation marks. This includes copying materials, ideas or concepts from a book, article, report or other written document, presentation, composition, artwork, design, drawing, circuitry, computer program or software, website, internet, other electronic resource, or another person's assignment, without appropriate acknowledgement of authorship.

Inappropriate Paraphrasing: Changing a few words and phrases while mostly retaining the original structure and/or progression of ideas of the original, and information without acknowledgement. This also applies in presentations where someone paraphrases another’s ideas or words without credit and to piecing together quotes and paraphrases into a new whole, without appropriate referencing.

Collusion: Presenting work as independent work when it has been produced in whole or part in collusion with other people. Collusion includes:

  • Students providing their work to another student before the due date, or for the purpose of them plagiarising at any time
  • Paying another person to perform an academic task and passing it off as your own
  • Stealing or acquiring another person’s academic work and copying it
  • Offering to complete another person’s work or seeking payment for completing academic work

Collusion should not be confused with academic collaboration (i.e., shared contribution towards a group task).

Inappropriate Citation: Citing sources which have not been read, without acknowledging the 'secondary' source from which knowledge of them has been obtained.

Self-Plagiarism: ‘Self-plagiarism’ occurs where an author republishes their own previously written work and presents it as new findings without referencing the earlier work, either in its entirety or partially. Self-plagiarism is also referred to as 'recycling', 'duplication', or 'multiple submissions of research findings' without disclosure. In the student context, self-plagiarism includes re-using parts of, or all of, a body of work that has already been submitted for assessment without proper citation.

To see if you understand plagiarism, do this short quiz:


The University also regards cheating as a form of academic misconduct. Cheating is knowingly submitting the work of others as their own and includes contract cheating (work produced by an external agent or third party that is submitted under the pretences of being a student’s original piece of work). Cheating is not acceptable at UNSW.

If you need to revise or clarify any terms associated with academic integrity you should explore the 'Working with Academic Integrity' self-paced lessons available at:

For UNSW policies, penalties, and information to help you avoid plagiarism see: as well as the guidelines in the online ELISE tutorials for all new UNSW students: For information on student conduct see:

For information on how to acknowledge your sources and reference correctly, see: If you are unsure what referencing style to use in this course, you should ask the lecturer in charge.

Student Responsibilities and Conduct

​Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed.

Information and policies on these topics can be found on the 'Managing your Program' website.


It is expected that you will spend at least ten to twelve hours per week studying for a course except for Summer Term courses which have a minimum weekly workload of twenty to twenty four hours. This time should be made up of reading, research, working on exercises and problems, online activities and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities.

We strongly encourage you to connect with your Moodle course websites in the first week of semester. Local and international research indicates that students who engage early and often with their course website are more likely to pass their course.

View more information on expected workload


Your regular and punctual attendance at lectures and seminars or in online learning activities is expected in this course. The Business School reserves the right to refuse final assessment to those students who attend less than 80% of scheduled classes where attendance and participation is required as part of the learning process (e.g., tutorials, flipped classroom sessions, seminars, labs, etc.).

View more information on attendance

General Conduct and Behaviour

You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class.

View more information on student conduct

Health and Safety

UNSW Policy requires each person to work safely and responsibly, in order to avoid personal injury and to protect the safety of others.

View more information on Health and Safety

Keeping Informed

You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university e-mail address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details.

Student Support and Resources

​The University and the Business School provide a wide range of support services and resources for students, including:

Business School EQS Consultation Program
The Consultation Program offers academic writing, literacy and numeracy consultations, study skills, exam preparation for Business students. Services include workshops, online resources, individual and group consultations. 
Level 1, Room 1035, Quadrangle Building.
02 9385 4508

Communication Resources
The Business School Communication and Academic Support programs provide online modules, communication workshops and additional online resources to assist you in developing your academic writing.

Business School Student Centre
The Business School Student Centre provides advice and direction on all aspects of admission, enrolment and graduation.
Level 1, Room 1028 in the Quadrangle Building
02 9385 3189

UNSW Learning & Careers Hub
The UNSW Learning & Careers Hub provides academic skills and careers support services—including workshops, individual consultations and a range of online resources—for all UNSW students. See their website for details.
Lower Ground Floor, North Wing Chancellery Building.
02 9385 2060

Student Support Advisors
Student Support Advisors work with all students to promote the development of skills needed to succeed at university, whilst also providing personal support throughout the process.
John Goodsell Building, Ground Floor.
02 9385 4734

International Student Support
The International Student Experience Unit (ISEU) is the first point of contact for international students. ISEU staff are always here to help with personalised advice and information about all aspects of university life and life in Australia.
Advisors can support you with your student visa, health and wellbeing, making friends, accommodation and academic performance.
02 9385 4734

Equitable Learning Services
Equitable Learning Services (formerly Disability Support Services) is a free and confidential service that provides practical support to ensure that your health condition doesn't adversely affect your studies. Register with the service to receive educational adjustments.
Ground Floor, John Goodsell Building.
02 9385 4734

UNSW Counselling and Psychological Services
Provides support and services if you need help with your personal life, getting your academic life back on track or just want to know how to stay safe, including free, confidential counselling.
Level 2, East Wing, Quadrangle Building.
02 9385 5418

Library services and facilities for students
The UNSW Library offers a range of collections, services and facilities both on-campus and online.
Main Library, F21.
02 9385 2650

Moodle eLearning Support
Moodle is the University’s learning management system. You should ensure that you log into Moodle regularly.
02 9385 3331

UNSW IT provides support and services for students such as password access, email services, wireless services and technical support.
UNSW Library Annexe (Ground floor).
02 9385 1333

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