The Influence of Corporate Governance in Navigating Difficult Economic Times: Evidence from Young Internet Firms after the Crash

research assistance for this project. We explore whether corporate governance (CG) characteristics including independent boards, high levels of monitoring incentives, and CEO pay-performance sensitivity are related to various outcomes following the capital market shakeout that occurred in the spring of the year 2000. Using a sample of 277 Internet firms that conducted IPOs from 1996—1999. We find that firms with more outsiders on the board and with greater CEO pay-performance sensitivities are less likely to fail, while firms whose CEO owns a greater percentage of stock are more likely to fail. We find this only when we examine the homogeneous subsample of a single SIC code. We conclude that a homogeneous sample helps to reveal how CG mechanisms protect shareholder investments. We also detect relations between survivorship and traditional measures of financia