a note on the malmquist productivity index in recent years the malmquist index has gained in popularity as a measure of productivity change we demonstrate that in the presence of non constant returns to scale the malmquist productivity index does not accurately measure productivity change the bias is systematic and depends on the magnitude of scale economies

investor valuation of the abandonment option abstract we investigate whether investors price the option to abandon a firm at its exit value theory prices this real option as an american put with both a stochastic strike price exit value and a stochastic value of the underlying security the value of cash flows the empirical implications are that firm value increases in exit value after controlling for expected going concern cash flows and that more generalizable assets produce more abandonment option value using discounted earnings forecasts to proxy for expected cash flows and prior literature to categorize asset generalizability we find strong support for the predictions of abandonment option theory

changes in the value relevance of earnings and book values over the past forty years this paper investigates systematic changes in the value relevance of earnings and book values over time we report three primary findings first contrary to claims in the professional literature the combined value relevance of earnings and book values has not declined over the past forty years and in fact appears to have increased slightly second while the incremental value relevance of bottom line earnings has declined it has been replaced by increasing value relevance of book values finally much of the shift in value relevance fiom earnings to book values can be explained by the increasing frequency and magnitude of one time items the increasing frequency of negative earnings and changes in average firm size and intangible intensity across time

electricity supply employment and real gdp in india evidence from cointegration and granger causality tests abstract this study probes nexus between electricity supply employment and real gdp for india within a multivariate framework using autoregressive distributed lag ardl bounds testing approach of cointegration long run equilibrium relationship has been established among these variables for the time span 1970 71 to 2005 06 the study further establishes long and short run granger causality running from real gdp and electricity supply to employment without any feedback effect thus growth in real gdp and electricity supply are responsible for the high level of employment in india the absence of causality running from electricity supply to real gdp implies that electricity demand and supply side measures can be adopted to reduce the wastage of electricity which would not affect future economic growth of india

is the long run relationship between economic growth electricity consumption carbon dioxide emissions and financial development in gulf cooperation council countries robust the relationship between carbon dioxide emissions economic growth electricity consumption and financial development in the gulf cooperation council gcc countries is investigated in this study using panel data for the period of 1980 2012 a number of econometric techniques dynamic ordinary least squares dols fully modified ordinary least squares fmols and the dynamic fixed effect model dfe are applied in order to estimate the long run relationship between the variables the long run relationship is found to be robust across these different econometric specifications no significant short run significant relationship was observed electricity consumption and economic growth have a positive long run relationship with carbon dioxide co2 emissions whilst a negative and significant relationship was found between co2 emissions and financial development the findings imply that electricity consumption and economic growth stimulate co2 emissions in gcc countries while financial development reduces it granger causality results reveal that there is a bidirectional causal link between economic growth and co2 emissions and a unidirectional causal link running from electricity consumption to co2 emissions however there is no causal link between financial development and co2 emissions also impulse response and variance decomposition analysis outline forecasted impacts of economic growth and electricity consumption on future co2 emissions

electricity consumption real gdp causality nexus evidence from a bootstrapped causality test for 30 oecd countries the goal of this paper is to examine any causal effects between electricity consumption and real gdp for 30 oecd countries we use a bootstrapped causality testing approach and unravel evidence in favour of electricity consumption causing real gdp in australia iceland italy the slovak republic the czech republic korea portugal and the uk the implication is that electricity conservation policies will negatively impact real gdp in these countries however for the rest of the 22 countries our findings suggest that electricity conversation policies will not affect real gdp

market exit through divestment the effect of accounting bias on competition we analyze the effect of accounting bias on the competition and market structure of an industry in our model firms interim accounting reports on investment projects may contain bias introduced by the mandatory accounting system we find that this bias strictly decreases firms profits when investors do not have an abandonment option but different results emerge when we allow the investors to divest in the interim specifically a conservative accounting regime may increase the likelihood of projects being discontinued inducing some firms to exit from the product market and leaving rivals to capture their market share a conservative regime can thus soften market competition and result in ex ante higher investment payoff higher consumer surplus and higher total social welfare since industries often have common reporting standards we also identify the degrees of industry wide accounting bias that maximize the expected investor payoffs finally we allow for investors to coordinate their divestment

