Corporate Finance.

• Position: Program and Working Group Meetings

The NBER's Corporate Finance Program, met on November 21 in Cambridge. Organizers Holger Mueller, NBER and New York University, and Joshua Rauh, NBER and University of Chicago, chose these papers to discuss:

Martijn Cremers, Yale University, and Yaniv Grinstein, Cornell University, "The Market for CEO Talent: Implications for CEO Compensation"

Discussant: Xavier Gabaix, New York University and NBER

3. Fritz Foley, Harvard University and NBER; Dhammika Dharmapala, University of Connecticut; and Kristin Forbes, MIT and NBER, "The Unintended Consequences of the Homeland Investment Act: Implications for Financial Constraints, Governance, and International Tax Policy"

Discussant: Heitor Almeida, University of Illinois and NBER

Viral Acharya, New York University; Raghuram Rajan, University of Chicago and NBER, and Stewart C. Myers, MIT and NBER, "The Internal Governance of Firms"

Discussant: Jeremy C. Stein, Harvard University and NBER

Josh Lerner, Harvard University and NBER, and Ulrike Malmendier, University of California, Berkeley and NBER, "With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship"

Discussant: Simon Johnson, MIT and NBER

Philippe Aghion, Harvard University and NBER; John Van Reenen, London School of Economics and NBER; and Luigi Zingales, University of Chicago and NBER, "Innovation and Institutional Ownership"

Discussant: David S. Scharfstein, Harvard University and NBER

Todd Gormley, Washington University in St. Louis, and David Matsa, Northwestern University, "Growing Out of Trouble ? Legal Liability and Corporate Responses to Adversity"

Discussant: Antoinette Schoar, MIT and NBER

Gerard Hoberg, University of Maryland; and Gordon M. Phillips, University of Maryland and NBER, "Product Market Synergies and Competition in Mergers and Acquisitions"

Discussant: Paul Tetlock, Columbia University

Cremers and Grinstein study the market for CEO talent in public U.S. corporations from 1993-2005. They find large fragmentation of CEO talent pools. In particular, about 68 percent of new CEOs are former employees of their own firm ("insider CEOs") and 86 percent are former employees in firms belonging to the same industry (including insider CEOs). Talent pool structure explains several compensation practices: CEO compensation is only benchmarked against other firms, and pay-for-luck is prevalent only when the industry has a small percentage of insider CEOs. Finally, the authors study the...