assessing the performance of renewable electricity support instruments abstract the performance of feed in tariffs and tradable certificates is assessed on criteria of efficacy efficiency equity and institutional feasibility in the early stage of transition to an energy system based entirely on renewable energy supplies renewable electricity can only thrive if support takes into account the specific technical economic and political problems which result from embedding this electricity in conventional power systems whose technology organizational structure environmental responsibility and general mission differ profoundly from the emerging renewable based system support schemes need to capture the diversity of power supplies the variable nature of some renewable supplies and their different attributes for the purposes of public policy they must take into account the variety of generators including small decentralized generation emerging in a renewable based system and the new relationships between generators and customers renewable energy policies need a clear point of reference because the incumbent power systems are not sustainable they must adapt to the requirements of the renewable ones not the other way round incumbent systems carry the responsibility of paying the transition something that corresponds best with the polluter pays principle

an antitakeover amendment for stakeholders the non financial effects nfe antitakeover amendment addresses the duties of company directors and management when faced with a possible takeover bid the nfe amendment either permits or requires managers to consider the interests of the company s stakeholders during takeover bids other types of antitakeover devices have been viewed as protecting either stockholder or management interests the nfe amendment would appear to protect a broad spectrum of interests including those of company employees creditors and the community in which the company operates positive market returns to the adoption of nfe amendments provide some evidence that investors approve the percent of both management and institutional ownership are positively related to the market reaction to the nfe amendment adoption to the extent that institutional ownership proxies for the broad spectrum of stakeholder interest nfe devices unlike some other amendments that have been studied appear to be in the interests of more than a single interest group

interconnectivity of communications networks and international trade in this study a multi country model of trade is developed that captures the role of country specific communications network interconnectivity which enhances trade in intermediate business services the number of countries connected to inter nationally interconnected networks is found to determine the structure of comparative advantage that is countries with interconnected networks have a comparative advan tage in the good that requires business services provided via networks in connected countries producers of that good benefit from the efficient transmission of business services this research also demonstrates that countries whose country specific net works are not connected to the interconnected networks may become worse off as the

network externalities discrete demand shifts and submarginal cost pricing the introduction of a new product often causes a massive discrete demand shift to the new product this study demonstrates that if a large scale demand shift to a new product is accompanied by network externalities it may result in submarginal cost pricing by which the seller sets its price below the marginal cost this finding casts new light on dumping and safeguard issues in the real world jel classification d42 externalites de reseaux deplacements discrets de la demande et tarification en deca du cout marginal l introduction d un nouveau produit engendre souvent un deplacement massif discret de la demande vers le nouveau produit cette etude montre que si un tel deplacement de la demande est accompagne d externalites de reseaux il peut s ensuivre une tarification en deca du cout marginal ou le vendeur fixe son prix en dessous du cout marginal ce resultat jette une lumiere nouvelle sur les problemes de dumping et de protection dans le monde reel

renewable energy growth and the financial performance of electric utilities a panel data study abstract electric utilities are under pressure to increase clean energy production although the adoption of renewable energy can improve the utilities environmental performance a fundamental question is if it also pays in economic terms building on the natural resource based view of the firm we answer this question using two data analysis methods first we carry out a regression analysis of panel data from 66 large electric utilities covering the period 2005 2014 applying both a fixed and random effects estimator subsequently we use the granger causality test to explore possible causality links our results show a negative correlation at the firm level between renewable energy increase and short term as well as long term financial performance more specifically we find that an increase in renewable energy penetration granger causes a reduction of long term performance however the results also show that a firm s carbon intensity moderates the relationship when the focus is on the country level we find that an increase in renewable power penetration is also negatively correlated to long term firm performance which might be explained by the combined effect of low power demand and overcapacity in developed economies we conclude that the concept of organizational ambidexterity may supplement the natural resource based view of the firm for a better understanding of the relationship between an increase in renewable power and a firm s profitability

antitakeover charter amendments and stockholder wealth abstract many large corporations have recently adopted antitakeover charter amendments which make the transfer of corporate control more difficult this paper develops and tests competing theoretical explanations for the passage of these amendments in one view antitakeover provisions are adopted because incumbent management seeks job protection at stockholders expense the alternative hypothesis is that antitakeover provisions benefit stockholders perhaps by extracting greater payment in exchange for corporate control although inconclusive the evidence provides weak preliminary support for the hypothesis that antitakeover amendments are best explained as a device for managerial entrenchment

issuing costs to existing shareholders in competitive and negotiated underwritten public utility equity offerings abstract this paper presents the results of an empirical investigation of whether there is any difference in the cost incurred by public utilities if they issue new equity through a negotiated or competitive underwriting we conclude that the expected cost of a competitive offer is less than the expected cost of a negotiated offer but that the variance of the cost is substantially greater with a competitive offer these results are interesting because most public utilities use negotiated underwriting unless forced by regulation to use competitive offers this paper is also an addition to the growing agency theory literature

