earnings risk taking and capital accumulation in small and large community banks abstract we examine the relationships between ownership structure and both earnings and risk taking among community banks before during and after the us financial crisis we find that publicly held small community banks had lower earnings than privately held ones before the recession but had higher earnings during and after the recession publicly held small community banks exhibited similar risk taking to privately held ones before and during the recession but greater risk taking after we also find that publicly held small community banks de risked more slowly than privately held ones following the recession large community banks on the other hand show no consistent relationship between ownership structure and earnings and a strong cyclical relationship between ownership structure and risk taking these findings expand our understanding of how community bank performance and capital accumulation behaves through different cyclical periods and how ownership structure affects that behavior

human capital and inequality dynamics the role of education technology the paper offers a unified way to examine several puzzles on inequality dynamics it focuses on differences in the education technology and their effects on income distributions our overlapping generations economy has the following features 1 consumers are heterogenous with respect to ability and parental human capital and 2 intergenerational transfers take place via parental direct investment in education and public education financed by taxes possibly with a level determined by majority voting we explore several variations in the production of human capital some attributed to home education and others related to public education and indicate how various changes in education technologies affect the intragenerational income inequality along the equilibrium path

a combinatorial optimization approach to nonmarket environmental benefit aggregation via simulated populations this paper considers the use of a combinatorial optimization technique in the aggregation of environmental benefit values combinatorial optimization is used to statistically match population census data to a contingent valuation survey the matched survey and census information is then used to produce regional and national total willingness to pay figures these figures are then compared to figures derived using more standard approaches to calculating aggregate environment benefit values the choice of aggregation approach is shown to have a major impact upon estimates of total benefits at a regional level especially when the target population displays considerable heterogeneity across space

an expository note on individual risk without aggregate uncertainty abstract in economies where agents bear some risk the analysis would often be facilitated by the assumption that the risks are i i d and disappear in the aggregate a formal appeal to the law of large numbers requires the consideration of a sequence of finite economies in an economy with a continuum of agents there are countable families of sets for which it is impossible for a law of large numbers to be valid with countably many agents and a finitely additive measure independence is compatible with the law of large numbers

the impact of foreign board membership on firm value abstract this study examines the effect of foreign anglo american board membership on corporate performance measured in terms of firm value tobin s q using a sample of firms with headquarters in norway or sweden the study indicates a significantly higher value for firms that have outsider anglo american board member s after a variety of firm specific and corporate governance related factors have been controlled for we argue that this superior performance reflects the fact that these companies have successfully broken away from a partly segmented domestic capital market by importing an anglo american corporate governance system such an import signals a willingness on the part of the firm to expose itself to improved corporate governance and enhances its reputation in the financial market

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

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

the aggregation of environmental benefit values welfare measures distance decay and total wtp abstract we review the literature regarding the aggregation of benefit value estimates for non market goods two case studies are presented through which we develop an approach to aggregation which applies the spatial analytic capabilities of a geographical information system to combine geo referenced physical census and survey data to estimate a spatially sensitive valuation function these case studies show that the common reliance upon political rather than economic jurisdictions and the use of sample mean values within the aggregation process are liable to lead to significant errors in resultant values we also highlight the fact that for resources with use values then we should expect overall values to reduce with increasing distance from such sites but that changes in the choice of welfare measure will determine whether such distance decay is to be expected within values stated by those who are presently non users the paper concludes by providing recommendations for future improvements to the methodology

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

the determinants of the voting premium in italy the evidence from 1974 to 2003 abstract we examine the voting premium in italy in the period 1974 to 2003 when it ranged from 1 to 100 at firm level the measure of the price differential between voting and non voting stocks cannot be fully explained without taking into account the effect of the largest shareholder s identity family controlled firms have higher voting premiums especially when the family owns a large stake in the company s voting equity and the founder is the firm s ceo and or chairman we explain this result by showing that families attach greater importance to control and are more prone than other types of controlling shareholders to expropriate the non voting class of shareholders

research on equity adjustment agency costs and commercial bank performance experimental evidence from china this article studies the impact of options to adjust the performance of commercial banks from agency costs in the shareholding structure of the adjustment process considering changes in agency costs only in agency costs no more than the commercial banks when new results the company will have to adjust agent the cost of power stealth measure more just by reflecting the size of the incremental results in addition equity restructuring costs are the basis of agency governance and ownership structure has an important impact on agency costs through a few selected china 14 listed commercial banks 2007 2012 data we show that the impact of performance of commercial banks on the proportion of the company s largest shareholders is generally more significant however the impact of equity restriction on commercial banks was not as significant as seen from the application of balanced panel data model analysis and the test results however the agency costs of commercial bank performance were signific

