capital flow controls international asset pricing and investors welfare a multi country framework this paper investigates the impact of capital flow restrictions on the pricing of securities on the optimal portfolio composition for investors of different nationalities and on their welfare under capital flow controls the equilibrium price of a security is determined jointly by its international and national risk premiums and investors acquire nationality specific portfolios along with a market wide proxy for the world market portfolio removal of investment barriers generally leads to an increase in the aggregate market value of the affected securities and all investors favor a move toward market integration introduction of different types of index funds in the world market generally increases world market integration and investor welfare in recent years the international capital markets have undergone numerous important changes that have increased the international linkage of national markets these changes include the creation of national index funds e g mexico korea taiwan india france and scandinavia and selective liberalization e g brazil india korea sweden and japan despite their potential impact on the national economies and global finance it is not clear what consequences these integrating changes entail for example is welfare increased by allowing cross border investment that is restricted to purchasing the entire national portfolio of which the national index fund is a class unfortunately with the exception of subrahmanyam 1975a who studies the pricing and welfare effects of fully integrating heretofore completely segmented markets other international asset pricing models that incorporate capital flow restrictions for instance black 1974 stulz 1981b lessard et al 1983 errunza and losq 1985 cooper and kaplanis 1986 and eun and janakiramanan 1986 analyze the pricing but not the welfare effects of investment barriers to analyze systematically the welfare implications of various structural changes in the current market environment this paper follows the lead of subrahmanyam and recasts the analysis in two important respects

multinational public goods provision under multilateral income transfers and productivity differences abstractthis article examines multinational public goods provision under multilateral income transfers and productivity differences across countries under a planner who uses linear approximation for utility maximization we show that 1 a country is an income receiver if it has a higher productivity than the average in producing public goods enabling it to provide more public goods 2 the amount of transfers can be pinned down for all countries with an adjustment cost 3 each country obtains an identical utility increment and 4 the country with the lowest adjustment cost is the best candidate for the planner country all results are derived based on well known information regarding the cost of producing the public goods and income levels

the liability of foreignness in international equity investments evidence from the us stock market using foreign institutional ownership data in the us from 1990 to 2007 we examine whether foreign institutional investors face liabilities of foreignness lof in the us stock market we find that foreign institutional investors prefer low information asymmetry stocks more than domestic institutional investors do and this preference for low information asymmetry stocks is particularly strong among foreign institutional investors from countries with high lof more importantly we find that a change in foreign institutional ownership is negatively related to future returns whereas this relation does not exist for domestic institutional ownership the negative relation between the change in foreign institutional ownership and future returns is more pronounced when investors face a greater lof in the us stock market for instance when they are from countries with higher institutional distance information asymmetry unfamiliarity and cultural differences the negative effect of country specific lof factors on the return forecasting power of foreign institutional investors is more evident when they trade stocks with higher information asymmetry overall these findings suggest that foreign institutional investors face significant lof costs in the us stock market resulting in their poor ability to forecast returns

equilibrium existence and uniqueness in impure public good models abstract despite widespread application of the impure public good model surprisingly little attention has been given to the model s equilibrium properties this paper presents a proof that clearly shows sufficient conditions for existence and uniqueness of a nash equilibrium

defining economics the long road to acceptance of the robbins definition robbins essay gave economics a definition that came to dominate the professional literature this definition laid a foundation that could be seen as justifying both the narrowing of economic theory to the theory of constrained maximization or rational choice and economists ventures into other social science fields though often presented as self evidently correct both the definition itself and the developments that it has been used to support were keenly contested this paper traces the reception diffusion and contesting of the robbins definition arguing that this process took around three decades and that even then there was still significant dissent

