Boards of directors play an important governance role in companies by monitoring executives and firm performance. But not all boards are alike. The boards of public firms are accountable to shareholders and offer a perspective removed from daily operations. Venture boards, on the other hand, are far more hands-on and have a different focus because their ... Read More

Accounting standards matter to investment both at the individual firm and market levels. When accounting standards improve, then the benefits should extend to all economic organizations and agents . But research by Guochang Zhang shows there may be winners and losers among individual firms even as the economic performance of the market as a whole ... Read More

Analysts and investors may agree to disagree on certain portfolio picks, but the nature of that disagreement and its interplay with the portfolio could, in itself, have implications for returns and asset prices. Previous research has already shown that greater disagreement is associated with higher prices and lower subsequent returns. Professor Jialin Yu ... Read More

Managers that want creative ideas and solutions from their teams should consider how their trust relationships with their staff may help or hinder employees in taking risks and suggesting new ways of doing things. That was a key recommendation in a study by Yaping Gong, Tae-Yeol Kim, Deog-Ro Lee and Jing Zhu on the conditions and factors that encourage ... Read More

The Sarbanes-Oxley Act (SOX) of 2002 was meant to strengthen corporate governance and financial reporting in the US in the wake of several corporate scandals. While it was intended to curb malfeasance and sustain investor confidence, it has also come under sharp criticism for the substantial costs it has created for issuers of equity. One group particularly ... Read More

In principle, most people understand that financial decisions hinge on balancing risk and returns over time. In practice, however, how do consumers weigh the pros and cons of a particular stock? How does one predict future price fluctuations? And accordingly, how does one decide when to buy, hold, or sell equities? Given their inexperience (41% of Americans ... Read More

Non-performing loans have been a widespread problem both in developed and developing countries. One of the most striking examples came from China, where they accounted for 35 per cent of state-owned bank loans in 1999. What is the best way to deal with such a problem? The conventional approach has been to focus on creditors and their inadequacies in such ... Read More

A New York Times article some time ago reported that people who could not drive were nonetheless purchasing cars. A survey of more than 2,500 British women found 63 per cent intentionally bought clothes that were too small for them. Why would people buy things they are unable to use? Marketing wisdom and common sense suggests they are optimists. Elaine Chan ... Read More

People who feel socially excluded are more willing to pursue riskier but potentially more profitable financial opportunities, whether they be in stocks, lotteries or financial products. That is the finding of Rod Duclos, Echo Wen Wan and Yuwei Jiang, who were able to connect that behavior to a higher perception of the instrumentality of money among those ... Read More

Family firms are dominant in much of the world, including the U.S. where they constitute 35.4 per cent of S&P 500 firms and 45.6 per cent of S&P 1500 firms. They are also a subject of growing academic interest but until now, there has been little investigation of their financing choices. Tai-Yuan Chen, Sudipto Dasgupta and Yangxin Yu saw in that surprising ... Read More