the multibank holding company effect on cost efficiency in banking abstract this paper tests the hypothesis that differences in the organizational form embodied in independent banks one bank holding companies and multibank holding companies result in differences in operating cost efficiency the transaction and agency cost paradigms for analysis of organizational efficiency provide theoretical motivation for the hypothesis the effects of organizational form on bank operating expenses for individual banks are evaluated on subsamples divided into quartiles based on total revenue results indicate that for banks having revenues in the lowest quartile both one bank and multibank holding company affiliates are cost efficient relative to independent banks multibank holding company affiliates are cost efficient relative to both one bank affiliates and independent banks for banks in the interquartile range no significant differences in cost efficiency are noted banks in the highest revenue quartile relative efficiency at the organizational level is also evaluated results provide evidence of lower operating costs for banking operations of both multibank and one bank holding company organizations relative to independent banks taken as a whole the results imply that holding company affiliation conveys cost advantages to banking units below the 75th revenue percentile

the efficiency of investment in the presence of aggregate demand spillovers in the presence of aggregate demand spillovers an imperfectly competitive form s profit is positively related to aggregate income which in turn rises with profits of all firms in the economy this pecuniary externality makes a dollar of a firm s profit raise aggregate income by more than a dollar since other firms profits also rise and in this way gives rise to a multiplier since such multipliers are ignored by firms making investment decisions privately optimal investment decisions under uncertainty will not in general be socially optimal under reasonable conditions investment is too low

abertura comercial dotacao de fatores produtivos e a desigualdade de rendimentos no brasil 1990 1998 this work studies the empirical relations between the endowment of production factors commercial opening and personal income in the brazilian states in the period between and 1998 using given in panel it tests the hypothesis of that regions or states with bigger per

income distribution factor endowments and trade openness abstract this paper studies the empirical links among factor endowments trade and personal income distribution by using panel data we show that land and capital intensive countries have a less equal income distribution while skill intensive countries have a more equal income distribution we also show that the effects of trade openness on inequality depend on factor endowments in a way consistent with several recent case studies but not with the simple hecksher ohlin framework our results are robust to the division of the sample according to level of income the inclusion of different regressors the use of different measures of trade openness and of relative factor abundance and tests for possible problems of endogeneity

managerial ownership of voting rights abstract managers of firms with dual classes of common stock can choose different quantities of votes for a given cash flow interest by choosing different quantities of the two securities we study managerial stock holdings in 45 dual class firms and find that vote ownership per se is an important motivation for these holdings in that corporate officers and their families hold a median 56 9 of the votes and 24 0 of the common stock cash flows we also find significant family involvement in many sample firms and document four case studies in which explicit acquisition premiums were paid for superior voting shares

savings and loan ownership structure and expense preference abstract this paper studies the influence of ownership structure on managerial expense preference behavior the hypothesis is that the greater the diffusion of ownership the weaker is the monitoring by owners and the greater is the degree of expense preference behavior whereas expense preference behavior affects inputs particularly on the job consumption of managers well functioning managerial labor markets should resolve the problem by equating the total compensation of managers across firms of different ownership structures a more serious problem however is the potential impact of expense preference behavior on output evidence from the savings and loan industry is adduced indicating that the more diffuse ownership structures associated with mutuality exhibit greater agency costs through the expansion of inputs and outputs beyond profit maximizing levels

structural models and endogeneity in corporate finance the link between managerial ownership and corporate performance this paper presents a parsimonious structural model that isolates primary economic determinants of the level and dispersion of managerial ownership firm scale and performance and the empirical associations among them in particular variation across firms and through time of estimated productivity parameters for physical assets and managerial input and corresponding variation in optimal compensation contract and firm size combine to deliver the well known hump shaped relation between tobin s q and managerial ownership to assess the effectiveness of standard econometric approaches to the endogeneity problem we apply those remedies to panel data generated from the model the unfortunate conclusion is that at least in the ownership performance context proxy variables fixed effects and instrumental variables do not generally provide reliable solutions to simultaneity bias

capital labor and the firm a study of german codetermination under the german corporate governance system of codetermination employees are legally allocated control rights over corporate assets through seats on the supervisory board that is the board of nonexecutive directors the supervisory board oversees the management board the board of executive directors approves or rejects its decisions and appoints its members and sets their salaries we empirically investigate the implications of this sort of labor participation in corporate decision making we find that companies with equal representation of employees and shareholders on the supervisory board trade at a 31 stock market discount as compared with companies where employee representatives fill only one third of the supervisory board seats we show that under equal representation management board compensation provides incentives that are not conducive to furthering shareholders interests possibly because labor maximizes a different objective function than shareholders we document that under equal representation companies have longer payrolls than their one third representation peers have finally we provide evidence that shareholders respond to the allocation of control rights to labor by linking supervisory board compensation to firm performance and by leveraging up the firm jel g32 g34

owner managers and firm performance during the asian and global financial crises evidence from korea abstractwe examine the performance of the korean owner managers during the 1997 1998 asian financial crisis and the 2008 2009 global financial crisis to establish whether they overcome the unexpected exterior shocks better than employed managers we find that the owner managers record a significantly greater performance during the crises and especially during the latter period moreover our results suggest that such a tendency comes from the owner managers superior investment decisions our paper thus highlights the role of owner managers by studying their performance during the korean economic crisis periods jel g01 g32 g34

the evolution of inequality after trade liberalization abstract the paper presents a general framework for the analysis of the evolution of personal income distribution following trade liberalization the model allows many factors of production and the possibility of capital gains in this framework the short run evolution of inequality depends on the wage to wealth ratio while changes in the interest rate determine the changes in long run inequality the general framework is applied to the dynamic specific factors model of eaton rev econ stud vliv 1987 in this model the land labor ratio determines whether a country exports the land using or the capital using good in the long run the type of the export good determines the effects of liberalization on inequality in land labor abundant countries inequalities increase decrease along the dynamic path the model provides an explanation for the differences between latin american and asian countries in their response to trade liberalization econometric analysis provides mixed results for these predictions with the correct signs but non significant coefficients for the coefficient on the interaction between openness and the land labor ratio

firm ownership and productivity a study of family and non family smes motivated by a lack of consensus in the current literature the objective of this paper is to reveal whether family firms are more or less productive than non family firms as a first step this paper links family business research to the theoretical notion that family involvement has an effect on the factors of production from a productivity standpoint second by using a cobb douglas framework we provide empirical evidence that family labour and capital indeed yield diverse output contributions compared with their non family counterparts in particular family labour output contributions are significantly higher and family capital output contributions significantly lower interestingly differences in total factor productivity between family and non family firms disappear when we allow for heterogeneous output contributions of family production inputs these findings imply that the assumption of homogeneous labour and capital between family and non family firms is inappropriate when estimating the production function

does natural resource abundance increase latin american income inequality abstract why is income inequality higher in latin america than in east asia is this phenomenon related to the region s natural resource abundance is it a contributor to latin america s slow and narrowly focused human capital accumulation if so can anything be done to reverse the latin american trends or should we think of the region s fate as unalterable to help answer these questions this paper draws upon standard trade theory and cross sectional empirical analysis to demonstrate that natural resource intensive sectors particularly permanent agriculture absorb capital that might otherwise flow to manufacturing this depresses workers incentive to accumulate skill and delays industrialization

expanding contingent value sample estimates to aggregate benefit estimates current practices and proposed solutions a mail survey was administered to a panel of colorado consumers to obtain estimates of willingness to pay wtp for preserving union park detailed socioeconomic data for all surveyed individuals was available a priori we develop and employ the multiple

international factor mobility minimum wage rates and factor price equalization a synthesis this paper examines the behavior of a small open economy facing perfectly elastic supply curves for some of its productive factors in particular the paper derives some comparative statics properties of such economies compares them with the properties of otherwise identical economies in which all factor prices are determined endogenously and investigates the relationship between factor price rigidities factor price equalization and the pattern of specialization among the new results which are proved it is shown that as more and more factor price rigidities are imposed on an economy it comes closer to a state of factor price equalization

conjoint analysis of industry location preferences evidence from the softwood lumber industry in the us conjoint analysis ca was used to study location preferences among members of the softwood lumber industry in the southern and western regions of the us this industry was selected as an example of a resource based industry to test several hypotheses derived from location theory decision makers owners and managers identified price of logs and distance to sources for logs as the most important location factors a secondary category included wages and energy costs other variables such as cost of land quality of access roads and distance to markets are less important there were statistically significant differences in the part worth estimates of raw materials and wage costs among decision makers but not between regions in an ordered model for site preference marginal analysis of the price of logs stressed its importance as the major location factor in the softwood lumber industry

resource security competition for global resources strategic intent and governments as owners we develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms results suggest that owners of firms can shape the intent of resource acquisitions specifically state owned enterprises soes tend to acquire and pay more for resources for exploration rather than exploitation this is because soes owners governments are most concerned with securing their country s future we contribute to the literature by suggesting that ownership influences resource acquisitions that resource security is of importance to multinational enterprises and that soes invest abroad to safeguard both their own and their home countries future

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

adjusting for cultural differences in international benefit transfer values for non market goods can be expected to be sensitive to variations in the cultural contexts of beneficiaries however little progress has been made to date in adapting benefit transfer bt procedures for cultural variations using information from a study that ranked 62 societies with respect to nine attributes of their cultures we develop an index that is then used to re weight multiple coastal ecosystem service value estimates we examine whether these culturally adjusted bt estimates are statistically different than simply transferring the income adjusted mean transfer estimates for each coastal ecosystem service from international study sites to the policy site we find that once differences in income levels have been accounted for the differences in cultural dimensions between study and policy sites actually have little impact on the magnitude of our transfer estimates this is not a surprising result given that the majority of the study site estimates are derived from countries that share many ethnic linguistic and other cultural similarities to the policy site however benefit adjustments based on cultural factors could have a much higher impacts in settings different to that investigated here

a dynamic specific factors model of international trade in a dynamic economy land and capital serve not only as factors of production but as assets which individuals use to transfer income from working periods to retirement changes in the terms of trade and in the endowments of fixed factors do not necessarily have the same effects on factor prices and on the composition of output as they do in a static framework changes in these variables affect both total savings and the amount of savings that is diverted toward investment in capital results derived from the traditional specific factors model are more likely to emerge when the sector using land as a factor of production has a higher labor share than the sector using capital in this case the land using sector dominates factor markets more than asset markets once the roles for land and capital as assets are recognized the possibility of natural resource booms that reduce steady state welfare arises at the same time an increase in population can raise steady state welfare

the theory of the firm as governance structure from choice to contract the propositions that organization matters and that it is susceptible to analysis were long greeted by skepticism by economists one reason why this message took a long time to register is that it is much easier to say that organization matters than it is to show how and why the prevalence of the science of choice approach to economics has also been an obstacle as developed herein the lessons of organization theory for economics are both different and more consequential when examined through the lens of contract this paper examines economic organization from a science of contract perspective with special emphasis on the theory of the firm

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

income distribution development and foreign trade a cross sectional analysis abstract this paper analyses cross sectional evidence on income inequality in developing countries within a consistent theoretical framework where the major explanatory variables are factor endowments their ownership structure and foreign trade distortions the resulting explanation of cross country differences in income distribution is considerably better than what is found in the existing literature endowments in mineral resources land concentration in agricultural exports trade protection and secondary schooling are shown to be major determinants of differences in income inequality across developing countries

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

income distribution in the dynamic two factor trade model the issue of the effects of trade on personal income distribution has remained largely unexamined this paper describes an overlapping generations 2 x 2 model with a bequest motive and heterogeneous agents in order to examine the problem in this dynamic setting trade leads to both short run and long run reductions increases in inequality in labor capital abundant countries if the investment good is capital intensive if the consumption good is capital intensive the short run effects continue to hold but the long run effects are ambiguous copyright 1992 by the london school of economics and political science

who is afraid of political risk multinational firms and their choice of capital structure this paper investigates how multinational firms choose the capital structure of their foreign affiliates in response to political risk we focus on two choice variables the leverage and the ownership structure of the foreign affiliate and we distinguish different types of political risk such as expropriation unreliable intellectual property rights and confiscatory taxation in our theoretical analysis we find that as political risk increases the ownership share tends to decrease whereas leverage can both increase or decrease depending on the type of political risk using the microdatabase direct investment of the deutsche bundesbank we find supportive evidence for these different effects

risk bearing and the theory of income distribution this paper develops the stochastic theory of distribution with a dynamic model which focuses on the role of incomplete insurance in generating inequality unlike previous work our approach takes explicit account of the reason for market incompleteness in modeling agents behaviour in particular the amount of risk borne is endogenous using a model of growth with altruism in which agents are risk averse and there is moral hazard we show that lineage wealth follows a markov process which converges globally to an ergodic distribution this also represents the long run population distribution of wealth we discuss the role of particular assumptions such as availability of production loans and unboundedness of utility in yielding the qualitative properties of the distribution of wealth the choice of occupation and the prevention of poverty traps