golden parachutes shark repellents and hostile tender offers a common view of golden parachutes and shark repellents is that they are designed by management to insulate itself from the discipline imposed by the market for corporate control and so are harmful to shareholders this paper offers an alternative view that these devicesare beneficial to shareholders because they allow better contracting between manager and shareholders evidence on the incidence of goldenparachutes and on the compensation tenure relationship for managers of golden parachute firms supports the alternative view copyright 1986 by american economic association

raiders or saviors the evidence on six controversial investors abstract carl icahn irwin jacobs carl lindner david murdock victor posner and the late charles bluhdorn are usually portrayed as corporate raiders the evidence here however shows that between 1977 and 1982 when it was first announced that they had purchased stock in a given firm stock prices on average increased significantly the investors activities in target firms for the two years following the initial stock purchase are likewise inconsistent with raiding we discuss two hypotheses that are consistent with the evidence first these investors improve the management of target firms second they are systematically able to identify under priced stocks

regulating technological change the strategic reactions of utility companies towards subsidy policies in the german spanish and uk electricity markets abstract this paper focuses on how incumbent electric utilities strategically react to subsidy schemes supporting renewable energy technologies in the uk germany and spain firms coordinate the development of their technological capabilities and their political activities to shape their regulatory environment analysing the diffusion of wind power in these countries we show that the different ways in which firms coordinate their technological and political strategies lead to very different market outcomes both for the firms market share and the size of the overall market although incumbents are usually seen as being resistant to change in energy systems we show that spanish utilities proactively drive the diffusion of wind power we speculate about the relation between the ownership structure of the energy system and its inertia with respect to the integration of new technologies we derive novel policy implications that explicitly take into account the strategic actions of incumbent firms shaping the technological and regulatory system

dual class recapitalizations as antitakeover mechanisms abstract we report evidence on shareholder wealth effects of 94 firms recapitalizing with dual classes of common stock with disparate voting rights we find significant negative abnormal stock price returns at the announcement of the dual class recapitalization when we consider recapitalizations separately announced since the nyse imposed a moratorium is june 1984 on the delisting of companies with dual classes of equity we find significant negative abnormal returns as compared with insignificant returns in the earlier period those firms recapitalizing from june 1986 through may 1987 experienced the most significant negative returns observed

corporate financial policy and corporate control abstract this paper presents evidence that stockholder wealth declines on average when managers respond to attempted hostile takeovers with defensive changes in asset and ownership structure the data also indicate that these corporate restructurings are typically quite large and that many are attempts by managers to create barriers specific to the hostile bidder and or to consolidate a block of voting securities in the hands of management allies the evidence suggests that defensive motives whether beneficial or harmful influence corporate asset and ownership structure

defensive mechanisms and managerial discretion we study a model where firms may possess free cash flow and takeovers may be disruptive we show that the possibility of a takeover combined with defensive mechanisms and the ability to pay greenmail can solve the free cash flow problem in an efficient way the payment of greenmail reveals information that generates a stock price decline that exceeds the value of the greenmail payment even though the payment of greenmail is value maximizing optimal defensive measures limit takeover attempts if the target stock price is too low we also provide cross sectional implications of the analysis

standstill agreements privately negotiated stock repurchases and the market for corporate control abstract standstill agreements are voluntary contracts which limit a substantial stockholder s ownership interest in a corporation for a specified number of years they are often accompanied by repurchase of the substantial stockholder s shares at a premium above the market price standstills and premium buybacks reduce competition for corporate control and provide differential treatment of large block stockholders the analysis indicates a statistically significant negative average effect on non participating stockholder wealth associated with standstill agreements negotiated premium repurchases are also associated with negative but less significant stockholder returns the evidence is inconsistent with the hypothesis that these management actions are in the best interests of non participating stockholders

congestible communications networks and international trade we build a two country model of monopolistic competition with communications networks a communications network is characterized by 1 the existence of large fixed costs of network provision and 2 the presence of congestion it is demonstrated that both the size of a country and the relative magnitude of the congestion effect determine its comparative advantage if the congestion effect resp the cost sharing effect prevails universally a comparative advantage in the goods that require communications is held by the smaller resp larger of the two countries jel classification d43 f12 reseaux de communication congestion et commerce international ce memoire presente un modele de concurrence monopolistique a deux pays avec des reseaux de communication un reseau de communication est caracterise par 1 l existence de couts fixes importants pour la mise en place du reseau et 2 la presence de congestion on montre que la taille du pays et la magnitude relative de la congestion determinent l avantage comparatif si l effet de congestion ou respectivement l effet de partage des couts prevaut un avantage comparatif dans les biens qui demandent plus de communication est detenu par le plus grand respectivement le plus petit des deux pays

