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Articles 1 - 2 of 2
Full-Text Articles in Business
The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon
The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon
All Faculty Scholarship
We examine the “value” a PBC form provides for publicly-traded corporations. We analyze the structure of the PBC form and find that other than requiring a designated social purpose it does not differ significantly in siting control and direction with shareholders. We also examine the purpose statements in the charters of the most economically significant PBCs. We find that, independent of structural limitations on accountability, these purpose statements are, in most cases, too vague and aspirational to be legally significant, or even to serve as a reliable checks on PBC behavior. We theorize, and provide evidence, that without a legal …
Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky
Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky
All Faculty Scholarship
In 2019, for the first time in the history of U.S. capital markets, passive funds surpassed active funds in terms of total assets under management. The continuous growth of passive funds at the expense of active funds is a genuine cause for concern. Active funds monitor the management and partake of decision-making in their portfolio companies. Furthermore, they improve price efficiency and managerial performance by engaging in informed trading. The buy/sell decisions of active funds provide other market participants reliable information about the quality of firms. The cost of active investing is significant and it is exclusively borne by active …