Gary Gorton, Alexander Zentefis, 16 July 2020

Corporate culture is an important determinant of firm performance but has often been overlooked in economic research. This column presents a theory of the firm based on corporate culture. In firms, employees develop a product in house according to shared values, customs, and norms that each stem from a shared culture. Firms exist because, at times, corporate culture fulfils production more efficiently than detailed contracts would. Further, consistent with empirical evidence, this study shows how some mergers and acquisitions can fail and why corporate cultures are often hard to change once in place.

Lee Biggerstaff, David Cicero, Andy Puckett, 29 September 2013

Curbing corporate misbehaviour is a key policy goal but fixing the problem requires an understanding of what causes it. This column develops an innovative empirical approach that identifies unethical CEOs as an important cause of unethical corporation behaviour.

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