the impact of capital market imperfections on investment cash flow sensitivity abstract we examine the investment cash flow sensitivity of us manufacturing firms in relation to five factors associated with capital market imperfections fund flows institutional ownership analyst following bond ratings and an index of antitakeover amendments we find a steady decline in the estimated sensitivity over time furthermore we find that investment cash flow sensitivity decreases with increasing fund flows institutional ownership analyst following antitakeover amendments and with the existence of a bond rating the overall evidence suggests that investment cash flow sensitivity decreases with factors that reduce capital market imperfections

the impact of stronger intellectual property rights on science and technology in developing countries abstract this paper identifies some effects of the global trend towards stronger protection of intellectual property rights on developing countries and traces related debates pharmaceutics biodiversity and ethnic knowledge are critical areas of impact trade relating intellectual property might allow developing countries to be compensated but incentive implementation of optimal compensation in the legislatures seems infeasible scientific communities in developing countries are particularly vulnerable to limitations of cooperation and access to information resulting from stronger intellectual property rights protection as their efforts to obtain normal science results must be considerable consequences of the bayh dole act and of the patenting of research tools on international scientific cooperation are analysed in this context

environmental innovation and environmental performance abstract by estimating a simultaneous panel data model of environmental innovation and toxic air pollution this paper identifies bi directional causal links between the two we study a panel of 127 manufacturing industries over the period 1989 2004 pollutant emissions are an implicit measure of policy stringency and environmental patent counts are used to measure environmental innovation after accounting for the joint endogeneity we find that environmental innovation is an important driver of reductions in us toxic emissions conversely we find that tightened pollution targets induce environmental innovation however our estimates indicate that the environmental policy multiplier the proportionate contribution of induced innovation to long run emission reduction is small

international outsourcing and factor prices with multistage production we develop a dual representation of the technology of international fragmentation for an industry using 2 factors in a continuum of stages we then derive a generalised factor price frontier which incorporates an endogenous adjustment of the margin of fragmentation using this frontier in a 2 2 general equilibrium model we investigate the role of outsourcing in the adjustment to a decline in the final output price of the multistage industry and the attendant factor price effects we also explore the implications of an improved technology of international fragmentation on the margin of fragmentation and on domestic factor prices

externalities and corporate objectives in a world with diversified shareholder consumers if shareholders own diversified portfolios and if companies impose externalities on one another shareholders do not want value maximization to be corporate policy instead shareholders want companies to maximize portfolio values this occurs when firms internalize between firm externalities any kind of externality pecuniary or nonpecuniary vertical or horizontal suffices what matters is simply that one company s actions affect another s value thus besides the traditional benefit of risk reduction portfolio diversifi cation offers additional benefits to shareholders through helping internalize externalities this paper documents the extent of diversification and cross ownership of stocks among companies where these externalities are likely to be large and provides a capital market test of how merger offers vary with the extent of cross ownership

valuation effects of greenmail prohibitions greenmail payments are widely viewed as actions designed by managers to perpetuate their tenure in offiee this view which suggests that greenmail prohibitions would enhance shareholder wealth receives mixed empirical support in this paper the average market reaction to charter amendments prohibiting greenmail payments is weakly nega tive suggesting there is a value to maintaining managerial flexibility nonlinear maxi mum likelihood estimation however reveals a strong positive correlation between the market reaction and the firm s abnormal stock price runup over the three months just prior to the proxy mailing date for the subsample of firms with a relatively large prior runup the precommitment not to pay greenmail is value enhancing if the prior runup reflects takeover rumors then this evidence is consistent with the proposition that greenmail pay ments amidst takeover speculations are value decreasing

tightening environmental standards the benefit cost or the no cost paradigm ms ff ichael porter and claas van der linde have written a paper that is interesting and to us at least somewhat astonishing it is a defense of environmental regulation indeed an invitation to more stringent regulation that makes essentially no reference to the social benefits of such regulation this approach contrasts starkly with the methods that economists and other policy analysts have traditionally used when assessing environmental or other regulatory programs the traditional approach consists of comparing the beneficial effects of regulation with the costs that must be borne to secure these benefits for environmental regulation the social benefits include the reductions in morbidity or premature mortality that can accompany cleaner air the enhanced recreational opportunities that can result from water quality improvements the increased land values that might attend the cleanup of a hazardous waste site the enhanced vitality of aquatic ecosystems that might follow reductions in agricultural pesticide use or any of the other potentially significant benefits associated with tighter standards from this benefit cost approach emerges the standard tradeoff discussed in virtually every economics textbook porter and van der linde deny the validity of this approach to the analysis of environmental regulation claiming it to be an artifact of what they see as a static mindset in their view economists have failed to appreciate the capacity of

