stock price reactions as surrogates for the net cash flow effects of corporate policy decisions abstract this paper adopts a rational market structure to examine the link between the cash flow effects of management policy decisions and the resulting stock price reactions the focus is on testing cross sectional associations between cash flow effects and the underlying characteristics of affected firms we find that it is not possible to infer the sign of association between the stock price reaction and any characteristics of the firm that are observable before management announces its decision our methodological suggestions involve exploiting either a priori assumptions or sample information about the probability distribution of unobservable decision variables underlying the management decision process

impacts of opec s political risk on the international crude oil prices an empirical analysis based on the svar models abstract the impacts of opec s political risk on the fluctuations of international crude oil prices have caused widespread concern and analyzing the impacts is of great significance to the investment decisions and risk aversion strategies in the crude oil markets therefore using the international country risk guide icrg index as a proxy for the countries political risk situation we empirically investigate the impacts of opec s political risk on the brent crude oil prices based on several structural vector autoregression svar models the main empirical results indicate that 1 the political risk of opec countries does have a significant and positive influence on brent crude oil prices in the sample period from january 1998 to september 2014 and the most significant positive influences appear in about one and a half year and last about a year 2 opec s integrated political risk contributes to 17 58 of the oil price fluctuations in the sample period which is only lesser than that of the oil demand shocks 34 64 3 compared with the political risk of opec countries in north africa and south america the political risk of opec countries in the middle east contributes most to the oil price fluctuations 4 among the eight components of the political risk in opec the internal conflicts contribute most to the oil price fluctuations in the sample period

management buyouts evidence on taxes as a source of value this paper estimates the value of tax benefits in 76 management buyouts of public companies completed in the period 1980 to 1986 the median value of tax benefits estimated at the time the buyout company goes private has a lower bound of 21 and an upper bound of 143 of the premium paid to pre buyout shareholders the estimated value depends on the rate buyout debt is repaid and the tax rate applied to the interest deductions the paper also presents evidence on the actual taxes paid and debt repayment rates by these companies after the buyout the results in this paper suggest that tax benefits are an important source of the wealth gains in management buyouts

does the bond market predict bankruptcy settlements this study shows the extent to which deviations from the absolute priority rule increase or decrease the bankruptcy emergence payoff to traded i e usually junior claimants bondholders the data indicate that on average bondholders benefit albeit slightly from absolute priority rule apr violations this paper also examines the degree to which the bond market in the bankruptcy filing month anticipates departures from the apr and other influences on the payoff to bondholders in other words we investigate the informational efficiency of the market for bankrupt bonds overall despite the complex and lengthy nature of bankruptcy proceedings the results support efficiency the finance literature has traditionally assumed that when a firm enters bankruptcy the creditors become the owners and the value of the firm is distributed according to the absolute priority rule apr the apr states that senior creditors should be fully compensated before junior creditors receive any portion of the bankrupt firm s value and junior creditors should receive full payment before shareholders receive any compensation in practice formal bankruptcy proceedings are complex processes that often violate the apr brown 1989 captures some of the intricacies of this process in a game theoretic model showing that the solution to the bargaining process in bankruptcy can involve deviations from the apr although the solution

empirical evidence on dividends as a signal of firm value the role of dividends in firm valuation continues to be a theoretical puzzle as well as an empirical obsession with economists the pioneering work by modigliani and miller mm 32 29 is the archetype of the theoretical dilemma whereas the authors proved convincingly the irrelevance of dividend policy to firm value within a perfect capital market they tempered their irrelevance proposition with what is usually referred to as the information content of dividends icd hypothesis in a more scientific sense this hypothesis should be labeled as a conjecture since it is essentially an ad hoc observation that dividends may convey information to the capital market concerning a firm s future earnings potential even though the icd hypothesis was not derived from a well specified economic model it has nevertheless been subjected to a plethora of empirical studies in general these studies have focused upon the precise influence of dividend changes upon a firm s common stock price overall the results can be described as being supportive of the notion that stock price movements are positively correlated with cash dividend changes this correlation of course is consistent with the icd hypothesis

the information content of security prices a second look abstract beaver lambert and morse 1980 employ a regression of percentage change in prices on percentage change in earnings in which data are grouped by the dependent variable reverse regression offers a more intuitive and direct way to assess the information content of security prices the objective of beaver et al while grouping is asymptotically equivalent reverse regression is a more efficient way of examining the incremental explanatory power of lagged values of percentage change in price with respect to accounting earnings

natural gas price effects in china based on the cge model abstract natural gas is a clean energy source with many benefits and its proportion in the energy consumption structure in china has been gradually increasing over the recent years since the price of natural gas in china has been controlled and maintained at a relatively low level by the government reforming the natural gas industry in china has been the matter of much attention in light of its macroeconomic effects on the overall economy using the computable general equilibrium model and the 2012 social accounting matrix the results show increases in natural gas prices lead to an increase in the consumer price index cpi and lead to reductions in gdp the chemical industry sector is strongly influenced by a natural gas price increase furthermore chemical fertilizer manufacturing industry and chemical products manufacturing have very significant effects in china therefore the government may gradually establish and improve the management of natural gas price to avoid negative effects and implement a differential price as the industries exhibit different levels of resistance in response to natural gas price changes

inflation and reputation in many macroeconomic models with rational expectations optimal policy is time inconsistent and therefore announced policy may not be credible this paper models the government s credibility explicitly using kreps and wilson s analysis time consistent optimal government policy emerges as a sequential equilibrium in a repeated game this policy is at least as good as the inconsistent optimal policy and dominates the consistent policy when reputational effects are ignored thus the analysis resolves the problem of specifying a credible optimal policy in such models the results show why attempts to disinflate may lead to recession even with perfectly flexible prices this abstract was borrowed from another version of this item

energy consumption carbon emissions and economic growth in saudi arabia an aggregate and disaggregate analysis the objective of this study is to examine the relationship among economic growth carbon emissions and energy consumption at the aggregate and disaggregate levels for the aggregate energy consumption model we use total energy consumption per capita and co2 emissions per capita based on the total energy consumption for the disaggregate analysis we used oil gas and electricity consumption models along with their respective co2 emissions the long term income elasticities of carbon emissions in three of the four models are positive and higher than their estimated short term income elasticities these results suggest that carbon emissions increase with the increase in per capita income which supports the belief that there is a monotonically increasing relationship between per capita carbon emissions and per capita income for the aggregate model and for the oil and electricity consumption models the long and short term income elasticities of carbon emissions are negative for the gas consumption model this result indicates that if the saudi arabian economy switched from oil to gas consumption then an increase in per capita income would reduce carbon emissions the results also suggest that electricity is less polluting than other sources of energy

a comparison of three institutions for monetary policy when central bankers have private objectives how do different institutional arrangements for the central bank perform when central bankers have private objectives and society objectives vary with time this paper evaluates three benchmark monetary institutions from a constitutional perspective i a contract with an inflation or monetary target announcement ii an inflation rule and iii the laissez faire policy i e the absence of any contractual arrangement at the stage of institutional choice there is uncertainty about both society s mean inflation target and the central banker s future inflation target a target announcement reveals the type of the central banker and solves the credibility vs flexibility trade off but it can not prevent that the central banker follows private objectives the announcement based contract is the optimal institution if i the initial uncertainty about the central banker s objectives is small and ii if unemployment is sufficiently high

event risk covenants and bondholder returns in leveraged buyouts abstract prebuyout bondholders on average suffer statistically significant wealth losses in leveraged buyouts bonds with strong covenant protection however gain value while those with no protection lose value the disposition of bonds after buyouts e g remained outstanding called tendered defeased is also strongly linked to type of covenant protection we also document that covenant use declines for bonds issued after 1980 finally the losses to bondholders are small compared with the gains accruing to shareholders

