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22 U. Pa. J. Int'l Econ. L. 325 (2001)
Managerial Opportunism and Foreign Listing: Some Direct Evidence

handle is hein.journals/upjiel22 and id is 337 raw text is: MANAGERIAL OPPORTUNISM AND FOREIGN LISTING: SOME DIRECT EVIDENCE AMIR N. LICHT* 1. INTRODUCrION To what extent do private interests of managers, controlling shareholders, and other insiders affect corporate actions and the structure of the legal system? This Article presents evidence that such interests (hereinafter managerial opportunism, for brevity) have a significant effect on both aspects in the growingly important context of foreign listing. Modem analyses of the corporate form invariably revolve around the agency problem,' and corporate governance is widely understood today to constitute the means for coping with this problem.2 Shleifer and Vishny, for instance, provide a thor- ough review of the theoretical and empirical literature on the rela- tions between corporate governance and the agency problem.3 In particular, they discuss the interplay between legal rules and shareholding structures as alternative means for curbing adverse * Lecturer, Interdisciplinary Center Herzliya, Israel S.J.D., Harvard Law School; B.A. (Economics), Tel Aviv University; LLB., Tel Aviv University. For helpful comments I would like to thank Bernard Black, Haim Falk, Howell Jack- son, Nathan Joseph, Roberta Romano, Alan Schwartz, participants of the confer- ence Protecting Investors in the Global Economy, Tel Aviv University, June 27- 28, 2000, and the Journal's Editorial Team. The Author served as outside consult- ant during the later stages of the Israeli dual listing project The opinions ex- pressed here and errors are mine alone. All translations are by the author and verified by the University of Pennsylvania Journal of International Economic Law. 1 See Armen A. Alchian & Harold Demsetz, Production, Itformation Coss, and Economic Organization, 62 AML ECON. REv. 777 (1972); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ounership Structure, 3 J. FiN. EcoN. 305 (1976). 2 See Andrei Shleifer & Robert W. Vishny, A Survey of Corporate Governance, 52 J. FiN. 737,738 (1997). 3 Id. (Our perspective on corporate governance is a straightforward agency perspective.'.