In an interview with ProMarket, Fahmi Quadir, the short seller whose bet against Valeant in 2015 helped expose the company’s misdeeds, talks about short selling and its role in exposing corporate fraud.
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Is Market Price Relevant for Minority Shareholder Appraisal Actions?
Vice Chancellor Travis Laster of Delaware Chancery Court has recently cautioned that while courts have given greater deference to market price in appraising fair value, this approach does not elevate “market value” to the governing standard under Delaware’s appraisal statute. The Judge asked for further economic evidence and framework, and his caveat begs at least three questions, write Dirk Hackbarth and Bin Zhou.
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Does Uber Kill? The Real Cost of Ride-sharing
A new Stigler Center working paper finds that ride-sharing actually increases the number of new car registrations and fatal accidents.
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Does Finance Make Us Less Religious?
Do religious congregations provide informal insurance against the risk of income loss for their congregants? A new paper examines the impact of an expansion in crop insurance subsidies over three decades and finds that as crop insurance take-up increased, religious adherence fell off.
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How the Market Can Help Break the Glass Ceiling for Women in Management
A new CEPR working paper investigates how product market competition and gender-specific management career hurdles affect the gender wage gap for managers. The findings suggest that increased product market competition may not only boost the wages of female managers but also improve overall efficiency.
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Editors’ Briefing: This Week in Political Economy (August 11–18)
Elizabeth Warren’s new bill seeks to radically alter US corporate governance; America’s top CEOs earned 312 times more than their average workers last year; regulators are after Facebook for discriminatory housing ads; Elon Musk faces no more than a slap on the wrist from the SEC, experts say; and what is “the biggest policy mistake of the last decade”?
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Is Lionizing CEOs Dangerous for Society?
In an interview with ProMarket, Open University’s Peter Bloom talks about his provocative new book CEO Society and why he believes celebrating corporate CEOs too much erodes democratic values.
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The Foundation of Corporate Personhood: A Look at the Charles River Bridge Case of 1837
Some 130 years before Friedman could begin arguing that a corporation’s sole responsibility was to make a profit for its shareholders, Boston’s Charles River Bridge Company had to convince the Supreme Court that corporations were private entities whose interests could diverge from the public interest. While it lost that case, the partial success of the Charles River Bridge Company’s reasoning with the court laid the foundations for corporate personhood as it exists today.
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Depositors Disciplining Banks: The Impact of Scandals
Can depositor activism make a real difference? New research set to be presented at the upcoming Stigler Center Political Economy of Finance conference examines the Dakota Access Pipeline controversy and similar events and suggests that banks see significant decreases in deposit growth after experiencing environmental, corruption, and tax evasion scandals.
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Do Firms Use Capital and Labor Efficiently? Evidence and Implications of Resource Misallocation
Economists have for a decade or so theorized that moving productive inputs like labor and capital into the firms that make the best use of them is a prime engine of economic growth. But measuring how well this allocation is taking place across economies is a daunting empirical task. Nonetheless, a new Stigler Center working paper by Lenzu and Manaresi tries to do precisely that.
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Investing in Quality Early Childcare Is Good for Vulnerable Kids—and Good Economics, Too
Early childcare can be a major contributor to eliminating inequality of opportunity and even lay the foundations for a more productive workforce in the future.
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Do We Need to Mandate Firms’ Reporting And Auditing?
Back in the 1960s, George Stigler called into question whether states should require firms to publicly report their financials. A recent Stigler Center working paper revisits this issue and measures the impact of the different levels of financial reporting and auditing mandates around Europe on resource allocation.
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