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

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

why is electricity consumption inconsistent with economic growth in china studies have indicated that there exists a relatively stable and positive correlation between electricity consumption and economic growth and there should not be a large deviation between them however the deviation between electricity consumption and economic growth in china during the asian financial crisis and global economic crisis sparks intense debates we attempt to explain the deviation from the perspective of inventory investment adjustment in the business cycle using the svar model in this paper the results show that the effects of inventory investment adjustment shock and electricity consumption structure shock on the deviation are positive but tend to be negative for electricity efficiency shock the results of historical decomposition of these shocks also show that the inventory investment adjustment shock is the main factor that influences the deviation during the global economic crisis economic fluctuation in the short term can not change the economic development pattern and the characteristics of electricity demand once the economy returns to stable growth the deviation between electricity consumption and economic growth will shrink and disappear soon

security analyst superiority relative to univariate time series models in forecasting quarterly earnings abstract this paper provides evidence of security analyst sa superiority relative to univariate time series ts models in predicting firms quarterly earnings numbers and shows that sa forecast superiority in our sample is attributable to 1 better utilization of information existing on the date that ts model forecasts can be initiated a contemporaneous advantage and 2 use of information acquired between the date of initiation of ts model forecasts and the date when sa forecasts are published a timing advantage

ghanaian energy economy inter production factors and energy substitution abstract industries in ghana depend highly on petroleum to fuel their operations which has brought immerse environmental threat from greenhouse emission gas ghg this study tried to investigate potential substitutability of factor inputs and fuel inputs among capital labor petroleum and electricity in ghana by adopting the translog production and cost function approach we used ridge regression technique to estimate the parameters after our data show possibility of multicollinearity our result shows that all inputs are substitutes with their relative technological progress also showing evidence of convergence this suggests that redirecting resources into the improvement of technology towards cleaner energy production like electricity will be a success over time and this will mean that the fueling of the economy will be done in a cleaner environment and mitigating mitigate co2 emissions as well the improvement of electricity production and the promotion of its use require government policies that will enable industries to adjust to the switch from one input to the other through capital subsidies and tax rebates also energy labor and capital energy being substitutes in our findings suggest that removal of all energy subsidies will reduce the use of energy and increase capital and labor intensiveness input switch by industries will promote merger of smaller firms with bigger firms that have cost advantage during the switch period and requires a clear government merger control policies in a nutshell our findings provide an insight into policies to promote the use of renewable energy energy intensity and merger policies

an analysis of stock price reaction to management change in distressed firms abstract this study analyzes excess returns to shareholders at announcement of a change in senior management of distressed firms excess returns are significantly positive which is consistent with the internal corporate control hypothesis that management change following poor performance is associated with gains to shareholders cross sectional tests of the effects reveal a significant title effect and significant interactions between title and appointment of an outside successor and title and firm size these findings present new insights into the circumstances in which external vs internal markets for managers will affect shareholder wealth

the valuation impacts of specially designated dividends this paper examines the valuation impacts of specially designated dividends sdds by analyzing the behavior of stock and bond prices on dates surrounding their announcements the evidence presented here suggests that sdds are considered positive signals by the market with most of the gains associated with their announcements accruing to stockholders in addition we present some evidence that the gain to stockholders is negatively related to the frequency of sdd announcements

impacts of shifting china s final energy consumption to electricity on co2 emission reduction abstract electrification is advocated by both academics and the chinese government to control air pollution and promote productivity however the problem remains to be solved of how to achieve the trade off between reducing co 2 emissions and maintaining economic growth when switching from various fuels to electricity under the policy support in view of this after analyzing the effects of exogenous shocks in various fuel demands based on impulse response functions of several vector autoregression models this paper measures the current and long term impacts of electrification on gdp and co 2 emissions finally some typical cases of replacement of fossil fueled appliances by electrical counterparts encouraged by the government are assessed the main findings are 1 almost all of the exogenous shocks in fuel demands have positive effects on both gdp and co 2 emissions while the gas shock has a slightly negative effect on gdp 2 carbon intensity decreases and even co 2 emission reductions with increased gdp are potentially achieved in both current and permanent periods for coal electricity and oil electricity switching while gas electricity switching is not a wise choice in view of co 2 emission reduction in the long run 3 the alternative electric appliances for electrification have very different impacts on co 2 emission reduction

ceo turnover and bondholder wealth abstract we examine the impact of ceo turnover announcements on bondholder wealth stockholder wealth and overall firm value using publicly traded data for the period from 1973 to 2000 we find evidence consistent with both the wealth transfer and signaling hypotheses specifically we find that ceo turnover events are associated with lower bondholder values higher stockholder values and that net changes in firm value are a function of turnover type forced vs voluntary and outside vs inside firm replacements and the riskiness of the firm s debt investment vs non investment grade overall the results contribute to the understanding of the effects of corporate governance mechanisms of which ceo turnover is an extreme form on bondholders

bond and stock market response to unexpected earnings announcements this study examines whether earnings changes convey information in bond markets and finds a significant positive negative reaction to unexpected earnings increases decreases the results are consistent whether earnings announcements precede or follow dividend announcements thus earnings surprises convey information to bond markets and changes in firm value are split among bondholders and stockholders this is in contrast to evidence from studies examining unexpected dividend announcements where bond price reaction is asymmetric cross sectional analysis reveals that bond excess returns are positively related to earnings surprises i introduction stock market reaction to earnings announcements has received significant attention in the finance and accounting literature ball and brown 1968 brown 1978 watts 1978 aharony and swary 1980 and fried and givoly 1982 are some ofthe studies that observe a revision of stock prices associated with the release of earnings information lev 1989 provides a survey of research in this area the explanation for the above empirical findings is that unexpected earnings provide new information about future cash flows furthermore the classical discounted cash flow model predicts a revision in firm value that is the present value of expected future cash flows whether this increased firm value accrues to stockholders and bondholders is an empirical issue past research on the information content of earnings has focused solely on stock price behavior and finds at least part of the benefits accrue to stockholders in this study we examine the bond market reaction to unexpected quarterly earnings announcements the study is unique for several reasons first dividends repurchases and earnings are eonsidered primary mechanisms used by manage ment to convey information about future cash flows to securityholders recent

