NOTE: We will make final revisions to this paper in July 2000, at which time we will make reference to all pertinent papers that have come to our attention by June 30, 2000. If anyone reading this survey knows of a pertinent paper not presently included in the list of references, please send a copy or a reference to one of us. *Djankov is Financial Economist at the World Bank. Murrell is Professor of Economics and Chair of the Academic Council of the IRIS Center, University of Maryland. We would like to thank Judy Hellerstein, John McMillan, John Nellis, and Jan Svejnar for helpful advice and Wooyoung Kim and Tatiana Nenova for research assistance. This research was made possible through support provided by the World Bank and by the U.S. Agency for International Development under Cooperative Agreement No. DHR-0015-A-00-0031-00 to the Center for Institutional Reform and the Informal Sector (IRIS). The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the IRIS Center, US AID, the World Bank, its Executive Directors, or the countries they represent. Enterprise Restructuring in Transition: A Quantitative Survey Abstract. There are now over 125 empirical papers that analyze the process of enterprise restructuring in transition

We survey two generations of research on corporate governance systems around the world, concentrating on countries other than the United States. The first generation of international corporate governance research is patterned after the US research that precedes it. These studies examine individual governance mechanisms – particularly board composition and equity ownership – in individual countries. The second generation of international corporate governance research recognizes the fundamental impact of differing legal systems on the structure and effectiveness of corporate governance and compares systems across countries. We would like to thank Orlin Dimitrov and David Offenberg for valuable research assistance. International Corporate Governance: A Survey I.

This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making, and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or an external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO’s first-born child. This is a plausible instrumental variable (IV) as male firstchild firms are more likely to pass on control to a family CEO relative to female first-child firms, but the gender of a first child is unlikely to affect firms ’ outcomes. We find that family successions have a large negative causal impact on firm performance: operating profitability on assets falls by at least four percentage points around CEO transitions. Our IV estimates are significantly larger than those obtained using ordinary least squares. Furthermore, we show that family-CEO underperformance is particularly large for firms in high-growth industries and for relatively large firms. Overall, the empirical results demonstrate that professional non-family CEOs provide extremely valuable services to the organizations they head.

The corporate finance structure in Thailand has not served the country as well as it could. Many corporates ’ financial structure was very fragile in 1997, which contributed to the depth and length of the financial crisis. In general, firms found themselves very exposed to the changes in economic environment following the financial crisis. Long term funds from local sources for every

conference on economic institutions and behavioral economics. This is a very rough working draft for the conference. The Mark Twain apology applies, we wish we had more time to write less. Comments are genuinely appreciated, especially on what to cut, and on important omissions (self-serving ones are expected). Ideas from the NBER Organizational Economics conference in March, 2004, particularly Bob Gibbons’s presentation, was useful, as were discussions with Chip Heath and Sendhil Mullainathan. 0 This essay is about how behavioral economics can be applied to organizations, and can also be enriched by thinking about how individuals behave in organizations. Behavioral economics modifies economic theory to account for normal limits on rational calculation, willpower and greed, and the natural psychophysical properties of preference and judgment (e.g. Mullainathan and Thaler, 2001; Camerer and Loewenstein, 2004). Thinking about organizations naturally extends this definition to include how socialization and identity shape individual behavior. (While little about these extensions will be discussed in this paper, see Akerlof and Kranton, 2003). From a methodological perspective, behavioral economics is simply a humble

this report were more modest: to take stock of progress in the region, highlight the factors shaping East Asia's future, and suggest broad directions of policies.

Abstract. Estimating the value of top managerial talent is a central topic of research that has attracted widespread attention from academics and practitioners. Yet, testing for the importance of chief executive officers (CEOs) on firm outcomes is challenging. In this paper we test for the impact of CEOs on performance by assessing the effect of (1) CEO deaths and (2) the death of CEOs ’ immediate family members (spouse, parents, children, etc). Using a unique dataset from Denmark, we find that CEO (but not board members’) own and family deaths are strongly correlated with declines in firm operating profitability, investment and sales growth. Our CEO shock-outcome analysis allows us to identify the personal shocks that are the most (least) meaningful for CEOs: the death of children and spouses (mothers-in-law). We show that individual CEO, firm and industry characteristics seem to affect the impact of these shocks. In particular, CEO effects are larger (lower) for longer-tenured (older) CEOs and for those managers with large investment fixed effects. CEO shocks are relevant across the size distribution of firms but are concentrated on those firms that invested heavily in the past. Lastly, we find that CEO shocks tend to be larger in rapid growth-, high investment- and R&D-intensive industries. Overall,

This paper tests whether education levels di¤er between leaders selected in autocracies and democracies. We use a unique data set on over 1300 world leaders between 1848 and 2004 and exploit within country variation from transitions to and from democracy to show that democracies pick more highly educated leaders. The results are robust to a wide range of speci…cations, controls and ways of measuring education and democracy. We are grateful to seminar participants at Oxford and CIFAR, UPF, LSE-UCL, Paris School of Economics, and Toulouse School of Economics for helpful feedback. We are also very grateful to Florencia Abiuso for excellent research assistance and to Anne Brockmeyer and Rohini Pande for helpful comments. Besley is grateful for funding from the ESRC and CIFAR. Reynal-Querol is grateful for funding from the European Research Council under the European Community’s Seventh Framework Programme (FP7/2007-2013)/ERC grant agreement n. 203576 and acknowledges the …nancial support of the grant SEJ2007-64340 from the Spanish Ministerio de Educación. Reynal-Querol also acknowledges the support of the Barcelona GSE Research Network and the Government of Catalonia. 1 1

Abstract: If CEOs have considerable power over their own compensation, then we expect them to avoid pay cuts following bad news about their ability, and win large pay raises following good news. Consistent with this view, I find that CEOs capture 60 to 93 % of the surplus resulting from good news, and they bear only 5 to 9 % of the negative surplus resulting from bad news. These estimates are from a model in which agents learn gradually about CEO ability, and CEOs ’ bargaining power determines how their compensation responds to news about ability. I estimate the model’s parameters by applying GMM and SMM to data on stock returns and changes in CEO pay. Since CEOs do not capture their full surplus, CEO ability matters more for shareholders, which is supported by predictions and data on unanticipated CEO deaths. The model helps explain the sensitivity of CEO pay to lagged stock returns, and also the changes in stock return volatility around CEO successions.

errors remain our own.