The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World
Amar Bhidé

Many fear that Western prosperity is threatened by offshoring of R&D to China and India. But the author argues that a nation’s capacity to exploit cutting-edge research regardless of where it originates is the key to its economic competitiveness.

Whither Capitalism?
Stephen Roach

The global financial crisis has challenged faith in market-based capitalism. The author argues the real concern is not government intervention, but whether policymakers can scale back as recovery takes hold and learn from the failures of governance.

Financial Economists Roundtable Statement on Reforming the Role of the Rating “Agencies” in the Securitization Process

The collapse in prices of mortgage securities has undermined investor confidence in the process and reliability of the statistical ratings organizations. This statement recommends three kinds of reform to improve the incentives faced by SROs.

Brazil’s Experiment with Corporate Governance
Gonzalo Chavez and Ana Cristina Silva

In 2000, Brazil adopted specialized stock market listing segments to provide transparent and standard measures of corporate governance. Companies that voluntarily listed on these segments experienced an increase in value and liquidity of their shares.

Private Equity vs. PLC Boards in the U.K.:  A Comparison of Practices and Effectiveness
Viral Acharya, Conor Kehoe, and Michael Reyner

The authors examine, using in-depth interviews with 20 executives, how fundamental differences in the way boards function in the public and private realm are a key reason for improved operating performance achieved by the best PE firms.

Corporate Governance and Labor Relations
E. Han Kim

Maximizing shareholder value is often the single-minded objective for CEOs, but a balanced governance system that also seeks employee “participation” has the potential to increase an organization’s efficiency and value.

Does Board Independence Matter in Companies with a Controlling Shareholder?
Jay Dahya, Orlin Dimitrov, and John McConnell

In countries with weak legal protection of minority shareholders, controlling shareholders can raise firm value by appointing independent directors to the board. This is valuable for companies with growth options that must be funded with new equity. 

Designing a U.S. Market for CO₂
John  Parsons, Denny Ellerman, and Stephan Feilhauer

This article reviews the historical performance of the EU’s Emissions Trading System for CO₂ or the U.S. Acid Rain Program for SO₂, and what the implications are for a market for carbon in the U.S., with particular focus on the price efficiency of “cap-and-trade.”

Corporate Insurance and Debt:  The Case of China
Hong Zou and Mike Adams

Corporate purchases of property insurance can reduce the probability and cost of financial distress, and thus reduce borrowing costs, increase debt capacity and raise the firm value. Actions by a sample of Chinese companies supports this conjecture.

Thinking Like Adam Smith
Jerry Muller

This article provides a broad view of Adam Smith’s work beyond the focus on self-interest being a path to prosperity. Smith’s work is best seen as an attempt to design social institutions that harness “destructive passions” for the greatest public good.