decomposition of co2 emissions change from energy consumption in brazil challenges and policy implications this study evaluates the changes in co2 emissions from energy consumption in brazil for the period 1970 2009 emissions are decomposed into production and consumption activities allowing computing the full set of energy sources consumed in the country this study aims to develop a comprehensive and updated picture of the underlying determinants of emissions change from energy consumption in brazil along the last four decades including for the first time the recently released data for 2009 results demonstrate that economic activity and demographic pressure are the leading forces explaining emission increase on the other hand carbon intensity reductions and diversification of energy mix towards cleaner sources are the main factors contributing to emission mitigation which are also the driving factors responsible for the observed decoupling between co2 emissions and economic growth after 2004 the cyclical patterns of energy intensity and economy structure are associated to both increments and mitigation on total emission change depending on the interval the evidences demonstrate that brazilian efforts to reduce emissions are concentrated on energy mix diversification and carbon intensity control while technology intensive alternatives like energy intensity has not demonstrated relevant progress residential sector displays a marginal weight in the total emission change

financial development and energy consumption in central and eastern european frontier economies this study examines the impact of financial development on energy consumption in a sample of 9 central and eastern european frontier economies several different measures of financial development are examined including bank related variables and stock market variables the empirical results obtained from dynamic panel demand models show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using banking variables like deposit money bank assets to gdp financial system deposits to gdp or liquid liabilities to gdp of the three stock market variables investigated only one stock market turnover has a positive and statistically significant impact on energy consumption both short run and long run elasticities are presented the implications of these results for energy policy are discussed

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

product market competition and the cost of bank loans evidence from state antitakeover laws abstract the extant literature documents a positive relationship between a firm s takeover vulnerability and its agency cost of debt using state antitakeover laws as an exogenous measure of variation in takeover vulnerability i investigate whether product market competition has a disciplinary effect that can lower a firm s cost of bank loans after taking into account the industry composition of borrowers i find that banks charge higher spreads to borrowers that are vulnerable to takeovers but only in concentrated industries in the absence of disciplinary competitive pressure the effect of takeover vulnerability on the cost of bank loans is mitigated for larger firms firms followed by analysts firms with existing credit ratings non family firms and for borrowers with shorter maturity loans or loans with covenants and collateral in place taken together the results suggest that the effect of governance on the cost of financing is not homogenous across all industries and that concentrated industry firms may need to use supplementary governance mechanisms to mitigate debt holder agency problems

do economic financial and institutional developments matter for environmental degradation evidence from transitional economies abstract several studies have examined the relationship between environmental degradation and economic growth however most of them did not take into account financial developments and institutional quality moreover stern stern d 2004 the rise and fall of the environmental kuznets curve world development 32 8 1419 1439 noted that there are important econometric weaknesses in the earlier studies such as endogeneity heteroscedasticity omitted variables etc the purpose of this paper is to fill this gap in the literature by investigating the linkage between not only economic development and environmental quality but also financial development and institutional quality we employ the standard reduced form modelling approach to control for country specific unobserved heterogeneity and gmm estimation to control for endogeneity our study considers 24 transition economies and panel data for 1993 2004 our results support the ekc hypothesis while confirming the importance of both institutional quality and financial development for environmental performance we also found that financial liberalization may be harmful for environmental quality if it is not accomplished in a strong institutional framework

are energy conservation policies effective without harming economic growth in the gulf cooperation council countries abstract this study explores the fossil fuels electricity consumption growth of the gross domestic product gdp relationship in the six gulf cooperation council gcc countries for the period 1980 2012 the aim of this study is to examine whether energy conservation policies are appropriate for these countries to reduce their high levels of electricity consumption the autoregressive distributed lag ardl and the toda yamamoto dolado lutkepohl tydl methodologies were employed to investigate this relationship the ardl results revealed that fossil fuels electricity consumption has a long run positive effect on gdp growth in the gcc countries however the tydl granger causality revealed different causality relationships among the countries a bi directional causality was found between fossil fuels electricity consumption and gdp growth in bahrain and the united arab emirates uae while one way causality from fossil fuels electricity consumption to gdp growth was found in oman and qatar on the other hand no causality was concluded between the variables in kuwait and saudi arabia from the results it is clear that energy conservation is not an ideal policy for the bahrain uae oman and qatar because it will have a negative consequence on their output however this policy can be implemented in kuwait and saudi arabia since it will not harm their output

energy consumption and economic growth evidence from china at both aggregated and disaggregated levels using a neo classical aggregate production model where capital labor and energy are treated as separate inputs this paper tests for the existence and direction of causality between output growth and energy use in china at both aggregated total energy and disaggregated levels as coal oil and electricity consumption using the johansen cointegration technique the empirical findings indicate that there exists long run cointegration among output labor capital and energy use in china at both aggregated and all three disaggregated levels then using a vec specification the short run dynamics of the interested variables are tested indicating that there exists granger causality running from electricity and oil consumption to gdp but does not exist granger causality running from coal and total energy consumption to gdp on the other hand short run granger causality exists from gdp to total energy coal and oil consumption but does not exist from gdp to electricity consumption we thus propose policy suggestions to solve the energy and sustainable development dilemma in china as enhancing energy supply security and guaranteeing energy supply especially in the short run to provide adequate electric power supply and set up national strategic oil reserve enhancing energy efficiency to save energy diversifying energy sources energetically exploiting renewable energy and drawing out corresponding policies and measures and finally in the long run transforming development pattern and cut reliance on resource and energy dependent industries

the effects of electricity consumption economic growth financial development and foreign direct investment on co2 emissions in kuwait abstract this study examined the empirical effects of economic growth electricity consumption foreign direct investment fdi and financial development on carbon dioxide co2 emissions in kuwait using time series data for the period 1980 2013 to achieve this goal we applied the autoregressive distributed lag ardl bounds testing approach and found that cointegration exists among the series findings indicate that economic growth electricity consumption and fdi stimulate co2 emissions in both the short and long run the vecm granger causality analysis revealed that fdi economic growth and electricity consumption strongly granger cause co2 emissions based on these findings the study recommends that kuwait reduce emissions by expanding its existing carbon capture utilization and storage plants capitalizing on its vast solar and wind energy reducing high subsidies of the residential electricity scheme and aggressively investing in energy research to build expertise for achieving electricity generation efficiency