home bias in equity portfolios inflation hedging and international capital market equilibrium we test whether the home bias in equity portfolios is caused by investors trying to hedge inflation risk the empirical evidence is consistent with this motive only if investors have very high levels of risk tolerance and equity returns are negatively correlated with domestic inflation we then develop a model of international portfolio choice and equity market equilibrium that integrates inflation risk and deadweight costs using this model we estimate the levels of costs required to generate the observed home bias in portfolios consistent with different levels of risk aversion for a level of risk aversion consistent with standard estimates of the domestic equity market risk premium these costs are about a few percent per annum greater than observable costs such as withholding taxes thus the home bias cannot be explained by either inflation hedging or direct observable costs of international investment unless investors have very low levels of risk aversion article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

tiebout equilibria in local public good economies with spillovers abstract this paper analyzes the effects of spillovers on the equilibrium population distribution across jurisdictions in a local public good economy with free mobility spillovers are parametrized by a matrix ij where ij 0 1 when spillovers are symmetric and close to 0 or 1 pure local public goods and pure public goods all equilibrium jurisdiction structures are symmetric however any population distribution can be sustained in equilibrium for some value of the spillover parameter in the class of utility functions with additive externalities we identify the unique family of utility functions for which equilibria are symmetric except for an isolated value of this is a class of utility functions which are linear in the public good and a power function of the private good u c a 1 c with this specification of utility we show that an increase in results in a more fragmented equilibrium population distribution and that when spillovers are asymmetric and large a jurisdiction which is more centrally located i e benefits more from the public goods provided in other jurisdictions has a larger population in equilibrium

nash equilibrium existence and uniqueness in a club model abstract we model a single club heterogeneous consumer exogeneous income economy as an aggregative public good game under common assumptions if club quality functions are homogeneous of positive degree in the club facility investment and use an unique nash equilibrium exists

an intertemporal model of international capital market segmentation this paper develops an intertemporal model of international capital market segmentation within the model under various forms of segmentation integration the equilibrium asset prices and allocations the risk free interest rate and the intertemporal consumption behavior and welfares of two countries are derived and compared it is shown that the equilibrium interest rate is increased on integration and that integrating markets may be significantly welfare decreasing for one of the countries conditions that may lead to a decrease in welfare are investigated the conclusions as to the effects of segmentation on asset prices in the mean variance model of the existing finance segmentation literature are also shown to break down in an intertemporal model

foreign investors and corporate social responsibility evidence from the career advancement of women in japan i examine whether foreign investors invest in firms that encourage the career advancement of women by using data from a sample of japanese firms during the period 2008 2011 first i find that corporate governance reform and work life balance practices facilitate the promotion of women to higher positions in firms furthermore i find that foreign investors hold more shares of firms that encourage the career advancement of women overall these results indicate that the career advancement of women as a part of corporate social responsible activities benefits foreign investors

strategic transfers and private provision of public goods abstract this paper considers strategic monetary transfers between two agents when these contribute to a mutual public good if the agents differ in their contribution productivity then the less productive agent has an incentive to make large unconditional transfers to the more productive agent although agents move simultaneously in each stage of the game the less productive agent becomes a stackelberg leader furthermore the generic subgame perfect equilibrium is characterized by full specialization

foreign equity investment restrictions capital flight and shareholder wealth maximization theory and evidence this article provides a theory of foreign equity investment restrictions we consider a model where the demand function for domestic shares differs between domestic and foreign investors because of deadweight costs in holding domestic and foreign securities that depend on the country of residence of investors we show that domestic entrepreneurs maximize firm value by discriminating between domestic and foreign investors the model implies that countries benefitting from capital flight have binding ownership restrictions such that foreign investors pay a higher price for shares than domestic investors the empirical implications of this theory are supported by evidence from switzerland article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the role of american depositary receipts in the development of emerging markets using a sample of 28 stock markets this chapter presents an empirical exploration of the effect of american depositary receipts adrs on emerging market development we examine the role of adrs on three aspects of market development openness defined as the degree of market transparency and reliability liquidity a measure of market activity and growth which attempts to measure the market s ability to foster the formation of new enterprises and encourage economic growth the preliminary evidence from the study is mixed adrs are instrumental in increasing openness but negatively impact both liquidity and the ability of the local market to foster economic growth also the effect of large firms listing adrs is detrimental to the development of the local market

