Joseph McCahery

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• Doctor of Philosophy
• Professor at Tilburg University

In recent years, policymakers and researchers across various disciplines have focused on mapping the contours of the contemporary global value chain (GVC). This paper examines the value of networks and related concepts, such as network failures, as lenses through which the GVC can be better understood, particularly in addressing human rights and en...

Research Question/Issue We examine the effect of multiple environmental, social, and governance (ESG) scores on institutional investor ownership of firms and investor portfolio weightings. We are also the first to analyze the three individual components of ESG rankings to estimate the relative preferences of institutional investors. Research Findi...

We survey institutional investors to understand why they integrate environmental, social and governance (ESG) factors into their investment management processes. Using a unique data set, we find that limited partners (LPs) are motivated to incorporate ESG because they believe that ESG usage is more strongly correlated with financial performance. We...

The Oxford Handbook of Hedge Funds provides a comprehensive look at the hedge fund industry from a global perspective. The chapters are organized into five main parts. After the introductory chapter in Part I, Part II begins in Chapter 2 with an analysis of the main factors that have affected the operation of hedge funds. Chapter 3 explains the con...

The Oxford Handbook of Hedge Funds provides a comprehensive look at the hedge fund industry from a global perspective. The chapters are organized into five main parts. After the introductory chapter in Part I, Part II begins in Chapter 2 with an analysis of the main factors that have affected the operation of hedge funds. Chapter 3 explains the con...

In this article, we analyse the impact of business digitalisation on the principal-agent conflict. While there are several studies of impact of digitalization on corporate governance, the empirical evidence has so far been relatively scarce. We examine the principal-agent conflict from several angles: the number of shareholder-sponsored proposals s...

Coronavirus is the first global crisis of a digital age and the divergence in policy responses reflects the challenge of navigating an unprecedented global situation under conditions of enormous uncertainty. We ask what lessons can be learned from this experience and identify two, both of which push against mainstream interpretations of recent even...

While small and medium-sized enterprises (SMEs) are important for economic growth and employment, they face numerous obstacles in accessing external finance. In this article, we review recent developments in the availability of financing for SMEs in Brazil, focusing on the greater use of equity and debt for SMEs. In assessing the barriers to extern...

Loan tranching allows banks to manage risk and facilitate firm financing, which may be essential for firms that cannot access investors from stock markets. We analyze the determinants and benefits of loan tranching by pooling the tranches of individual loans to create the largest cross-country sample of syndicated loans, covering more than 150,000...

In a technology-driven, digital world, many of the largest and most successful businesses now operate as ‘platforms’. Such firms leverage networked technologies to facilitate economic exchange, transfer information, connect people, and make predictions. Platform companies are already disrupting multiple industries, including retail, hotels, taxis,...

This paper explores the issue of ‘re-making’ corporate law through the prism of the United Nations’ recent efforts at reducing legal obstacles experienced by micro-, small- and medium-sized enterprises in starting and scaling a business. In order to be fully successful, this paper suggests that the UN should go back to business fundamentals and sho...

We survey institutional investors to better understand their role in the corporate governance of firms. Consistent with a number of theories, we document widespread behind-the-scenes intervention as well as governance-motivated exit. These governance mechanisms are viewed as complementary devices, with intervention typically occurring prior to a po...

This paper explores the issue of “re-making” corporate law through the prism of the United Nations’ recent efforts at reducing legal obstacles experienced by micro, small and medium-sized enterprises in starting and scaling a business. In order to be successful, we recommend that the UN should go back to business fundamentals and should attempt to...

There is arguably a balance between exploration and exploitation within a commercial organization which leads to sustainable growth and value creation. Exploratory activities are associated with search, innovation, risk-taking and experimentation. Activities, such as selection, implementation and execution are considered exploitative in nature. We...

There are numerous studies on the effectiveness of boards that primarily focus on legal formalities, including gender diversity, board size, remuneration, board evaluation, and the role of the chairman of the board. While attempting to design a one-size-fits-all framework, scholars approaching board independence from an agency-cost perspective have...

Recent regulatory initiatives that attempt to encourage shareholder engagement, ensure board independence and improve the operation and transparency of corporate groups are of great interest to both academics and practitioners. These initiatives reflect a ‘one-size-fits-all’ approach that may lead to disappointing and counterproductive results and...

We conjecture that venture capitalists and their investors often fall prey to what is known as ‘collective conservatism.’ We investigate this conjecture by analyzing boilerplate provisions in limited partnership agreements. When investors accept suboptimal boilerplate provisions it is not because they believe that the standardized terms and conditi...

In this paper, we first shed light on the factors that underlie the differences between the ‘shareholder wealth maximization’ and the ‘long-term commitment’ models of corporate governance. By introducing a third type of governance model, we show that a three-dimensional approach provides a better understanding of the dynamics of corporate governanc...

More and more companies appear with strange abbreviations behind their business name. Consider Chrysler Group LLC (instead of Inc.) or LVMH Montres & Joaillerie France SAS. Some even speak about the 'endangered corporate form' and point to the rise of the uncorporation. This Primer examines how the uncorporation has evolved in the United States and...

One important effect of the sluggish IPO market is the focus on deregulation and the emergence of a new generation of securities markets. These deregulated markets are considered important to stimulate entrepreneurial activity and attract venture capital. This paper argues that the introduction of these new markets and accompanying deregulatory mea...

This paper examines recent trends in venture capital fundraising and investments. We find that the emergence of ‘new’ types of investors, such as crowdfunding platforms, super-angels and corporations, during this period may explain the changes in the venture capital model. Importantly, the new investment pattern emerges as a result of the increasin...