state intervention in the market for corporate control abstract this study investigates the impact of pennsylvania senate bill 1310 on the share prices of pennsylvania corporations considered the most severe of the second generation antitakeover laws the statute limits the ability of shareholders to challenge management through the proxy process and eliminates the traditional fiduciary obligation of directors to promote shareholders interests we find that pa sb1310 significantly decreased share values and estimate the loss to shareholders of pennsylvania firms at 4 billion however firms with antitakeover charter amendments already in place were less affected and firms that exempted themselves from pa sb1310 recovered a portion of shareholders wealth

the collapse of first executive corporation junk bonds adverse publicity and the run on the bank phenomenon abstract in april 1991 regulators seized the major subsidiaries of first executive corporation fe an insurer that invested heavily in junk bonds during the junk bond market turmoil of 1989 1990 adverse publicity fueled a bank run at fe forcing a 4 billion portfolio liquidation before the market rose 50 60 in 1991 1992 more traditional insurers did not receive commensurate press coverage despite their substantial exposure to real estate declines which were roughly 2 5 times the junk bond decline seizure of fe s subsidiaries was defensible although fe would have become solvent within a year given average junk bond market appreciation

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

dual class shares a review the majority of firms traded in the world s three largest stock exchanges london new york and tokyo follow the one share one vote principle however in other countries dual classes of shares are common place for example 50 percent of the publicly traded dutch firms have non voting equity and approximately 75 percent of the publicly traded danish finnish and swedish firms have shares that differ in their voting rights this paper reviews the arguments as to why firms create dual classes of shares their effect on firm value and the relative prices of shares that differ only in their voting rights copyright 1992 by oxford university press

it pays to be green a premature conclusion it has been claimed that good environmental performance can improve firms economic performance however because of e g data limitations the methods applied in most previous quantitative empirical studies on effects of environmental performance on economic performance of firms suffer from several shortcomings we discuss these shortcomings and conclude that previously applied methods are unsatisfactory as support for a conclusion that it pays for firms to be green then we illustrate the consequences of these shortcomings by performing several regression analyses of the effect of environmental performance on economic performance using a panel data set of norwegian plants a pooled regression where observable firm characteristics like e g size or industry are controlled for confirms a positive effect of environmental performance on economic performance however the estimated positive effect could be due to omitted unobserved variables like management or technology when the regression model controls for unobserved plant heterogeneity the effect is generally no longer statistically significant hence although greener plants tend to perform economically better the analysis provides little support for the claim that it is because they are greener these empirical findings further indicate that a conclusion that it pays to be green is premature

interconnected communications networks and home market effects abstract this study develops a model of trade that highlights the effects of the interconnection of country specific communications networks as a driving force behind trade in high tech products with positive transport costs by constructing a two country model of monopolistic competition with two production factors it is shown that the locational decisions of firms may magnify the influence of interconnected networks in a reversal of the standard home market effects the abundance of unskilled labour in the developing countries can attract high tech firms from the developed countries jel classification d43 f12 l13

the nestle crash on november 17 1988 the board of directors of nestle ag decided to allow foreign investors to hold nestle registered stock reversing a longstanding practice this decision had a tremendous impact on the prices of the firm s three classes of common stock as well as on the prices of several other corporations traded on the zurich stock exchange these price changes can be explained by the hypothesis that demand curves slope down

do corporate global environmental standards create or destroy market value arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises mnes investing in emerging and developing markets analyzing the global environmental standards of a sample of u s based mnes in relation to their stock market performance we find that firms adopting a single stringent global environmental standard have much higher market values as measured by tobin sq than firms defaulting to less stringent or poorly enforced host country standards thus developing countries that use lax environmental regulations to attract foreign direct investment may end up attracting poorer quality and perhaps less competitive firms our results also suggest that externalities are incorporated to a significant extent in firm valuation we discuss plausible reasons for this observation

voting power in the proxy process abstract the likelihood that a firm will enact a management sponsored antitakeover charter amendment depends on ownership structure this implies that the adoption of antitakeover amendments may be anticipated then announcement returns provide a biased estimate of wealth effects an estimator that corrects for the bias induced by anticipation indicates that the enactment of an antitakeover amendment is associated with a statistically significant decrease in shareholder wealth the voting power of employee stock ownership plans and the chief executive officer plays a prominent role in determining whether a firm will adopt this type of takeover defense

the effect of poison pill securities on shareholder wealth abstract this paper examines empirical evidence about the effect of poison pill takeover defenses on shareholder wealth i find evidence that announcements of the most restrictive forms of the pill defense are associated with stock price declines also the most restrictive forms of the pill defense are associated with abnormally high rates of defeat of unsolicited tender offers although this evidence is consistent with managerial entrenchment the evidence implies that on average poison pill defenses have seemingly had only a modest effect on firm valuation