identifying the free riders a simple algorithm for determining who will contribute to a public good abstract when a heterogeneous group of people provide themselves with a pure public good the resulting nash equilibrium outcome will divide the group into contributors and free riders this paper proposes a general algorithm for discovering which individuals in the group fall into which of these two classes the algorithm is based on identifying for each individual how much of the public good must be provided by others to drive that individual s contribution to zero

on the effects of barriers to international investment a simple model is presented in which it is costly for domestic investors to hold foreign assets the implications of the model for the composition of optimal portfolios at home and abroad are derived it is shown that all foreign assets with a beta larger than some beta plot on either one of two security market lines some foreign assets with a beta smaller than are not held by domestic investors even if their expected return is increased slightly while it is obviously not true that asset markets are completely segmented between countries there is evidence of barriers to international investment although reality seems to lie in that grey area between complete segmentation and no segmentation at all most international asset pricing models are concerned with the extreme case of no barriers to international investment no effort seems to have been made to study the effect on portfolio choice of such barriers which make it costly to hold foreign securities as opposed to domestic securities but which do not in general render international diversification so onerous that investors avoid foreign securities completely casual empiricism suggests that models without barriers to international investment should be suspect those models cannot explain why it appears that in every country investors on average hold more domestic securities than would be required if they held the world market portfolio 2 this paper constructs a model of international asset pricing in which there is a cost associated with holding either long or short risky foreign securities for the sake of simplicity in most of the paper we assume that while domestic investors face barriers to international investment foreign investors face no such barriers it turns out that nothing significant is lost with such an assumption the main conclusions of this paper for the case in which foreign investors face no barriers to international investment are 1 in the presence of barriers to international investment some risky foreign

retrospectives on the definition of economics modern economists do not subscribe to a homogeneous definition of their subject surveying definitions of economics from contemporary principles of economics textbooks we find that economics is the study of the economy the study of the coordination process the study of the effects of scarcity the science of choice and the study of human behavior at a time when economists are tackling subjects as diverse as growth auctions crime and religion with a methodological toolkit that includes real analysis econometrics laboratory experiments and historical case studies and when they are debating the explanatory roles of rationality and behavioral norms any concise definition of economics is likely to be inadequate this lack of agreement on a definition does not necessarily pose a problem for the subject economists are generally guided by pragmatic considerations of what works or by methodological views emanating from various sources not by formal definitions to repeat the comment attributed to jacob viner economics is what economists do however the way the definition of economics has evolved is more than a historical curiosity at times definitions are used to justify what economists are doing definitions can also reflect the direction in which their authors want to see the subject move and can even influence practice

intraday market price integration for shares cross listed internationally this study investigates market price integration by testing per share trade execution price or cost tep c differentials for matched intraday trades for a sample of canadian shares cross listed in the u s the tse trade price advantage over the entire time period changed significantly after both the tse s own minimum quotation increment reduction and that of its u s competitors we show that the differential tep c is equivalent to the international effective spread differential and that market quality comparisons which benchmark using the national instead of the international bbo need to compare both national effective half spread and midspread differences our cross sectional regression results support our predictions that tep c differentials can be explained by differences in national midspreads and by ex ante proxies of national effective half spreads the tep c differentials vary inversely with increasing levels of our measure of signed market nonfragmentation