disaggregated energy consumption and gdp in taiwan a threshold co integration analysis abstract energy consumption growth is much higher than economic growth for taiwan in recent years worsening its energy efficiency this paper provides a solid explanation by examining the equilibrium relationship between gdp and disaggregated energy consumption under a non linear framework the threshold co integration test developed with asymmetric dynamic adjusting processes proposed by hansen and seo hansen b e seo b 2002 testing for two regime threshold cointegration in vector error correction models journal of econometrics 110 293 318 is applied non linear co integrations between gdp and disaggregated energy consumptions are confirmed except for oil consumption the two regime vector error correction models vecm show that the adjustment process of energy consumption toward equilibrium is highly persistent when an appropriately threshold is reached there is mean reverting behavior when the threshold is reached making aggregate and disaggregated energy consumptions grow faster than gdp in taiwan

electricity consumption and economic growth in the gcc countries panel data analysis applying recent advances in panel data analysis we investigate the relationship between electricity consumption and economic growth in the gcc countries using annual data from 1975 to 2012 within a framework which takes into consideration dynamics heterogeneity and cross sectional dependence in the panel we show that the results obtained from using the pmge demeaned pmg amg mge and dfe models indicate a long run equilibrium relationship between electricity consumption and economic growth in order to determine the appropriate model and decide the preferred estimator the hausman test was performed the pmge model emerged as the most efficient of the three estimators also the results obtained revealed a bi directional causality between economic growth and electricity consumption in these countries which supports the feedback hypothesis as a result this implies that if these countries adopt or implement any energy or electricity conservation policies this may have a negative impact on its economic growth

electricity consumption and economic growth exploring panel specific differences abstract in this paper we examine the long and short run dynamics between electricity consumption and economic activities using panel data of per capita electricity consumption and per capita gdp of 160 countries for the period of 1980 2010 accounting for the degree of electricity dependence and the level of urbanization furthermore in order to capture the differences in this relationship the full sample is divided into various subsamples based on countries income levels regional locations and oecd memberships this framework is argued and found to be appropriate since the causal links and inferences arising therefrom differ considerably among the subsamples which led us to conclude that the electricity growth nexus is highly sensitive to regional differences countries income levels urbanization rates and supply risks

sunk costs uncertainty and market exit a real options perspective in this article we examine whether the option value of keeping an operation alive will deter firms from exiting an industry we find that uncertainty dissuades firms from exiting an industry but only when the sunk costs of entering and exiting that industry are sizeable moreover we argue and find that sunk costs can be influenced by the technological intensity of an industry by the extent to which a firm competes on the basis of innovation and by the firm s diversification strategy copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

electricity consumption and economic growth in seven south american countries abstract this paper attempts to investigate the causal relationship between electricity consumption and economic growth among seven south american countries namely argentina brazil chile columbia ecuador peru and venezuela using widely accepted time series techniques for the period 1975 2006 the results indicate that the causal nexus between electricity consumption and economic growth varies across countries there is a unidirectional short run causality from electricity consumption to real gdp for argentina brazil chile columbia and ecuador this means that an increase in electricity consumption directly affects economic growth in those countries in venezuela there is a bidirectional causality between electricity consumption and economic growth this implies that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in that country however no causal relationships exist in peru the documented evidence from seven south american countries can provide useful information for each government with regard to energy and growth policy

valuing flexibility as a complex option this paper develops an approach for valuing flexible production systems using contingent claims pricing demand curves for our model s underlying assets output products may be downward sloping in contrast with the standard option pricing assumption also our marginal production exercise costs may be increasing in addition we allow for multiple products and a production capacity constraint these elements of the model result in complex exercise decisions for the contingent claims which comprise the production system s value we illustrate our approach by valuing a flexible system that produces two products which have profit margin functions with stochastic parameters

the effects of policy uncertainty on investment evidence from the unexpected acceptance of a far reaching referendum in switzerland abstract does increased economic policy uncertainty dampen investment of firms we provide direct evidence on this question by examining the effects of an unexpectedly accepted and far reaching referendum in switzerland in february 2014 the outcome put several economically relevant agreements between switzerland and its main trading partner the european union at stake using firm level panel data covering the 2009 2015 period and data from two special surveys levied shortly after the vote we examine how the induced policy uncertainty affected investment of swiss firms our difference in differences in differences estimations and complementary survey results give strong evidence that the uncertainty caused by the vote dampened as theoretically expected investment of exposed firms with irreversible investment by as much as one quarter in the two years following the vote exposed firms that can reverse investment appear rather to increase investment in the year after the vote our survey evidence suggests that these firms engage in investment to streamline their production

specialization productivity and financing constraints we analyze optimal financial contracts when the specificity of investments is endogenous specialization decreases the liquidation value of assets but improves the asset s long term productivity while the former is known to make financing more difficult we show that the latter can ease financing constraints and increase financing capacity by improving an entrepreneur s incentive to repay the overall impact of specialization on the terms of financing depends on which effect is more important specialization decisions interact with the nature of investments their timing the need for outside financing and an entrepreneur s ability to commit to a level of specialization the author 2013 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

options on the minimum or the maximum of two risky assets analysis and applications this paper provides analytical formulas for european put and call options on the minimum or the maximum of two risky assets the properties of these formulas are discussed in detail options on the minimum or the maximum of two risky assets are useful to price a wide variety of contingent claims of interest to financial economists applications discussed in this paper include the valuation of foreign currency debt option bonds compensation plans risk sharing contracts secured debt and growth opportunities involving mutually exclusive investments

the electricity consumption versus economic growth of the polish economy abstract the aim of this contribution is an investigation of causal interdependences between electricity consumption and gdp in poland our research was conducted for total electricity consumption as well as for the industrial consumption of electricity in order to reflect the causality between gdp and electricity consumption properly we performed our investigations in a three dimensional framework with employment chosen as an additional variable we used reliable quarterly data from the period q1 2000 q4 2009 in order to check the stability of the causalities the investigations were performed on two samples a full sample and a pre crisis i e q1 2000 q3 2008 subsample we applied both traditional methods and some recently developed econometric tools we found feedback between total electricity consumption and gdp as well as between total electricity consumption and employment we also found unidirectional causality running from industrial electricity consumption to employment and no direct causal links between industrial electricity consumption and gdp in addition all these findings were in general not seriously affected by the financial and economic crises of 2008 a significant exception is the causal effect of industrial electricity consumption on employment which was more pronounced after the crisis of 2008

the information content of losses abstract this study hypothesizes that because shareholders have a liquidation option losses are not expected to perpetuate they are thus less informative than profits about the firm s future prospects the results are consistent with the hypothesis they also show that the documented increase in the earnings response coefficent as the cumulation period increases appears to be due exclusively to the effect of losses the liquidation option effect extends to profitable cases where earnings are low enough to make the option attractive alternating explanations for the low informativeness of losses such as mean reversal of earnings are not supported by the tests

real flexibility and financial structure an empirical analysis i examine the empirical relation between real flexibility and financial structure i test whether real flexibility increases debt capacity by lowering default risk and making assets more marketable or decreases debt capacity by facilitating risk shifting and asset substitution i measure real flexibility as the sensitivity of marginal production and investment decisions to variations in the economic environment i find that financial leverage is negatively related to production flexibility but positively related to investment flexibility this split in results suggests that although asset substitution facilitated by investment flexibility can be prevented contractually risk shifting facilitated by production flexibility is intractable copyright 2003 oxford university press