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

trade and communication costs two models in which communication costs are a cost to trade are investigated one model looks at the role of communication in determining the firms geographic extent in the use of local factor services communication costs are modelled as a quasi public good network in which communication services are provided by an average cost pricing monopolist the network technology is subject to increasing returns congestion effects and network externalities the second model focuses on communication for the purposes of international trade in goods with similar assumptions on the technology of communication as in the first model in this model an important distinction is made between international equilibrium and global equilibrium in both models the impact of reductions in communication costs on the market extent of firms trade volumes and productivity are examined the models have generic multiple equilibria with quite different welfare and comparative static properties

managerial share ownership and the stock price effects of antitakeover amendment proposals studies that test for an average stock price effect of antitakeover amendments present different results disagreeing with respect to both the significance and the direction of the effect this study determines whether effects can be identified when managerial share ownership and amendment type are considered results suggest a negative relation between managerial share ownership and the stock price reaction to all but fair price amendment proposals managerial control over voting rights has been the focus of recent studies in the finance literature for example dann and deangelo 1988 present evidence on managerial actions taken to enhance voting control while stulz 1988 suggests ways that managers can increase control of voting rights by adopting antitakeover amendments or dual classes of common stock that reduce the voting power of outside shareholders since antitakeover amendments may be one way to effectively increase managerial control over voting rights this paper investigates the relation between managerial share ownership the type of antitakeover amendment proposed and the stock price reaction to the amendment proposal this study is motivated partially by existing evidence regarding the stock price effect of antitakeover amendments empirical studies are inconclusive regarding the amendments effects on shareholder wealth disagreeing with respect to both significance and direction deangelo and rice 1983 find statistically insignificant negative abnormal returns surrounding the amendment proposals while linn and mcconnell 1983 find statistically significant positive abnormal returns jarrell and poulsen 1987 find a statistically insignificant negative reaction to amendment proposals for exchange listed firms while mcwilliams 1988 finds an insignificant positive reaction at proposal announcement these results

toxics release information a policy tool for environmental protection abstract this study examines investor reactions to the repeated public disclosure of environmental information about firms in the chemical industry and the effectiveness of this information as a decentralized mechanism for deterring their pollution by allowing investors to benchmark the performance of firms repeated provision of the toxics release inventory led firms to incur statistically significant negative stock market returns during the one day period following the disclosure of that information in the years 1990 1994 these losses had a significant negative impact on subsequent on site toxic releases and a significant positive impact on wastes transferred off site but their impact on total toxic wastes generated by these firms is negligible

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

the effects of integration on regional disparities convergence divergence or both this paper o ers an explanation for the coexistence of convergence across countries and the lack thereof at the regional level in the european union the model shows that even if it accelerates growth and brings convergence across countries the intensi5cation of international knowledge spillovers due to more cross country interaction may exacerbate within country regional disparities if regions with di erent specialization do not bene5t evenly from the exchange of knowledge the empirical evidence supports the implications of the model in particular the data show that regions specialized in advanced sectors at the beginning of the sample period became more similar in terms of per capita income while regions specialized in traditional sectors lagged c 2002 elsevier science b v all rights reserved jel classi cation o52 o41 o18 f15

north south knowledge spillovers and competition convergence versus divergence abstract technology spillovers from high productivity countries in the north allow low productivity countries in the south to improve productivity in high tech sectors relatively easy however the south s share in world goods markets for high tech products is relatively low which reduces opportunities for learning by doing our simple ricardian endogenous growth model shows how the balance between toughness of competition in trade and the strength of north south spillovers determines whether productivity levels diverge partially converge or fully converge in the long run if convergence prevails the north is confronted with declining employment in high tech sectors temporary trade policy measures can turn a diverging economy into a converging one

the effect of management s choice between negotiated and competitive equity offerings on shareholder wealth this paper investigates the effect on shareholder wealth of two events that change management s choice between negotiated and competitive underwritten equity offerings these two events are the suspension and termination of suspension of rule 50 this rule is based on the public utility holding company act of 1935 and requires certain utilities to use the competitive method the results indicate that the shareholders of the affected utilities experience an abnormal negative return on the announcement of the suspension of rule 50 and an abnormal positive return on the announcement of the termination of suspension this evidence is consistent with the joint hypothesis i competitive offerings are less costly than negotiated offerings and ii manager shareholder agency costs are a determinant of the corporate choice between these two methods of raising equity