There are numerous studies on the effectiveness of boards that primarily focus on legal formalities, including gender diversity, board size, remuneration, board evaluation and the role of the chairman of the board. While attempting to design a one-size-fits-all framework, scholars approaching board independence from an agency cost perspective have...

This article examines the post-financial crisis trends in the private equity industry. Although most research has followed the pre-crisis trends, we show that investors are demanding the inclusion of more investor-favorable compensation terms in limited partnership agreements. Our findings suggest that these new terms not only provide the investors...

This article analyzes the importance of the rise of corporate venture capital and considers the role of government venture capital. It also studies the emergence of international industry clusters relative to regional clusters. Corporate venturing is on the resurgence as large corporations increasingly look to young entrepreneurial businesses for i...

During the last two decades corporate international diversification became a widely used growth strategy. However, the majority of scientific researches insist on its value-destroying pattern. Those of them which were based on accounting studies’ methodology and used current performance measures are likely to make an incomplete evaluation of corpor...

In this paper, we investigate the attitudes of institutional investors, such as hedge funds, insurance companies, mutual funds and pension funds, towards a key corporate governance mechanism, namely executive compensation. We document the preferences they have about both the level and structure of executive compensation. Our analysis takes a compar...

In this paper, we investigate the attitudes of institutional investors, such as hedge funds, insurance companies, mutual funds and pension funds, towards a key corporate governance mechanism, namely executive compensation. We document the preferences they have about both the level and structure of executive compensation. Our analysis takes a compar...

Does the Takeover Bids Directive need revision? The answer to this question will most likely affect the Commission's assessment of the Directive in 2011 and could initiate its revision. Proponents of such a revision urge the Commission to redress the shortcomings of the Directive's implementation in two ways: 1) revising the mandatory provisions of...

Investor confidence in financial markets depends in large part on the existence of an accurate disclosure and reporting regime that provides transparency in the beneficial ownership and control structures of publicly listed companies. Today, a common post-financial crisis regulatory reform theme is to tighten the disclosure and reporting rules that...

Law and Finance and Coasian theories posit different views about the use of tranching in financial contracts. We evaluate these competing theories using the differences in syndicated loans that use tranches to determine the factors that explain the extent of tranching and the range of tranche spreads. We use data comprising 115,296 loans from 115 c...

Institutional investors are a dominant force in financial markets today, yet their preferences about corporate governance are generally undisclosed and their activities in this area tend to be performed behind the scenes. We conduct a survey to elicit institutional investors’ views on investor protection and corporate governance. We find that among...

This Article offers a positive political economy of corporate federalism. It draws on the history of corporate law and basic concepts of evolutionary game theory to locate the content of corporate federalism in two stable equilibriums. The first equilibrium prevails in the charter market, following from Delaware's successful pursuit of an evolution...

In his book, 'Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do about It,' Harvard Business School Professor, Josh Lerner, explains that governments can only play a limited role in spurring innovation and entrepreneurship. Government initiatives are usually characterized by poo...

This article examines the existing contractual arrangements and industry standards in private equity. It shows that investors are, in principle, capable of structuring their particular investments according to their own preferences, there are a range of governance problems and risks that could be potentially hazardous for some classes of investors....

We examine the impact of lead arrangers' reputation on the design of loan contracts such as spread and fees charged. Controlling for the non-randomness of the lender–borrower match (self-selection bias), we find that the reputation of top tier arrangers leads to higher spreads, and that top tier arrangers retain larger fractions of their loans in t...

We use data comprising over 100,000 loans from 115 countries during 1995-2009 to examine factors that affect the extent of loan tranching, and the range of tranche spreads. The data show five factors that drive them: asymmetric information, borrower risk, transaction costs, the presence of institutional investors, and the legal system. Tranching is...

Does the Takeover Bids Directive need revision? The answer to this question will most likely affect the Commission’s assessment of the Directive in 2011 and could initiate its revision. Proponents of such a revision urge the Commission to redress the shortcomings of the Directive’s implementation in two ways: 1) revising the mandatory provisions of...

We examine the impact of lead arrangers’ reputation on the design of loan contracts such as spread and fees charged. Controlling for the non-randomness of the lender-borrower match (self-selection bias), we find that the reputation of top tier arrangers leads to higher spreads, and that top tier arrangers retain larger fractions of their loans in t...

We study private enforcement of corporate law in a civil law jurisdiction that has a relatively weak company law regime. First, we develop a benchmark for how effective the court is in resolving confl icts in a speedy and decisive manner. We base our findings on a hand-collected database of filings of legal actions brought against companies between...

The reform of bank supervision represents one of the great institutional challenges for the European Union. The recent pattern of cross-border failures in supervision reflects the extent to which a better functioning system of supervision is critical for the safe operation of the banking system in the EU. Within this framework, the main institution...

Introduction, As the recent wave of governance scandals and reforms has focused the public debate on how publicly held corporations should be structured and organized, it is hardly surprising that corporate governance of listed companies has captured the legal imagination. Books, articles and reports on the corporate governance of listed companies...

This article appears as Chapter One in Corporate Governance of Non-Listed Companies. The chapter evaluates the role of corporate law in formulating effective solutions to the core agency problems that arise in non-listed companies. We show how a range of legal strategies, which were originally designed for public companies but later adapted to clos...

Studies of corporate governance traditionally focus on the governance problems of large publicly held firms, and policymakers' recommendations often focus on such firms. However most small firms, and in many countries, even many large companies, are non-listed. This book provides a comprehensive account of non-listed businesses and their particular...