Constraining Managers without Owners: Governance of the Not-for-Profit Enterprise

Mihir A. Desai and Robert J. Yetman

No 11140, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the absence of owners, how effective are the constraints imposed by the state in promoting effective firm governance? This paper develops state-level indices of the legal and reporting rules facing not-for-profits and examines the effects of these rules on not-for-profit behavior. Stronger non-distribution constraints are associated with greater charitable expenditures and foundation payouts while more stringent reporting requirements are associated with lower insider compensation. The paper also examines how governance influences an alternative metric of not-for-profit performance -- the provision of social insurance. Stronger governance measures are associated with intertemporal smoothing of resources and greater activity in response to negative economic shocks.

JEL-codes: G30 H40 K20 L30 (search for similar items in EconPapers)
Date: 2005-02
New Economics Papers: this item is included in nep-acc, nep-bec, nep-cfn and nep-law
Note: CF PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Mihir A. Desai & Robert J. Yetman, 2015. "Constraining Managers without Owners: Governance of the Not-for-Profit Enterprise," Journal of Governmental & Nonprofit Accounting, vol 4(1), pages 53-72.

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