interpreting common stock returns around proxy statement disclosures and annual shareholder meetings numerous studies have analyzed the stock market reaction to information released in proxy statements two possible biases in proxy statement research are suggested frequently misspecification of the return benchmark and a sample selection bias from analyzing only clean events this paper presents evidence that most of the conclusions of existing studies are not affected by these potential biases a significantly positive abnormal return was found around a random sample of shareholder meeting dates the result indicates that interpreting event study results for announcements occurring around annual shareholder meetings must be conducted carefully the results are consistent with the findings of kalay and loewenstein 14 who argue that risk and expected return can increase around predictable information producing events alternatively the study can be viewed as being consistent with several recent studies that find anomalous results using daily return data and large samples

large shareholders and the monitoring of managers the case of antitakeover charter amendments this paper examines the role of large shareholders in monitoring managers when they propose antitakeover charter amendments we attempt to distinguish between two competing hypotheses the active monitoring hypothesis and the passive voting hypothesis we find a statistically significant positive relation between institutional ownership and the stockholder wealth effects of various types of amendments after controlling for ownership concentration among institutions managerial ownership and firm size our empirical evidence lends support to the active monitoring hypothesis proposed by demsetz 1983 and shleifer and vishny 1986 that the existence of large shareholders leads to better monitoring of managers

competitive and responsible the relationship between corporate social and financial performance in the energy sector abstract our key research objective in this study is to examine whether investments in corporate social responsibility csr have an effect on corporate financial performance cfp or vice versa the context is the energy industry in which sustainability issues are of vital importance our data set is compiled from the kld database and thomson one we use panel data on energy sector companies covering the years 1991 and 2009 in order to assess granger causality between csr strengths concerns and cfp we consider strengths and concerns separately and use both accounting and market based measures of cfp our findings indicate differing impacts on financial performance csr concerns granger cause both profitability and market value whereas csr strengths seem only to granger cause market value these effects appear after different delays furthermore as cfp does not seem to granger cause csp in most of the model specifications our results do not support bidirectional causality between csp and cfp

takeover defenses ownership structure and stock returns in the netherlands an empirical analysis this study empirically examines the relationships between a firm s takeover defenses and its ownership structure and stock returns analyzing data of dutch listed companies we find that multiple antitakeover defenses are increasingly adopted when firms are characterized by relatively lower ownership concentration the evidence supports the hypothesis that more concentrated ownership of shares provides more effective monitoring of managers as defense by issuing preferred share has recently been the most widely adopted mechanism in the netherlands its impact on shareholders wealth is also analyzed we observe the presence of two opposing effects of this antitakeover measure

the effect of discretionary price control decisions on equity values abstract the macro literature presents conflicting evidence on the effects of price controls in this study the fact that the macro economic effect of wage and price controls is the aggregation of the micro economic effects is used to implement a different approach to measure the effects of price controls the effect of price controls is inferred from examining the impact of discretionary regulatory decisions on the equity values of individual firms during phase ii of nixon s economic stabilization program the empirical results indicate that violators of the regulations incurred significant abnormal losses that were unrelated to the explicit penalties this suggests that implicit penalties were imposed on offending firms the analysis of price increase decisions provides weak evidence that these price commission decisions had an impact on equity values

differentiated bids for voting and restricted voting shares in public tender offers abstract this paper develops a model for takeover bid premiums of voting and restricted voting shares when the bidder wants 100 of the target firm for this special case a higher bid premium may be offered either to the voting or to the restricted voting shareholders we also analyze consequences of the equal offer and one share one vote principles and investigate the model s explanatory power on swedish data

the measurement of corporate environmental performance and its application to the analysis of efficiency in oil industry abstract this paper addresses a measurement of corporate environmental performance and its application to the analysis of efficiency in the petroleum firms in order to measure firms environmental performance we suggest a framework called gscore that consists of five categories namely general environmental management gem input process output and outcome gscore is a proxy measure of corporate environmental performance based on voluntary environment health and safety ehs report and is calculated by aggregating the points of the above five categories we apply our measurement framework to the data of 39 firms voluntary ehs reports which are available on the internet ten of them on which efficiency analysis was conducted with gscore assets employee and profits are in petroleum and refining industry according to our results 1 a gap is found between rhetoric and practical environmental management stemming from calculating the relation between gem and data part in 39 ehs reports 2 on the whole ehs reports of petroleum firms have something in common but there are significant differences in the type and amounts of disclosed data among the ehs reports 3 from the results of efficiency analysis it is found that the number of employee exerts a considerable influence on determining the relative efficiency of petroleum firms then gscore profits and assets in sequence furthermore exxon ashland phillips petroleum and arco are shown to be efficient among 10 petroleum firms

