Joan Farre-Mensa (NYU) on 'Why Are Most Firms Privately-held?' - Abstract: Even among large U.S. firms, most choose to remain private rather than listing on a stock market. I show that an important reason for this choice is public firms’ inability to disclose information selectively. This leads to a ‘two-audiences’ problem: Disclosure reduces information asymmetries among investors but also potentially benefits product-market competitors. Being public involves a trade-off between this...

Franklin Allen (Wharton School) - Slides for keynote address 'Stakeholder Capitalism, Corporate Governance and Firm Value'

Franklin Allen (Wharton School) - Keynote address on 'Stakeholder Capitalism, Corporate Governance and Firm Value' - Abstract: In countries such as Germany, the legal system ensures that firms are stakeholder-oriented. In others, like Japan, social norms achieve a similar effect. We analyze the advantages and disadvantages of stakeholder-oriented firms that are concerned with employees and suppliers compared to shareholder-oriented firms in a model of imperfect competition. Stakeholder...