The State of U.S. Corporate Governance: What's Right and What's Wrong?

The U.S. corporate governance system has recently been heavily criticized, largely as a result of failures at Enron, WorldCom, Tyco and some other prominent companies. Those failures and criticisms, in turn, have served as catalysts for legislative change (Sarbanes-Oxley Act of 2002) and regulatory change (new governance guidelines from the NYSE and NASDAQ). In this paper, we consider two questions. First, is it clear that the U.S. system has performed that poorly; is it really that bad? Second, will the changes lead to an improved U.S. corporate governance system? We first note that the broad evidence is not consistent with a failed U.S. system. The U.S. economy and stock market have performed well both on an absolute basis and relative to other countries over the past two decades. And the U.S. stock market has continued to outperform other broad indices since the scandals broke. Our interpretation of the evidence is that while parts of the U.S. corporate governance system failed under the exceptional strain of the 1990s, the overall system, which includes oversight by the public and the government, reacted quickly to address the problems. We then consider the effects that the legislative, regulatory, and market responses are likely to have in the near future. Our assessment is that they are likely to make a good system better, though there is a danger of overreacting to extreme events.

The State of Corporate Governance 2004

The U.S. corporate governance system has recently been heavily criticized, largely as a result of failures at Enron, WorldCom, Tyco and some other prominent companies. Those failures and criticisms, in turn, have served as catalysts for legislative change (Sarbanes-Oxley Act of 2002) and regulatory change (new corporate governance listing standards from the NYSE and NASDAQ). In this paper, we consider two questions. First, is it clear that the U.S. system has performed that poorly; is it really that bad? Second, will the changes lead to an improved U.S. corporate governance system. We first note that the broad evidence is not consistent with a failed U.S. system. The U.S. economy and stock market have performed well both on an absolute basis and relative to other countries over the past two decades. And the U.S. stock market continued to outperform other broad indices after the scandals broke. Our interpretation of the evidence is that while parts of the U.S. corporate governance system failed under the exceptional strain of the 1990s, the overall system, which includes oversight by the public and the government, reacted quickly to address the problems. We then consider the effects that the legislative, regulatory, and market responses are likely to have in the near future. Our assessment is that they are likely to make a good system better, though there is a danger of overreacting to extreme events.Technology and Industry, Regulatory Reform

Search for the Lepton-Number-Violating Decay Ξ−→pμ−μ−\Xi^- \to p \mu^- \mu^-

A sensitive search for the lepton-number-violating decay $\Xi^-\to p \mu^-\mu^-$ has been performed using a sample of $\sim10^9$ $\Xi^-$ hyperons produced in 800 GeV/$c$ $p$-Cu collisions. We obtain $\mathcal{B}(\Xi^-\to p \mu^-\mu^-)< 4.0\times 10^{-8}$ at 90% confidence, improving on the best previous limit by four orders of magnitude.Comment: 9 pages, 5 figures, to be published in Phys. Rev. Let

Evidence for the Decay Sigma+ -> p mu+ mu-

We report the first evidence for the decay Sigma+ -> p mu+ mu- from data taken by the HyperCP experiment(E871) at Fermilab. Based on three observed events, the branching ratio is B(Sigma+ -> p,mu+,mu-) = [8.6 +6.6,-5.4(stat) +/-5.5(syst)] x 10**-8. The narrow range of dimuon masses may indicate that the decay proceeds via a neutral intermediate state, Sigma+ -> p P0, P0 -> mu+ mu-, with a P0 mass of 214.3 +/- 0.5 MeV/c**2 and branching ratio B(Sigma+ -> p P0; P0 -> mu+ mu-) = [3.1 +2.4,-1.(stat) +/-1.5(syst)] x 10**-8.Comment: As published in PR

Vertical integration and firm boundaries : the evidence

Since Ronald H. Coase's (1937) seminal paper, a rich set of theories has been developed that deal with firm boundaries in vertical or input–output structures. In the last twenty-five years, empirical evidence that can shed light on those theories also has been accumulating. We review the findings of empirical studies that have addressed two main interrelated questions: First, what types of transactions are best brought within the firm and, second, what are the consequences of vertical integration decisions for economic outcomes such as prices, quantities, investment, and profits. Throughout, we highlight areas of potential cross-fertilization and promising areas for future work

Measurement of the Alpha Asymmetry Parameter for the Omega- to Lambda K- Decay

We have measured the alpha parameter of the Omega- to Lambda K- decay using data collected with the HyperCP spectrometer during the 1997 fixed-target run at Fermilab. Analyzing a sample of 0.96 million Omega- to Lambda K^-, Lambda to p pi- decays, we obtain alpha_Omega*alpha_Lambda = [1.33+/-0.33(stat)+/-0.52(syst)] x 10^{-2}. With the accepted value of alpha_Lambda, alpha_Omega is found to be [2.07+/-0.51(stat)+/-0.81(syst)] x 10^{-2}.Comment: 5 pages, 4 figures, to be appeared as a Rapid Communication in Phys. Rev.

Search for a new gauge boson in the A′A' Experiment (APEX)

We present a search at Jefferson Laboratory for new forces mediated by sub-GeV vector bosons with weak coupling $\alpha'$ to electrons. Such a particle $A'$ can be produced in electron-nucleus fixed-target scattering and then decay to an $e^+e^-$ pair, producing a narrow resonance in the QED trident spectrum. Using APEX test run data, we searched in the mass range 175--250 MeV, found no evidence for an $A'\to e^+e^-$ reaction, and set an upper limit of $\alpha'/\alpha \simeq 10^{-6}$. Our findings demonstrate that fixed-target searches can explore a new, wide, and important range of masses and couplings for sub-GeV forces.Comment: 5 pages, 5 figures, references adde

Sources of pro-cyclicality in east Asian financial systems

Procyclicality is a normal feature of economic systems, but financial sector weaknesses can exacerbate it sufficiently to pose a threat to macroeconomic and financial stability. These include shortcomings in bank risk management and governance, in supervision and in terms of dependence on volatile sources of funds. The paper tests econometrically for the importance of such features leading to pro-cyclicality in the financial systems of 11 East Asian countries. This analysis makes it possible to identify specific policy measures for East Asian countries that could limit the extent to which financial systems exacerbate pro-cyclicality