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The United States has many banks that are small relative to large corporations and play a limited role in corporate governance, and a well developed stock market with an associated market for corporate control. In contrast, Japanese and German banks are fewer in number but larger in relative size and are said to play a central governance role. Neither country has an active market for corporate control. We extend the debate on the relative efficiency of bank-and stock market-centered capital markets by developing a further systematic difference between the two systems: the greater vitality of venture capital in stock market-centered systems. Understanding the link between the stock market and the venture capital market requires understanding the contractual arrangements between entrepreneurs and venture capital providers; especially the importance of the opportunity to enter into an implicit contract over control, which gives a successful entrepreneur the option to reacquire control from the venture capitalist by using an initial public offering as the means by which the venture capitalist exits from a portfolio investment. We also extend the literature on venture capital contracting by offering an explanation for two central characteristics of the U.S. venture capital market: relatively rapid exit by venture capital providers from investments in portfolio companies; and the common practice of exit through an initial public offering.

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Outside directors and audit committees are widely considered to be central elements of good corporate governance. We use a 1999 Korean law as an exogenous shock to assess how board structure affects firm market value. The law mandates 50% outside directors and an audit committee for large public firms, but not smaller firms. We study how this shock affects firm market value, using event study, difference-in-differences, and instrumental variable methods, within a regression discontinuity approach. The legal shock produces large share price increases for large firms, relative to mid-sized firms; share prices jump in 1999 when the reforms are announced.

We determine how pediatric emergency department (ED) visits changed during the COVID-19 pandemic in a large sample of U.S. EDs. Methods: Using retrospective data from January-June 2020, compared to a similar 2019 period, we calculated weekly 2020-2019 ratios of Non-COVID-19 ED visits for adults and children (age 18 years or less) by age range. Outcomes were pediatric ED visit rates before and after the onset of pandemic, by age, disposition, and diagnosis. Results: We included data from 2,213,828 visits to 144 EDs and 4 urgent care centers in 18 U.S. states, including 7 EDs in children's hospitals. During the pandemic period, adult non-COVID-19 visits declined to 60% of 2019 volumes and then partially recovered but remained below 2019 levels through June 2020. Pediatric visits declined even more sharply, with peak declines through the week of April 15 of 74% for children age < 10 years and 67% for 14-17 year. Visits recovered by June to 72% for children age 14-17, but to only 50% of 2019 levels for children < age 10 years. Declines were seen across all ED types and locations, and across all diagnoses, with an especially sharp decline in non-COVID-19 communicable diseases. During the pandemic period, there was 22% decline in common serious pediatric conditions, including appendicitis. Conclusion: Pediatric ED visits fell more sharply than adult ED visits during the COVID-19 pandemic, and remained depressed through June 2020, especially for younger children. Declines were also seen for serious conditions, suggesting that parents may have avoided necessary care for their children.

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We study shock-based methods for credible causal inference in corporate finance research. We focus on corporate governance research, survey 13,461 papers published between 2001 and 2011 in 22 major accounting, economics, finance, law, and management journals; and identify 863 empirical studies in which corporate governance is associated with firm value or other characteristics. We classify the methods used in these studies and assess whether they support a causal link between corporate governance and firm value or another outcome. Only a stall minority of studies have convincing causal inference strategies. The convincing strategies largely rely on external shocks-usually from legal rules-often called "natural experiments". We examine the 74 shock-based papers and provide a guide to shock-based research design, which stresses the common features across different designs and the value of using combined designs.