winners and losers in a north south model of growth innovation and product cycles abstract the paper examines the welfare gains from north south trade and their distribution we construct an endogenous growth north south model with four southern stages of development as possible equilibria specialisation in a traditional good the south in addition copies northern high tech manufactured goods the south begins to innovate in its own right and finally a stage in which the south only innovates as in the north we use this model to show that dynamic gains from trade and from southern development through the stages can create new winners unskilled workers in the north and skilled workers in the south

the effect of pre emptive right amendments on shareholder wealth abstract pre emptive rights allow existing shareholders to purchase a new offering of shares before the general public this paper investigates the effect on shareholder wealth of removing pre emptive rights from corporate charters two hypotheses are constrasted 1 shareholder wealth maximization suggests that management uses this extra degree of freedom to pick the least cost method for raising new equity hence the amendment increases shareholder wealth 2 management welfare maximization holds that management will use the passage of the amendment to maximize their own welfare sometimes to the detriment of shareholders hence the amendment decreases shareholder wealth the evidence indicates that the amendment decreases shareholder wealth

enjoying the quiet life corporate governance and managerial preferences much of our understanding of corporations builds on the idea that managers when they are not closely monitored will pursue goals that are not in shareholders interests but what goals would managers pursue this paper uses variation in corporate governance generated by state adoption of antitakeover laws to empirically map out managerial preferences we use plant level data and exploit a unique feature of corporate law that allows us to deal with possible biases associated with the timing of the laws we find that when managers are insulated from takeovers worker wages especially those of white collar workers rise the destruction of old plants falls but the creation of new plants also falls finally overall productivity and profitability decline in response to these laws our results suggest that active empire building may not be the norm and that managers may instead prefer to enjoy the quiet life

beyond does it pay to be green a meta analysis of moderators of the cep cfp relationship review of extant research on the corporate environmental performance cep and corporate financial performance cfp link generally demonstrates a positive relationship however some arguments and empirical results have demonstrated otherwise as a result researchers have called for a contingency approach to this research stream which moves beyond the basic question does it pay to be green and instead asks when does it pay to be green in answering this call we provide a meta analytic review of cep cfp literature in which we identify potential moderators to the cep cfp relationship including environmental performance type e g reactive vs proactive performance firm characteristics e g large vs small firms and methodological issues e g self report measures by analyzing these contingencies this study attempts to provide a basis on which to draw conclusions regarding some inconsistencies and debates in the cep cfp research some of the results of the moderator analysis suggest that small firms benefit from environmental performance as much or more than large firms us firms seem to benefit more than international counterparts and environmental performance seems to have the strongest influence on market measures of financial performance

are tradable green certificates a cost efficient policy driving technical change or a rent generating machine lessons from sweden 2003 2008 in the european policy debate tradable green certificates tgc have been suggested to be a superior regulatory framework for promoting the diffusion of renewable electricity technologies the purpose of this paper is to assess the performance of the swedish tgc system contributing to the european debate on the suitability of different types of frameworks the expectations of the tgc system were that it would a be effective in terms of increasing the supply of green electricity b do this in a cost effective manner from both a social and a consumer perspective c generate an equitable distribution of costs and benefits and d drive technical change so far it has performed adequately in terms of effectiveness and social cost effectiveness however consumer costs have been substantially higher than expected very large rents are generated and at best it contributes marginally to technical change thus a tgc framework should be selected if the overriding concern is to minimize short term social costs of reaching a certain goal with a high degree of predictability however it cannot be expected to also drive technical change keep consumer costs down and be equitable such trade offs need to be revealed and not obscured by analysts

explicit versus implicit contracts evidence from ceo employment agreements we report evidence on the determinants of whether the relationship between a firm and its chief executive officer ceo is governed by an explicit written or an im plicit agreement we find that fewer than half of the ceos of s p 500 firms have comprehensive explicit employment agreements consistent with contracting theory explicit agreements are more likely to be observed and are likely to have a longer du ration in situations in which the sustamabihty of the relationship is less certain and where the expected loss to the ceo is greater if the firm fails to honor the agreement when a firm hires a chief executive officer ceo it enters into a complex relationship that has significant long term implications for its stockholders establishing the terms of this relationship requires determining the ceo s responsibilities compensation perquisites and term of employment the con ditions under which either party can sever the relationship and restrictions on the ceo s outside activities among other considerations despite the com plexity of these arrangements many public companies including some of the largest choose not to put such terms in writing in 2000 less than half of the firms in the s p 500 had a comprehensive written or explicit employment agreement ea with their ceos the other firms had either no written agree ment at all or agreements that covered only limited aspects of their relationship with the ceo such as change of control nondisclosure noncompete or nonso licitation agreements these latter firms and their ceos relied on implicit eas through which the ceo was employed at will we report evidence on the determinants of whether the relationship between a firm and its ceo is contractually defined in an explicit agreement this

