If you have 40 minutes and want to learn a great deal about finance, listen (and/or watch) Rene Stulz’s presidential address. He gave this at the 2005 AFA meetings in Philadelphia.
The basic theme of his speech is globalization. He points out that the world is not yet flat and the “impact of financial globabilization has been limited.” Why? “…because of the ‘twin agency problems’ that arise because rulers of sovereign states and corporate insiders pursue their own interests at the expense of outside investors. When these twin agency problems are significant, diffuse ownership is inefficient and corporate insiders must co-invest with other investors, retaining substantial equity. The resulting ownership concentration limits economic growth, financial development, and the ability of a country to take advantage of financial globalization.”
VERY interesting! [FinanceProfessor Annotation]
Author: M Stulz
Source: American Finance Association (AFA)
Subjects: Finance, International