co2 emissions energy consumption and economic growth in turkey abstract this paper examines the long run and causal relationship issues between economic growth carbon emissions energy consumption and employment ratio in turkey by using autoregressive distributed lag bounds testing approach of cointegration empirical results for turkey over the period 1968 2005 suggest an evidence of a long run relationship between the variables at 5 significance level in turkey the estimated income elasticity of carbon emissions per capita is 0 606 and the income elasticity of energy consumption per capita is 1 375 results for the existence and direction of granger causality show that neither carbon emissions per capita nor energy consumption per capita cause real gdp per capita but employment ratio causes real gdp per capita in the short run in addition ekc hypothesis at causal framework by using a linear logarithmic model is not valid in turkish case the overall results indicates that energy conservation policies such as rationing energy consumption and controlling carbon dioxide emissions are likely to have no adverse effect on the real output growth of turkey

decomposition of electricity demand in china s industrial sector in the past five years china s demand for electricity has accelerated far beyond what central planners had forecasted leading to supply constraints and costly brownouts throughout the country this paper presents analysis of the effect of changes in the industrial sector on electricity demand an important economic sector contributing to these above patterns as it consumes nearly 70 of the electricity generated in china using decomposition analysis it is found that both increased industrial activity and fuel shifts helped increase industrial sector electricity demand between 1998 and 2002 the period of focus in this study but significant increases in energy efficiency countered this

global oil prices macroeconomic fundamentals and china s commodity sector comovements abstract this paper investigates the common movements of commodity sectors in china as well as the economic underpinnings of the comovements we employ a bayesian dynamic latent factor model to disentangle the common and idiosyncratic sector specific factors of the prices of a group of china s commodity sectors petrochemicals grains energy non ferrous metals oils fats and softs the results indicate that the common factor accounts for a significant portion of the fluctuations of china s commodity sectors providing evidence of the strong commodity sector comovements in china we further use a var model to link the common movements across china s commodity sectors to the underlying determinants including global oil price shocks and domestic macroeconomic fluctuations we find that the global oil price shocks have strong effects on the common movements across commodity sectors in china in addition to its domestic macroeconomic fluctuations at long horizons however at short horizons the common movements across commodity sectors in china respond more strongly to the global oil shocks than to its domestic macroeconomic fluctuations

the impact of growth energy and financial development on the environment in china a cointegration analysis this article aims to investigate the impact of financial development economic growth and energy consumption on environmental pollution in china from 1953 to 2006 using the autoregressive distributed lag ardl bounds testing procedure the main objective is to examine the long run equilibrium relationship between financial development and environmental pollution the results of the analysis reveal a negative sign for the coefficient of financial development suggesting that financial development in china has not taken place at the expense of environmental pollution on the contrary it is found that financial development has led to a decrease in environmental pollution it is concluded that carbon emissions are mainly determined by income energy consumption and trade openness in the long run moreover the findings confirm the existence of an environmental kuznets curve in the case of china

new evidence on the valuation effects of convertible bond calls this study examines the wealth effects of convertible bond call announcements on stock holders straight bondholders and called and non called convertible debtholders we docu ment that forced conversions are associated with a significant loss in firm value the results suggest that convertible call announcements can trigger both negative signal and wealth transfer effects we show that at least part ofthe negative effect on stock prices results from wealth transfer to straight bondholders our analysis also lends empirical validity to the common contention that called convertible bondholders suffer wealth expropriation due to the elimination ofthe premium the wealth effect on non called convertible debtholders is insignificant cross sectional analysis reveals that the negative signal effect is important in explaining bond stock and firm excess returns finally we present evidence that refutes the notion that bonds are called to relieve the firm from restrictive debt covenants

performance pricing in bank debt contracts abstract performance pricing links bank debt interest rate spreads to a borrower s performance via two options interest decreasing performance pricing reduces spreads if credit quality improves it is more common when prepayment is more likely or costly and when adverse selection costs are higher and is less common when multiple performance measures better predict credit quality interest increasing performance pricing increases spreads if credit quality deteriorates it is more common when lenders reduce interest rates to add this provision when downgrades are more likely and when moral hazard costs are higher we find lower spreads for contracts with interest increasing performance pricing

framing controversial actions regulatory focus source credibility and stock market reaction to poison pill adoption we contribute to the research on organizational accounts by examining the role of different framing languages and the credibility of the frame articulator on justifying controversial organizational actions drawing on regulatory focus theory and the literature on source credibility we develop novel arguments as to how a gains versus nonlosses framing and the perceived credibility of the speaker influence stakeholder responses as well as how the effectiveness of these aspects is influenced by context we test our arguments using data on the framing of the adoption of poison pills by u s firms between 1983 and 2008 using content analysis and an event study we find that a gains framing aligned with the dominant institutional logic leads to a positive stock market reaction while statements emanating from speakers with potentially self serving interests negatively affect the stock market reaction our findings further show that the effectiveness of framing and source credibility are dependent on contextual attributes such as speaker visibility prior performance and practice prevalence

central banking as a political principal agent problem i introduction conventional wisdom holds that during election periods political leaders have incentives to misuse policy instruments to enhance their chances of reelection rogoff and sibert 1988 construct a rational political economy model of monetary policy based on this theme 1 the results of their model can be interpreted in the following way 2 society elects a leader every other period whose competence affects the level of output in the economy and private agents will tend to vote for the incumbent if the level of output is expected to be higher than that which can be provided by an unknown challenger voters have imperfect information regarding the politician s true impact on output and exogenous shocks to output and consequently cannot disentangle the effects of one from the other in an election period this asymmetry of information gives the incumbent an incentive to expand output through the use of inflationary monetary policy in order to appear more competent than he really is however rational voters are aware of this incentive to inflate and adjust their expectations such that in equilibrium no gain in output occurs and the economy suffers from excessive inflation an implication of the rogoff sibert model is that unless a society does away with elections as a way to choose policymakers excessive inflation and a political inflation cycle will be an unavoidable cost of democracy however societies can try and have tried to avoid these ill effects by taking the power of money creation away from the elected officials and giving it to an appointed independent central banker who will presumably pursue the public good but can this approach actually work the problem with this proposal is that the central bankers well being in many respects reappointment post central bank employment opportunities avoidance of public criticism etc often hinges on pleasing their political benefactors giving the central bankers incentives to act in the interest of elected officials 3 as a result the central banker could pursue objectives different from society s and may actually function as a veil for the elected policymaker in the real world this veil is not complete but partial and hence we can characterize the relationship between the monetary authority and society as a principal agent problem the advantage of delegating power to an appointed central banker and then erecting appropriate institutions is that the inflation problems may be resolved without abandoning the electoral process in this paper we develop a rational political business cycle model that starts from the foundations laid down by rogoff and sibert we depart from their model by having monetary policy delegated to a central banker who is appointed by the elected leaden the concern about reappointment is what motivates the agency problem the central banker would like to be reappointed and this desire leads her to partially accommodate the wishes of the current administration which in turn may not coincide with the desires of the electorate we then analyze the problem faced by a central banker who is concerned about her own selfinterest as well as social well being it is this feature that turns the setting of monetary policy into a political principal agent problem the contributions of our approach to modelling the agency problem of central banking are 1 it explicitly incorporates reappointment concerns into the decision process of the central banker which heretofore has not been done in the literature and 2 we explicitly model the source of the agency problem unlike previous research that simply assumes an agency problem exists our key results are as follows in equilibrium the pursuit of her own self interest leads the central banker to create a socially inefficient inflation bias while rogoff and sibert also obtain this result our explicit functionalform model allows us to analyze this bias in more detail and tie it directly to the strength of the relationship between the central banker and the current administration