the catch up factor in postwar economic growth the catch up factor in postwar economic growth presidential address to the western economic association june 21 1989 i this talk is about two of the central concerns of our time one is the pronounced slowdown of productivity growth that has persisted in the whole of the industrialized world since the early seventies or late sixties about two decades the other is the much slower rate or productivity advance in the united states than in other industrialized countries than has been apparent during almost the whole postwar period about four decades 1 i shall argue that these two developments are connected and that both can be better understood if we think of them as implications of a process of international productivity catch up and convergence that is in certain conditions natural and foreseeable and in a long term sense desirable i mean desirable not only for the countries that are catching up that is obvious i mean desirable also for the old leader that is for the united states as well needless to say i do not contend that a tendency to convergence is the whole story behind the two developments and the anxieties they have caused but i believe it is a large part of it 1 ii let me begin by asking why and what conditions a tendency to convergence is as i say in the nature of things consider two countries otherwise similar but one is a productivity leader the other a laggard there are at least five reasons why the laggard will have a stronger potential for productivity growth than the leader first as the leader s capital stock turns over its embodied technological progress is limited by the advance of knowledge over the lifetime of its capital instruments but a laggard can make a larger leap by substituting modern state of the art equipment for instruments that were obsolete even when originally installed the same applies to modernization in disembodied technology that is when a laggard adopts a leader s advanced practices in the organization of production and management secondly laggards typically suffer from relatively low levels of capital intensity on this account as well as because new capital means a large technological leap the inducement to invest tends to be high so there is a potential for rapid progress by capital accumulation edward f denison 1967 table 21 28 robert e lipsey and irving b kravis 1987 edward n wolff 1987 table 31 thirdly the level of schooling in laggard countries is typically relatively low and in some degree obsolete in content so there is an opportunity for relatively rapid advance by the extension and modernization of education maddison 1982 table 5 7 denison 1967 table 21 28 fourthly in laggards one usually finds a relatively large fraction of partially or wholly redundant workers attached to farming and petty trade this is an opportunity for relatively large gains from the better allocation of workers denison 1967 table 21 28 fifthly the chance for rapid productivity advance along all these channels means a chance for rapid growth in aggregate output and size of markets which brings a productivity bonus from the economies of scale this is the simple core of the tendency to convergence and if that were all there was to it we should expect to see laggards always and everywhere advance faster than a leader rates of productivity growth across countries in any period would be an inverse function of their initial levels of productivity and national levels of productivity would converge towards the leader s by the same token as the process of convergence went on the gaps separating laggards from leaders would become smaller and rates of growth would decline the catch up effect supporting growth would be self limiting weakening steadily as catch up proceeded

utilities business models for renewable energy a review abstract the transformation of today s electric power sector to a more sustainable energy production based on renewable energies will change the structure of the industry consequently utilities as the major stakeholders in this transformation will face new challenges in their way of doing business they will have to adapt their business models to remain competitive in the new energy landscape the present review of business model literature shows that two basic choices exist utility side business models and customer side business models the two approaches follow a very different logic of value creation while the former is based on a small number of large projects the latter is based on a large number of small projects the article reveals that blueprints for utility side business models are available whereas customer side business models are in an early stage of development applying the business model framework as an analytical tool it is found that existing utility side business models comprise a series of advantages for utilities in terms of revenue potential and risk avoidance this study provides new insights about why utilities will favor utility side business models over customer side business models and why they also should engage in customer side business models in their quest for more sustainable future business models

an empirical investigation of the impact of antitakeover amendments on common stock prices abstract antitakeover amendments are amendments to a corporation s charter that impede the ability of an outsider to gain control of the firm a number of individuals and institutions have onjected to such amendments on the grounds that they are not in the best interests of the shareholders of the firms that adopt them this paper employs event time methodology to investigate the impact of antitakeover amendments on the common stock prices of firms that adopt them the results indicate that the announcement of such amendments is associated with a positive revaluation of stock price contrary to the concerns of their critics we conclude that antitakeover amendments are proposed by managers who seek to increase the value of the firm and are approved by stockholders who share that objective

a model of optimal growth strategy abstract in this paper we present an optimal growth model with convex concave technology for an open developing country the latter may choose to produce consumption goods by borrowing on capital markets or to import consumption goods by investing its saving on capital markets we prove there exist two nontrivial steady states an optimal path converges either to 0 or to the high steady state that depends on the levels of the initial debt and or of the debt constraint we also prove there exists a poverty trap if the time preference is very high journal of economic literature classifications numbers d9 e13 o41

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd