Critical Finance Review

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Critical Finance Review

Print ISSN: 2164-5744
Online ISSN: 2164-5760


Ivo Welch
J Fred Weston Professor of Finance
Anderson School at UCLA
110 Westwood Plaza, C519
Los Angeles CA 90095-1481
Tel: +1 (310) 825-2508
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Volume 3, issue 1

Bank Deregulation and Racial Inequality in America

We use the cross-state, cross-time variation in bank deregulation across the U.S. states to assess how improvements in banking systems affected the labor market opportunities of black workers. Bank deregulation from the 1970s through the 1990s improved bank efficiency, lowered entry barriers facing
Volume 3, issue 1

Do Concentrated Institutional Investors Really Reduce Executive Compensation Whilst Raising Incentives?

Hartzell and Starks (HS) (2013) report that firms with more concentrated institutional investors pay executives less, and make this pay more sensitive to performance. In an extended data set covering 1992 to 2010, we find that institutional concentration has no such effects when we control for firm
Volume 3, issue 1

Institutional Investors and Executive Compensation Redux: A Comment on "Do Concentrated Institutional Investors Really Reduce Executive Compensation Whilst Raising Incentives"

Smith and Swan (2013), referred to as SS, question the robustness of the results of Hartzell and Starks (2003), referred to as HS. We discuss the fact that they have to make two significant and unwarranted changes to our model specifications in order to remove the significance of the HS results. Sim...
Volume 3, issue 1

Incentive Contracts are not Rigged by Powerful CEOs

Morse et al. (2011), henceforth MNS, interpret the data to suggest that more powerful CEOs ex post change their incentive contracts to put greater weight on performance measures that are ex-post more favorable. My paper points out a number of issues with their inference. First and most importantly,
Volume 3, issue 1

Compensation Rigging by Powerful CEOs: A Reply and Cross-Sectional Evidence

Wan (2013) argues that the statistical inferences in our Journal of Finance (2011) paper are not robust, as we do not prove that it is powerful CEOs that rig incentive contracts. Wan makes the theoretical claim that the rigging results are consistent with ex-post optimal re-contracting. However, opt...