the nexus between carbon emissions energy consumption and economic growth in middle east countries a panel data analysis abstract the environmental kuznets curve ekc hypothesis assumes that there is an inverted u shaped relationship between environmental degradation and income per capita in other words as a country grows it is assumed that its environmental quality improves in this study we aim to test the ekc hypothesis for 12 middle east countries during the period 1990 2008 by employing recently developed panel data methods our results provide evidence contrary to the ekc hypothesis we found evidence favorable to the u shaped ekc for 5 middle east countries whereas an inverted u shaped curve was identified for only 3 middle east countries furthermore there appear to be no causal links between income and co 2 emissions for the other 4 countries regarding the direction of causality there appears to be a unidirectional causality from economic growth to energy consumption in the short run in the long run however the unidirectional causality chain runs from energy consumption and economic growth to co 2 emissions we also suggest some crucial policy implications depending on these results

sell side debt analysts and debt market efficiency we explore sell side debt analysts contributions to the efficiency of securities markets we document that debt returns lag equity returns less when debt research coverage exists which is consistent with debt analysts facilitating the process by which available information is impounded in debt prices the effect of debt research on the debt market s lag is incremental to but comparable in magnitude to hedge fund ownership s effect no such effect exists for credit rating agencies we also find that the dissemination of debt reports has an immediate effect on return volatility in both markets which is consistent with debt analysts providing new information to securities markets increased return covariation suggests that this information impacts the pricing of debt and equity in the same direction a large percentage of debt reports do not induce any immediate debt market return reaction but do induce an equity return reaction which is consistent with new information being provided despite the absence of a debt market reaction finally there is a systematic variation in the debt market s trading and return reactions to debt research timely reports and those by high reputation brokers induce a quicker trading response thus enhancing liquidity whereas only timely reports induce a greater return response this study illuminates the institutional underpinnings of debt market efficiency and it has important implications for information content tests in the debt market where trading is limited

the impact of merger bids on the participating firms security holders this paper investigates whether merger bids have an impact on the wealth of the participating firms bondholders and stockholders monthly and daily bond and stock returns are calculated relative to the announcement date of a merger bid for a sample of conglomerate mergers the results show that while the stockholders of target firms gain from a merger bid no other securityholders either gain or lose to provide direct evidence on the existence of diversification effects and incentive effects we test whether the bondholders returns are dependent upon the correlation between the returns of the merging firms and whether the size of the bondholders and stockholders returns in individual mergers are correlated the results are consistent with a capital market that efficiently resolves conflicts of interest between stockholders and bondholders recent empirical studies by mandelker 22 langetieg 18 dodd 6 and asquith 1 provide evidence that mergers have a favorable effect on the market value of the common stocks of merging firms the acquired firms stockholders earn large positive abnormal returns from the merger and the acquiring firms stockholders are affected little if at all although these empirical studies provide extensive evidence concerning the effects of mergers on the stockholders of the merging firms they still leave several important questions unanswered first these studies examine the returns of only one group of the firm s claimants the stockholders it is possible that the positive abnormal returns reported come at the expense of other claimants that is mergers may impose a loss on some claimants of the merging firms and the stockholders positive abnormal returns may simply reflect negative abnormal returns to these other claimants jensen and meckling 15 argue that there is an incentive for the stockholders of leveraged firms to expropriate the bondholders wealth by undertaking investment projects which increase the firm s riskiness since a merger is also a corporate investment it follows that there is an incentive for the stockholders to acquire firms which increase the variability of the firm s cashflow that is the stockholders may earn positive abnormal returns even if there is no real synergy at the expense of bondholders by increasing the firm s risk through merger the bondholders lose because of the increase in the default risk of the

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

the short and long run causality relationship among economic growth energy consumption and financial development evidence from south mediterranean countries smcs abstract this study aims at examining the short run and long run causal link between economic growth energy consumption and financial development by using data set of 6 smcs for the 1995 2015 periods the basic testing procedure requires four steps adf and pp unit root tests bound tests for co integration ardl approach and vecm method the results confirm cointegration between the variables it means that the long run relationship exists the short run causal relationships unidirectional exist at least once for each country except egypt the granger causality results for individual countries give mixed results these results urge for the attention of the policy makers in smcs to design a comprehensive energy conservation policy to minimize the consequences of massive energy consumption on economic growth by adding financial development

economic growth energy consumption financial development international trade and co2 emissions in indonesia this study examines the linkages among economic growth energy consumption financial development trade openness and co2 emissions over the period of 1975q1 2011q4 in the case of indonesia the stationary analysis is performed by using zivot andrews structural break unit root test and the ardl bounds testing approach for a long run relationship between the series in the presence of structural breaks the causal relation between the concerned variable is examined by the vecm granger causality technique and robustness of causal analysis is tested by innovative accounting approach iaa our results confirm that the variables are cointegrated it means that the long run relationship exists in the presence of structural break stemming in the series the empirical findings indicate that economic growth and energy consumption increases co2 emissions while financial development and trade openness compact it the vecm causality analysis has shown the feedback hypothesis between energy consumption and co2 emissions economic growth and co2 emissions are also interrelated i e bidirectional causality financial development granger causes co2 emissions the study opens up a new policy insights to control the environment from degradation by using energy efficient technologies financial development and trade openness can also play their role in improving the environmental quality

oil price shocks and agricultural commodity prices abstract while the impacts of oil price changes on agricultural commodity markets are of great interest to economists previous studies do not differentiate oil specific shocks from aggregate demand shocks in this paper we address this issue using a structural var analysis our findings indicate that the responses of agricultural commodity prices to oil price changes depend greatly on whether they are caused oil supply shocks aggregate demand shocks or other oil specific shocks mainly driven by precautionary demand oil shocks can explain a minor friction of agricultural commodity price variations before the food crisis in 2006 2008 whereas in post crisis period their explanatory abilities become much higher after crisis the contributions of oil specific factors to variations in agricultural commodity prices are greater than those of aggregate demand shocks the results from an alternative svar confirm the robustness of our main findings

moral hazard and nonexclusive contracts we study equilibria for economies with hidden action in environments in which the agents contractual relationships with competing financial intermediaries cannot be monitored or are not contractible upon we fully characterize equilibrium allocations and contracts for such economies as well as discuss their welfare properties depending on the parameters of the economy either the optimal action choice is not sustained in equilibrium or if it is agents necessarily enter into multiple contractual relationships and intermediaries make positive profits even under free entry conditions the main features and implications of these environments are consistent with several stylized facts of markets for unsecured loans

effects of financial development indicators on energy consumption and co2 emission of european east asian and oceania countries the financial crisis is considered a major economic issue and energy consumption and pollution are believed to be one of the most important environmental concerns in the new millennium the review on investigation of the nexus among energy consumption gdp growth financial development and co2 emission has shown no definitive conclusion apart from that the effects of financial development on energy consumption are not yet understood properly thus this article investigates the effects of financial indicator shocks i e credit market and stock market shocks on energy consumption and carbon dioxide co2 emissions and vice versa panel vector auto regression pvar models were employed to investigate the relationships in 13 european and 12 east asia and oceania countries from 1989 to 2011 findings emphasize the important role of co2 emission and energy consumption on explaining each other s deviation with only the degree of effect differing although energy consumption and co2 emission shocks on financial indicators such as private sector credit is not very pronounced in both groups of countries but the strength of energy consumption shock on stock return rate in european countries is greater than east asian and oceania countries conversely shocks to stock return rate influence energy consumption especially in long horizon in case of east asia and oceania countries

the effect of dividend changes on stock and bond prices this study examines stock and bond price reactions to dividend changes the positive stock market response to dividend increases has several potential explanations two of the more commonly discussed being information content and wealth redistribution between stockholders and bondholders the evidence presented supports the wealth redistribution hypothesis but does not rule out the information content hypothesis typically we find that the bond price reaction to announcements of large dividend changes is opposite to the stock price reaction our results differ from those of handjinicolaou and kalay this paper examines the impact of dividend changes on both the stock and bond markets this topic is interesting because of the possibility of distinguishing between two important hypotheses the information content hypothesis and the wealth redistribution hypothesis although each of these hypotheses is consistent with a positive stock price reaction to a dividend increase the predicted bond price reactions are different information content implies bond prices should increase when dividend increases are announced and wealth redistribution implies bond prices should fall although these two hypotheses have different implications for the bond price reaction to dividend changes they are not mutually exclusive handjinicolaou and kalay 1984 analyze bond returns around dividend changes and report that bond prices are not affected by dividend increases but react negatively to dividend reductions p 59 they argue their data support the information content hypothesis woolridge 1983 gets similar results but since he includes multiple bonds for the same firm the t statistics may be overstated inasmuch as returns will not be independent across bonds jayaraman and shastri 1988 find insignificantly negative bond price

efficient market tests of the informational content of dividend announcements critique and extension in recent years a major controversy has formed in the finance literature regarding the empirical evidence of the informational content of dividends despite considerable support for the position of dividend nontriviality by various studies the work by watts 13 represents a formidable challenge because of the close proximity of the firm s earnings and dividend announcement dates the major issue of the dispute has centered on the identification and control of contemporaneous earnings information in an attempt to settle this controversy the present study evaluates and extends watts methodology

investigating the validity of pollution haven hypothesis in the gulf cooperation council gcc countries this study investigated the validity of the pollution haven hypothesis in the gulf cooperation council gcc countries using a multivariate framework to achieve the goal of this study the non stationary panel techniques were used to examine the hypothesis from 1980 to 2009 based on the pedroni cointegration test results it was found that the variables are cointegrated moreover the fully modified ols results showed that energy consumption and gdp growth increase co2 emission while foreign direct investment inflows have a long run negative relationship with co2 emission furthermore based on the short run granger causality test results fdi has no short run causal relationship with co2 emission and energy consumption while energy consumption and gdp growth have a positive causal relationship with co2 emission thus the results of this study indicate that energy consumption and gdp growth are the source of pollution in the gcc countries and not the foreign direct investment inflows thus the study recommended that these countries should utilize policies to encourage inward foreign investment since it plays an important role in stimulating gdp growth

the co2 emissions income nexus evidence from rich countries the paper attempts to test the environment kuznets curve ekc hypothesis for 36 high income countries for the period 1980 2005 the test is based on the suggestion of narayan and narayan 2010 various panel data unit root and co integration tests are applied carbon dioxide co2 emissions and gdp series are integrated of order one and co integrated especially after controlling for cross sectional dependence additionally the blundell bond system generalised methods of moments gmm is employed to conduct a panel causality test in a vector error correction mechanism vecm setting unidirectional causality running from real per capita gdp to per capita co2 emissions is uncovered in both the short run and the long run the empirical analysis based on individual countries provides evidence of an ekc for greece malta oman portugal and the united kingdom however it can be observed that for the whole panel a 1 increase in gdp generates an increase of 0 68 in co2 emissions in the short run and 0 22 in the long run the lower long run income elasticity does not provide evidence of an ekc but does indicate that over time co2 emissions are stabilising in the rich countries

the impact of ceo turnover on equity volatility this study investigates the effect on stock price volatility of a significant event in the life of the firm a change in its ceo we find significant long lived increases in volatility following ceo turnover after controlling for firm characteristics and marketwide volatility these increases are larger after forced departures and outside successions following voluntary departures stock prices also respond more strongly to earnings announcements following turnovers these results are consistent with more informative signals of value driving the increased volatility helping resolve two sources of uncertainty possible changes in the firm s strategy and doubt about the successor ceo s ability

the intra industry effects of going private transactions we demonstrate that bids to take firms private generate significantly positive valuation effects for industry rivals of target firms these valuation effects cannot reflect either synergy or monopoly since no consolidation of operating firms is involved in such transactions participation by buyout specialists in the bid does not significantly affect these gains bids by outsiders and bids by incumbent managers generate similar valuation effects for industry rivals the effect on share prices of industry rivals is inversely related to the capitalized values of rival firms relative to the target firm we also report valuation effects for target firms we examine the implications of going private bids for the valuation of horizontal rivals of target firms we hypothesize that going private transactions reflect in part private information held by the bidder about the target firm we argue that if the financial market perceives that elements of this private information are industry wide rather than firm specific the value of the target firm s horizontal rivals should change in response to the goingprivate bid announcement 1 unlike interfirm mergers and acquisitions going private transactions do not involve a consolidation of separate operating firms consequently changes in the value of rival firms induced by goingprivate bids are due neither to the demonstration of synergies associated with a consolidation of operating firms nor to the effects of induced monopoly or collusion 2 we also report valuation effects on target firms we find that announcements of going private bids generate statistically significant positive intra industry effects industry rivals of targets of goingprivate bids receive a positive 2 day average excess return of 1 32 which is statistically significant the average 2 day excess return to target firms is 17 35 and is statistically significant we test whether participation of

the impact of financial development on energy consumption in emerging economies abstract financial development is often cited as a very important driver of economic growth in emerging economies and it is thus likely that financial development affects energy demand this study uses generalized method of moments estimation techniques to examine the impact of financial development on energy consumption in a sample of emerging countries several different measures of financial development are examined using a panel data set on 22 emerging countries covering the period 1990 2006 the empirical results show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using stock market variables like stock market capitalization to gdp stock market value traded to gdp and stock market turnover the implications of these results for energy policy are discussed

ceo compensation after deregulation the case of electric utilities the 1992 national energy policy act nepa intensified competition in the electric utility industry by allowing nonutility generators to produce and sell power in wholesale energy markets congress expected nepa to lead to improved operating efficiencies by substituting market forces for regulation a data set that is unique to the utility industry allows us to test how and whether utility firms reallocated resources to improve efficiencies and more important for this study whether ceo compensation changed in accordance with agency theory predictions that ceo compensation would become more incentive based and more equity based in the competitive operating environment

does higher economic and financial development lead to environmental degradation evidence from bric countries abstract a vast number of studies addressed the environmental degradation and economic development but not financial development moreover as argued by stern 2004 the rise and fall of the environmental kuznets curve world development 32 1419 1439 they present important econometric weaknesses using standard reduced form modeling approach and controlling for country specific unobserved heterogeneity we investigate the linkage between not only economic development and environmental quality but also the financial development panel data over period 1992 2004 is used we find that both economic and financial development are determinants of the environmental quality in bric economies we show that higher degree of economic and financial development decreases the environmental degradation our analysis suggests that financial liberalization and openness are essential factors for the co 2 reduction the adoption of policies directed to financial openness and liberalization to attract higher levels of r d related foreign direct investment might reduce the environmental degradation in countries under consideration in addition the robustness check trough the inclusion of us and japan does not alter our main findings

the long run and causal analysis of energy growth openness and financial development on carbon emissions in turkey abstract the aim of this paper is to examine the causal relationship between financial development trade economic growth energy consumption and carbon emissions in turkey for the 1960 2007 period the bounds f test for cointegration test yields evidence of a long run relationship between per capita carbon emissions per capita energy consumption per capita real income the square of per capita real income openness and financial development the results show that an increase in foreign trade to gdp ratio results an increase in per capita carbon emissions and financial development variable has no significant effect on per capita carbon emissions in the long run these results also support the validity of ekc hypothesis in the turkish economy it means that the level of co 2 emissions initially increases with income until it reaches its stabilization point then it declines in turkey in addition the paper explores causal relationship between the variables by using error correction based granger causality models

dispersed communication by central bank committees and the predictability of monetary policy decisions the paper asks whether members of central bank decision making committees should communicate with the public in a collegial manner by conveying the consensus or majority view of the committee or in an individualistic way by providing the diversity of views among the committee members it finds that more active as well as more consistent communication by committee members improves the predictability of monetary policy decisions significantly this effect is sizeable as communication dispersion across committee members accounts on average for one third to one half of the market s prediction errors of fomc policy decisions moreover more active and more consistent communication are found to also reduce the degree of uncertainty about the future path of interest rates these findings suggest that a collegial communication which stresses the consensus view on policy inclinations can enhance the effectiveness of central bank communication

event risk an analysis of losses to bondholders and super poison put bond covenants ten percent of the investment grade industrial bonds that were associated with major capital restructurings between 1 983 and 1988 had already been downgraded to speculative grade as of august 1989 in response to these downgrades and the corresponding wealth losses for bondholders over 40 percent of recently issued investment grade industrial bonds are protected from this type of event risk by virtue of specialized covenants these event risk convenants may have initially reduced interest costs for borrowers by roughly 20 to 30 basis points however the magnitude of the effect appears to have declined along with the general decline in corporate restructurings the wave of corporate restructurings in the 1980s and the accompanying expansion of debt gave rise to a marked deterioration in credit quality in the corporate bond market the financing of the restructurings typically included new debt with a priority equal to or higher than that of the firm s outstanding bonds as a result of the increase in risk billions of dollars in outstanding bonds were downgraded from investment grade to speculative grade in the process investors became increasingly concerned with event risk the risk of a substantial decline in the market price of a firm s outstanding bonds arising from an unforeseen and major change in its capital structure since late 1988 several corporate bond offerings have included event risk covenants as a safeguard against leverage induced losses most of the covenants are super poison puts which give investors the right to sell their bonds back to the issuer at par in the event of a leveraged restructuring and subsequent downgrading to speculative grade

energy consumption carbon emissions and economic growth in china abstract this paper investigates the existence and direction of granger causality between economic growth energy consumption and carbon emissions in china applying a multivariate model of economic growth energy use carbon emissions capital and urban population empirical results for china over the period 1960 2007 suggest a unidirectional granger causality running from gdp to energy consumption and a unidirectional granger causality running from energy consumption to carbon emissions in the long run evidence shows that neither carbon emissions nor energy consumption leads economic growth therefore the government of china can purse conservative energy policy and carbon emissions reduction policy in the long run without impeding economic growth

going private transactions bondholder returns and wealth transfer effects abstract we examine how buyout activity and deal characteristics drive bondholder returns and the wealth transfer effects between bondholders and stockholders in going private transactions from 1981 to 2006 we find that various deal characteristics are major determinants of the cross sectional variation in bondholder returns in particular a single private equity acquirer mitigates bondholder losses on the other hand bondholders have larger losses when a reputable buyout firm is involved in the deal bondholders experience losses in the 1980s and 2000s but enjoy gains in the 1990s our findings remain robust to consideration of deal financing relative cost of credit and level of market overheating we find a negative and significant relationship between stockholder and bondholder wealth effects which supports the wealth transfer hypothesis

when does the bond price reaction to earnings announcements predict future stock returns abstract in this paper i show that the bond price reaction to earnings announcements has predictive power for post announcement stock returns and that this predictive ability is driven by the bonds of non investment grade firms i find that bonds predictive ability is more pronounced in firms that have a lower level of institutional shareholder ownership and whose bonds are more liquid this paper enhances our understanding of the relation between the stock and bond markets and complements the literature which documents whether and under what circumstances various accounting based measures and financial statement components predict post announcement stock returns

an empirical test of the redistribution effect in pure exchange mergers merger transactions involve differing degrees of change in capital structure and asset distribution as a result different forms of merger could have different effects on security values of the firms involved previous empirical studies primarily used samples that included all types of mergers the present study examines the effect of one type of merger pure stock exchange on the values of the debt and equity of the firms involved

delving into liberia s energy economy technical change inter factor and inter fuel substitution abstract the industrial energy mix of liberia is dominated by petroleum products this has generated serious environmental problems contributing immensely to co 2 emissions and other pollutants in the country this study has attempted to investigate the potential for inter factor and inter fuel substitution between capital labor petroleum and electricity in liberia by employing a translog production and cost function approach ridge regression procedure has been adopted to estimate the parameters of the function due to multicollinearity in the data estimation results show that all inputs are substitutes these suggest that price based policies coupled with capital subsidy programs can be adopted to redirect technology use towards cleaner energy sources like electricity hence retaining the ability to fuel the economy while also mitigating greenhouse gas ghg emissions substitution between energy and labor and energy and capital implies that removal of price ceilings on energy in liberia would tend to reduce energy use and increase capital and labor intensiveness notwithstanding the study seems to show no evidence of convergence in relative technological progress of the four inputs implying that petroleum will continue to play a dominant role in the energy consumption mix of liberian industry while labor investment will continue to outweigh capital inputs finally the findings of this study provide general insights and underscore the importance of policies that focus on installed capacity of renewable electricity energy intensity targets as well as merger of enterprises

financial analysts forecasts of earnings a better surrogate for market expectations abstract the specification of the market expectation of accounting numbers is a common feature of many empirical studies in accounting and finance givoly and lakonishok 1979 found that financial analysts forecasts have information content this study evaluates the quality of analysts forecasts as surrogates for the market expectation of earnings and compares it with that of prediction models commonly used in research results indicate that prediction errors of analysts are more closely associated with security price movements suggesting that analysts forecasts provide a better surrogate for market expectations than forecasts generated by time series models the study also identifies factors that might contribute to the performance of the financial analysts forecasts the broadness of the information set employed by analysts and to a lesser extent their reliance on information released after the end of the fiscal year appear to be important contributors to their performance

takeover defenses and wealth effects on securityholders the case of poison pill adoptions abstract this is the first study to examine the valuation effects of any antitakeover amendment on both bondholders and stockholders we present new evidence documenting that on average there is a significant wealth loss experienced by bondholders at poison pill adoption announcement while stockholders are unaffected our finding of significant bondholder losses is consistent with the proposed negative signal hypothesis we document results which indicate that bondholders correctly anticipate the degree of leverage increase at the time of the announcement we also show that the proportion of insider ownership is negatively related to bondholder wealth effect at announcement this supports the notion that higher insider manager ownership leads to a greater alignment of manager stockholder interests while increasing the stockholder bondholder agency costs long run analysis of leverage and performance measures reveal that pill adopting firms are not under leveraged as compared to their industry rivals however supporting the negative signal hypothesis the leverage of sample firms rises significantly after the pill adoption performance measures reveal that sample firms significantly underperform their industry cohorts this result suggests that poison pill adoptions are motivated by poor managers attempting to immunize themselves from the disciplinary actions of the corporate control market

controlling the conflict of interest in management buyouts a controversial aspect of the management buyouts that were popular throughout the 1980s is the potential for a conflict of interest to arise when a manager bids to acquire the firm he manages this study examines 184 management buyouts and reports three findings first returns to prebuyout shareholders are greater when managers must bid against outside acquirers second bid revisions in the face of competition exceed revisions due to shareholder litigation and negotiations with boards third the incidence of competition is negatively related to the prebuyout share holdings of managers coauthors are ronald f singer anju seth and darla f lang copyright 1994 by mit press

is new zealand s reserve bank act of 1989 an optimal central bank contract this paper evaluates the reserve bank of new zealand act of 1989 from a principal agent perspective arguing that the act represents a dismissal rule the optimal dismissal rule requires that the central banker be dismissed whenever inflation exceeds a critical level that depends on aggregate supply disturbances and measurement error in the inflation index this is essentially the structure established by the act the scope for renegotiating the target rate however creates an incentive for the government to set the critical rate too high consequently the inflation bias of discretion is reduced but not completely eliminated copyright 1995 by ohio state university press

energy consumption economic growth and carbon emissions challenges faced by an eu candidate member abstract this paper investigates the long run granger causality relationship between economic growth carbon dioxide emissions and energy consumption in turkey controlling for gross fixed capital formation and labor the most interesting result is that carbon emissions seem to granger cause energy consumption but the reverse is not true the lack of a long run causal link between income and emissions may be implying that to reduce carbon emissions turkey does not have to forgo economic growth

dividend changes and security prices this paper analyzes the effect of unexpected dividend changes on the values of common stock preferred stock and bonds two potential effects are identified a wealth transfer effect and a signalling effect previous studies have shown that positive negative dividend change announcements produce positive negative common stock price changes whereas these findings have been attributed to the signalling aspect of dividends they are also consistent with the wealth transfer hypothesis based on the announcement day returns of common and preferred stock and bond holders it is demonstrated that the primary factor influencing security returns in response to dividend changes is market signalling a wealth transfer effect is not necessarily ruled out but if it exists it is dominated by the signalling effect financial decisions may have at least two distinct effects on the distribution of total firm value among different classes of securities first if claim holders are inadequately protected by me first rules a financing decision may result in wealth transfers among different classes of securities second if the market possesses imperfect information a financing decision may signal information to the market concerning firm value and thereby influence the values of all security classes many recent empirical studies have demonstrated that a significantly positive relationship exists between the direction of dividend changes and announcement day common stock returns in each case the authors attribute this relationship to the information conveyed to the market in dividend change announcements however this relationship is also consistent with the hypothesis that dividend changes under certain conditions may result in wealth transfers between debt and equity holders in this study the information and wealth transfer effects are discussed as they pertain to dividend payments and the influence of dividend decisions on the value of different security classes is investigated empirically

energy consumption economic growth and co2 emissions in middle east and north african countries this article extends the recent findings of liu 2005 ang 2007 apergis et al 2009 and payne 2010 by implementing recent bootstrap panel unit root tests and cointegration techniques to investigate the relationship between carbon dioxide emissions energy consumption and real gdp for 12 middle east and north african countries mena over the period 1981 2005 our results show that in the long run energy consumption has a positive significant impact on co2 emissions more interestingly we show that real gdp exhibits a quadratic relationship with co2 emissions for the region as a whole however although the estimated long run coefficients of income and its square satisfy the ekc hypothesis in most studied countries the turning points are very low in some cases and very high in other cases hence providing poor evidence in support of the ekc hypothesis co2 emission reductions per capita have been achieved in the mena region even while the region exhibited economic growth over the period 1981 2005 the econometric relationships derived in this paper suggest that future reductions in co2 emissions per capita might be achieved at the same time as gdp per capita in the mena region continues to grow

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

the impact of financial development on carbon emissions an empirical analysis in china given the complexity between china s financial development and carbon emissions this paper uses some econometric techniques including cointegration theory granger causality test variance decomposition etc to explore the influence of financial development on carbon emissions results indicate that first china s financial development acts as an important driver for carbon emissions increase which should be taken into account when carbon emissions demand is projected second the influence of financial intermediation scale on carbon emissions outweighs that of other financial development indicators but its efficiency s influence appears by far weaker although it may cause the change of carbon emissions statistically third china s stock market scale has relatively larger influence on carbon emissions but the influence of its efficiency is very limited this to some extent reflects the relatively lower liquidity in china s stock markets finally among financial development indicators china s fdi exerts the least influence on the change of carbon emissions due to its relatively smaller volume compared with gdp but it is mainly utilized in carbon intensive sectors now therefore with the increase of china s fdi in the future many efforts should be made to adapt its utilizing directions and play its positive role in promoting low carbon development