cross border banking credit access and the financial crisis abstract we study the sensitivity of credit supply to bank financial conditions in 16 emerging european countries before and during the financial crisis we use survey data on 10 701 applicant and non applicant firms that enable us to disentangle effects driven by positive and negative shocks to the banking system from demand shocks that may vary across lenders we find strong evidence that firms access to credit was affected by changes in the financial conditions of their banks during the crisis firms were more credit constrained if they were dealing with banks that experienced a decline in equity and tier 1 capital as well as losses on financial assets we also find that access to credit reflects the balance sheet conditions of foreign parent banks the effect of positive and negative shocks to a bank is greater for riskier firms and firms with fewer tangible assets

accounting information capital investment decisions and equity valuation theory and empirical implications this paper develops a theoretical model to reexamine the roles of earnings and book value for equity valuation and to explore cross sectional differences in the properties of the valuation function ohlson 1995 and feltham and ohlson 1995 1996 show that assuming the clean surplus relation and a specific linear information dynamic equity value can be represented as a linear function of earnings and book value however recent empirical evidence indicates linear valuation functions do not fully capture the effects of earnings and book value on equity value for instance burgstahler and dichev 1997 find the valuation impact of either earnings or book value depends on the levels of these two variables and the valuation function is convex not linear similarly hayn 1995 and collins pincus and xie 1999 report that the valuation effect of earnings is asymmetric between positive and negative earnings also as collins pincus and xie 1999 show the relative and the incremental importance of earnings versus book value in explaining equity

the articulation of price earnings ratios and market to book ratios and the evaluation of growth this paper interprets the price earnings ratio pie and the marketto book ratio pib and describes how they articulate it also describes the role of book rate of return on equity the ratio of their denominators in the determination of the ratios and the relation between them although both are reported regularly there is not a common understanding of these issues for example the pie ratio has been interpreted as an earnings growth indicator cragg and malkiel 1982 and litzenberger and rao 1971 a risk measure ball 1978 and an earnings capitalization rate graham dodd and cottle 1962 boatsman and baskin 1981 and alford 1992 derivations based on the gordon 1962 model describe it as determined by return on equity beaver and morse 1978 show that this ratio indicates transitory earnings the molodovsky effect from molodovsky 1953 it has also been interpreted as an indicator of mispriced stocks basu 1977 and jaffee keim and westerfield 1989 and as a product of accounting principles craig johnson and joy 1987 the p b ratio received less academic attention until fama and french 1992 traditionally it was interpreted as indicating expected return on equity see for example graham dodd and cottle 1962 this interpretation is given expression in the standard formula reconciling price to book value in preinreich 1938 edwards and bell 1961 and peasnell 1982 for example like pie p b has been modeled as a growth

electricity consumption and economic growth a time series experience for 17 african countries abstract while the availability of electricity by itself is not a panacea for the economic and social problems facing africa the supply of electricity is nevertheless believed to be a necessary requirement for africa s economic and social development this paper tests the long run and causal relationship between electricity consumption per capita and real gross domestic product gdp per capita for 17 african countries for the period 1971 2001 using a newly developed cointegration test proposed by pesaran et al 2001 and using a modified version of the granger causality test due to toda and yamamoto 1995 the advantage of using these two approaches is that they both avoid the pre testing bias associated with conventional unit root and cointegration tests the empirical evidence shows that there was a long run relationship between electricity consumption per capita and real gdp per capita for only 9 countries and granger causality for only 12 countries for 6 countries there was a positive uni directional causality running from real gdp per capita to electricity consumption per capita an opposite causality for 3 countries and bi directional causality for the remaining 3 countries the result should however be interpreted with care as electricity consumption accounts for less than 4 of total energy consumption in africa and only grid supplied electricity is taken into account

the nexus of electricity consumption economic growth and co2 emissions in the brics countries abstract this study reexamines the causal link between electricity consumption economic growth and co 2 emissions in the brics countries i e brazil russia india china and south africa for the period 1990 2010 using panel causality analysis accounting for dependency and heterogeneity across countries regarding the electricity gdp nexus the empirical results support evidence on the feedback hypothesis for russia and the conservation hypothesis for south africa however a neutrality hypothesis holds for brazil india and china indicating neither electricity consumption nor economic growth is sensitive to each other in these three countries regarding the gdp co 2 emissions nexus a feedback hypothesis for russia a one way granger causality running from gdp to co 2 emissions in south africa and reverse relationship from co 2 emissions to gdp in brazil is found there is no evidence of granger causality between gdp and co 2 emissions in india and china furthermore electricity consumption is found to granger cause co 2 emissions in india while there is no granger causality between electricity consumption and co 2 emissions in brazil russia china and south africa therefore the differing results for the brics countries imply that policies cannot be uniformly implemented as they will have different effects in each of the brics countries under study

real option value and random jumps application of a simulation model this article studies how sensitive real option valuations are to incorrect assumptions about the stochastic process followed by the state variables we design a valuation model which combines monte carlo simulation and dynamic programming and provides an appropriate framework to evaluate the effect of estimation errors on both the value of real options and their critical frontier although the model is flexible enough to value american type options contingent on a wide range of stochastic processes we focus on the analysis of the effect of stochastic jumps we apply our model to the valuation of an investment in the car parts industry documented in previous literature our results clearly show that underestimating this type of jumps might lead to substantial misjudgements in a firm s decision making processes for instance it may lead to profitable projects being rejected when jump diffusion is low or negative expanded net present value projects being accepted

rational pricing of internet companies we apply real options theory and capital budgeting techniques to the problem of valuing an internet company we formulate the model in continuous time form a discrete time approximation estimate the model parameters solve the model by simulation and then perform sensitivity analysis we report that depending on the parameters chosen the value of an internet stock may be rational if growth rates in revenues are high enough even with a real chance that a company may go bankrupt if the initial growth rates are sufficiently high and if this growth rate contains enough volatility over time then valuations can reach a level that would otherwise appear dramatically high in addition the valuation is highly sensitive to initial conditions and exact specification of the parameters which is consistent with observations that the returns of internet stocks have been strikingly volatile

is comprehensive income superior to net income as a measure of firm performance abstract with the exception of financial firms we find no evidence that comprehensive income is more strongly associated with returns market value or better predicts future cash flows income than net income moreover the only component of comprehensive income that improves the association between income and returns is the marketable securities adjustment our results do not support the claim that comprehensive income is a better measure of firm performance than net income our results also raise questions about the appropriateness of items included in sfas 130 comprehensive income as well as the need for mandating uniform comprehensive income disclosures for all industries

distress risk premia in expected stock and bond returns abstract prior studies find that shareholders strategic actions over debtholders are significant for stock prices but not for bond prices i find that for firms with private and public debt strategic default has no significant effect on distress risk premia in expected stock or bond returns suggesting that the dispersion of bondholders greatly weakens the shareholder advantage effect the shareholder advantage effect on stock prices is only significant for firms with only private debt and to some degree affected by the dispersion of stockholders and complexity in capital structure overall renegotiation friction helps explain the cross sectional implications of strategic default for stock and bond prices

does social trust affect international contracting evidence from foreign bond covenants abstract building on rational choice institutionalism theory and williamson s j econ lit 38 3 595 613 2000 four level social analysis framework we investigate the influence of the informal institution of social trust on debt contract design in an international setting using a sample of non u s firms that issue bonds in the u s debt market we find that yankee bond creditors impose fewer covenants on bond issuers domiciled in countries with a high degree of social trust we further show that the inverse relationship between debt covenants and the informal institution of social trust is more pronounced for firms from countries with weak formal institutions as well as for firms with poor corporate governance and greater information opacity these findings are robust to endogeneity tests within country analysis various empirical models and measures of trust and alternative hypotheses we also show that while a lower level of informal social trust is associated with higher borrowing costs this relationship weakens when formal covenants are added to the debt contract i e a substitution effect our paper contributes to the international business literature by providing new insights into the role of informal institutions social trust in cross border debt contracting

option valuation of claims on real assets the case of offshore petroleum leases this paper extends financial option theory by developing a methodology for the valuation of claims on a real asset an offshore petroleum lease several theoretical and practical problems not present in applying option pricing theory to financial assets are addressed most importantly we show the necessity of combining option pricing techniques with a model of equilibrium in the market for the underlying asset petroleum reserves the advantages of this approach over conventional discounted cash flow techniques are emphasized the methodological development provides important insights for both company behavior and government policy promising empirical results are reported

option value uncertainty and the investment decision the options based approach to studying irreversible investment under uncertainty emphasizes that the opportunity cost of investment includes the value of the option to wait that is extinguished when an investment is undertaken thus the investment decision is affected by the determinants of the value of this option we extend and generalize a standard model of irreversible investment by introducing a second fully reversible technology and also incorporate partial reversibility by allowing capital to be abandoned at a cost as in the existing literature we find that the threshold value of the underlying asset in our case demand at which investment takes place is increasing in the uncertainty of demand we also find that the value of the option and thus the threshold value of the option value multiple at which investment takes place may be either increasing or decreasing in the uncertainty of demand in addition we find that for the case in which capital is used to replace the reversible technology the threshold value of the option value multiple is insensitive to the degree of reversibility of capital

the determinants of stock price exposure financial engineering and the gold mining industry this paper studies the exposure of north american gold mining firms to changes in the price of gold the average mining stock moves 2 percent for each 1 percent change in gold prices but exposures vary considerably over time and across firms as predicted by valuation models gold firm exposures are significantly negatively related to the firm s hedging and diversification activities and to gold prices and gold return volatility and are positively related to firm leverage simple discounted cash flow models produce useful exposure predictions but they systematically overestimate exposures possibly due to their failure to reflect managerial flexibility

investment dynamics and earnings return properties a structural approach we propose the standard neoclassical model of investment under uncertainty with short run adjustment frictions as a benchmark for earnings return patterns absent accounting influences we show that our proposed benchmark generates a wide range of earnings return patterns documented in accounting research notably our model generates a concave earnings return relation similar to that of basu 1997 and predicts that the earnings return concavity increases with the volatility of firms underlying shock processes and decreases with the level of firms investments we find strong empirical support for these predictions overall our evidence suggests that our proposed benchmark is useful for understanding the joint dynamics of variables of interest to accounting research e g earnings returns investment market to book absent accounting influences a necessary precondition for inferring the effects of accounting from these dynamics

enlarging the contracting space collateral menus access to credit and economic activity recent reforms across eastern european countries have given more flexibility and information to parties to engage in secured debt transactions the menu of assets legally accepted as collateral was enlarged to include movable assets e g machinery and equipment generalized difference in differences tests show that firms operating more movable assets borrowed more as a result those firms also invested more hired more and became more efficient and profitable following the changes in the contracting environment the financial deepening we document triggered important reallocation effects firms affected by the reforms increased their share of fixed assets and employment in the economy

electricity consumption and economic growth in nigeria a revisit of the energy growth debate abstract this paper examines the dynamic causal linkages between electricity consumption and economic growth in nigeria within a trivariate vecm for the period 1971 2011 the paper obviates the variable omission bias and the use of cross sectional techniques that characterise most existing studies the results show that there is a distinct causal flow from electricity consumption to economic growth both in the short run and in the long run this finding supports the electricity led growth hypothesis that has been conjectured in the literature the paper urges policy makers in nigeria to implement policies which enhance the generation and consumption of electricity in order to engineer economic growth appropriate monetary policies must also be put in place in order to moderate inflation thus enhancing growth

electricity consumption and economic growth in transition countries a revisit using bootstrap panel granger causality analysis abstract the purpose of this paper is to revisit the granger causal relationship between electricity consumption and economic growth for 15 transition economies for the period 1975 2010 using a bootstrap panel causality approach that allows for both cross sectional dependency and for heterogeneity across countries applying this approach we found a unidirectional causality running from electricity consumption to economic growth only in belarus and bulgaria from economic growth to electricity consumption in the czech republic latvia lithuania and the russian federation bidirectional causality only in ukraine while no granger causality in any direction in albania macedonia moldova poland romania serbia slovak republic and slovenia these results show that there is a limited support for the electricity led growth hypothesis nevertheless these different findings provide important implications for energy strategies and policies for transition countries

the electricity consumption and economic growth nexus evidence from greece abstract this paper attempts to cast light into the relationship between electricity consumption and economic growth in greece in a multivariate framework for this purpose we used cointegration techniques and the vector error correction model in order to capture short run and long run dynamics over the sample period 1970 2011 the empirical results reveal that in the long run electricity demand appears to be price inelastic and income elastic while in the short run the relevant elasticities are below unity we also argue that the causal relationship between electricity consumption and economic growth in greece is bi directional our results strengthen the notion that greece is an energy dependent country and well directed energy conservation policies could even boost economic growth furthermore the implementation of renewable energy sources should provide significant benefits ensuring sufficient security of supply in the greek energy system this evidence can provide a new basis for discussion on the appropriate design and implementation of environmental and energy policies for greece and other medium sized economies with similar characteristics

electricity consumption from renewable and non renewable sources and economic growth evidence from latin american countries abstract this study explores the effect of renewable and non renewable electricity consumption on economic growth in 18 latin american countries to achieve the goal of this study a panel gross domestic product gdp model was constructed taking the period 1980 2010 into account from the pedroni cointegration test results it was found that renewable electricity consumption non renewable electricity consumption labor gross fixed capital formation and total trade are cointegrated moreover the panel dynamic ordinary least squares dols test results revealed that all above the mentioned variables have a long run positive effect on gdp growth in the investigated countries the vector error correction vec granger causality model results revealed the existence of feedback causality between the variables the results of the study indicated that renewable electricity consumption is more significant than non renewable electricity consumption in promoting economic growth in the investigated countries in the long run and the short run based on the results of this study it is recommended that the investigated countries should increase their investment on renewable energy projects to increase the role of electricity consumption from renewable sources in addition it is essential that these countries should reduce their non renewable electricity consumption by increasing their energy efficiency and implementing energy saving projects by applying these recommendations these countries would be able to mitigate global warming and reduce their dependency on fossil fuel to increase their energy security

acquisition premiums when investment banks invest their own money in the deals they advise and when they do not evidence from acquisitions of assets in the uk abstract this paper shows that investment banks that advise acquirers of assets negotiate favourable terms when they invest their own money in the deal but lead their clients to overpay when they do not have financial incentives acquirers pay the smallest premiums in divisional mbos when advised by the investment bank that finances the deal and the largest premiums in interfirm asset sales when advised by an investment bank remunerated contingent on deal completion premiums are in between the two extremes when acquirers do not use advisors these results are attributed to investment bank incentives which exacerbate the information asymmetry between buyers and sellers of assets

options on the maximum or the minimum of several assets using an intuitive approach that also provides new intuition concerning the black and scholes equation this paper extends the results of johnson and stulz to the pricing of options on the minimum or the maximum of several risky assets

economic growth and electricity consumption in former soviet republics abstract this study estimates the causal relationship between electricity consumption and economic growth with annual data for the commonwealth independent states countries in three groups of income levels empirical results reveal that electricity consumption and gdp are cointegrated for all these countries furthermore there is a unidirectional causality from electricity consumption to gdp for all groups in the long run effect of electricity consumption on the gdp is negative for the second group of countries which supports the energy conservation policies whereas it is positive for the first and third group of countries which supports the growth hypothesis

asymmetric timely loss recognition adverse shocks to external capital and underinvestment evidence from the collapse of the junk bond market abstract using the collapse of the junk bond market in the early 1990s as an exogenous shock to external capital i document in both difference in differences and triple difference designs that speculative grade firms that recognize economic losses in a timely manner experience a smaller reduction in investment following the collapse the effect is more pronounced for speculative grade firms with a low level of asset liquidation value using the excess bond premium as a proxy for fluctuations in the supply of capital i also extend the generalizability of my findings to a broader sample of 84 421 firm years over the 1972 2011 period

conflicts of interest and market illiquidity in bankruptcy auctions theory and tests i develop and estimate a model of cash auction bankruptcy using data on 205 swedish firms the results challenge arguments that cash auctions as compared to reorganizations are immune to conflicts of interest between claimholders but lead to inefficient liquidations i show that a sale of the assets back to incumbent management is a common bankruptcy outcome sale backs are more likely when they favor the bank at the expense of other creditors on the other hand inefficient liquidations are frequently avoided through sale backs when markets are illiquid that is when industry indebtedness is high and the firm has few nonspecific assets the problem of designing an efficient bankruptcy law has received considerable attention in the last decade much of the debate has centered around the optimality of two different stylized bankruptcy procedures cash auctions such as the u s chapter 7 code and structured bargaining represented by the u s chapter 11 reorganization code recently several european countries including france germany and great britain have changed their bankruptcy regulation by introducing reorganization procedures similar to chapter 11 at the same time the chapter 11 code has been criticized by academics including baird 1986 emphasizing that the bargaining procedure frequently results in long and wasteful negotiations these critics argue that chapter 11 should instead be replaced with a mandatory auction procedure other researchers such as aghion hart and moore 1992 and shleifer and vishny 1992 have pointed out that a cash auction is likely to suffer from considerable inefficiencies arising from transaction costs and market illiquidity the nature and costs of the chapter 11 procedure are

the significance of sell off profitability in explaining the market reaction to divestiture announcements abstract previous research on asset sales has emphasized the divestment motivation and the use of the proceeds from the sale as determinants of selling firm value gains in contrast this paper explores the extent to which the relevant information necessary to evaluate sell offs is embodied in the profitability of the sale i e the price received by the seller over the value in use of the divested assets where the latter is a function of past operating earnings and book value our empirical results show that sell off profitability is substantially more significant in explaining the market reaction to divestiture announcements than the previous literature has suggested we provide strong evidence of a positive relation between selling firm abnormal returns during sell off announcements and profit on the sale which remains significant after controlling for the motivation behind the sell off the use of the proceeds from the sale and the presence of agency costs of managerial discretion we conclude that sell off profitability explains a major portion of selling firm abnormal returns and is one of the most significant determinants of the market reaction to divestiture announcements

time to build option value and investment decisions abstract investment decisions and outlays are often made sequentially for example the rate at which construction proceeds is usually flexible and can be adjusted with the arrival of new information traditional discounted cash flow methods which treat the pattern of investment as fixed ignore this flexibility and understate the value of the project this paper uses contingent claims analysis to derive optimal decision rules and to value such investments we determine the effects of time to build opportunity cost and uncertainty on the investment decision for reasonable parameter values we show how a simple npv rule can lead to gross errors

why are losses less persistent than profits curtailments vs conservatism it is well documented that losses are less persistent than profits and that stock prices anticipate the lower persistence of losses yet the underlying explanation for these results is unclear one explanation lies in the abandonment option whereby firms with losses are more likely to curtail operations e g hayn hayn c 1995 the information content of losses j accounting econom 20 2 125 153 another explanation involves timely loss recognition stemming from conservative accounting e g basu basu s 1997 the conservatism principle and the asymmetric timeliness of earnings j accounting econom 24 1 3 37 we provide direct evidence that curtailments are an important factor contributing to the lower persistence of losses an implication of our results is that popular measures of conservatism such as the measure proposed by basu also reflect curtailments this paper was accepted by suraj srinivasan accounting