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

why do only the g7 2 countries among united nations members discuss about international public goods a simulation study abstractthis article investigates why only the group of 7 plus china and russia g7 2 countries among 194 united nations members discuss about international public goods by simulating the heterogeneity of income prices and preference parameters on the total provisions and the number of free riders we find that the number of contributors for international public goods is 15 under the 194 member countries while the others are free riders in addition the contributors are the top 15 powerful countries with largest dropout value over the world then the discussion with only 15 countries for public goods is meaningful as large as the heterogeneity of parameters is the number of contributors becomes closer to g7 2

potential contributions of political science to environmental economics while political science has much to offer at least some of its contributions might be difficult to incorporate into economic models nevertheless we argue that environmental economics might benefit from supplementing combining or sometimes even replacing the rational choice approach with other approaches commonly used in political science we develop our argument by examining three core components of political science analysis ideas power and institutions for each component we review political science approaches and propositions with a view to determining what s in it for environmental economics

the uniqueness of nash equilibrium in the private provision of public goods abstract this note provides an alternative elementary proof of bergstrom blume and varian s well known result on the uniqueness of nash equilibrium in the private provision of a public good when all goods are normal

an interpretive history of challenges to neoclassical microeconomics and how they have fared contemporary microeconomics has witnessed a resurgence of behavioral institutional and evolutionary critiques of the neoclassical mainstream that came to dominate the field during the 1980s today s critiques and proposals for reform have a long tradition in economics while synthesizing the intellectual history of these challenges this article explores the reasons why such critical strands of microeconomics fared poorly in the past and in contrast what factors may account for their partial acceptance into the mainstream in recent times

taxation of asset income in the presence of a world securities market abstract this paper examines a capm model of world security prices in which governments recognize their ability to influence international security prices via their tax treatment of foreign and domestic investors in this model governments have the incentive to set tax rates such that investors tend to specialize in domestic securities and to restrict net capital flows between countries each country does this to increase the utility of domestic residents taking as given the tax policies of other governments but the net outcome is a reduction in world efficiency and likely a reduction in the utility of all investors

the impact of global equity offerings this article examines the impact of u s firms issuing equity in multiple markets we compare the stock price reactions to announcements of global equity offers to a control group of issues offered exclusively in the domestic u s market all else equal the adverse price reaction that typically accompanies equity issuance is reduced by 0 8 percent when some shares are sold abroad the overall evidence suggests global offers are effective in expanding demand and reducing the price pressure effects associated with share issuance the benefits of global offers appear to be associated with an increase in the number of foreign shareholders the search for new capital markets and lower costs of capital is an ongoing search for most firms in recent years the number of u s firms issuing common equity in international markets has increased significantly in 1985 u s firms raised 89 million through follow on equity offers in foreign markets and this amount increased to 18 915 million in 1995 a greater than 200 fold increase in nominal terms this paper focuses on follow on global equity issues by u s firms and attempts to assess why firms widely acknowledged to have access to broad and deep domestic capital markets increasingly seek to raise equity abroad the global equity offerings we examine involve a simultaneous sale of common equity at the same offer price in the u s market and one or more international markets we examine the characteristics of the issuers and issues and investigate to what extent the wider distribution of shares affects the pricing and costs of these issues our main line of inquiry examines whether the distribution of shares to multiple markets results in a higher offer price for equity shares than would be obtained had the shares been sold exclusively in the u s market domes

the pricing of emerging market country funds this paper provides an analysis of the equilibrium pricing of closed end country funds cecfs from emerging and nascent markets under the condition of segmented capital markets where an investment company acquires a set of eligible securities from the home country to form a cecf and issues shares to the residents of the host country the key findings are first a country fund will trade at its net asset value zero premium mimicking an open end status if the fund acquires as much of eligible securities as the differential substitution demand for them between the host and home country investors the differential substitution demand is shown to represent the equilibrium demand for eligible securities by the host country investors when they do not face supply restrictions second the fund will command a higher premium the more close a substitute the fund is for the market portfolio of the home country and the more risk averse the home country investors are collectively third the basic functional form of the fund premium is robust to the inclusion of freely tradable securities however the fund premium would additionally depend on the spanning ability of freely tradable securities

community enforcement of fisheries effort restrictions abstract this paper models the use of community sanctions to restrict effort in a simple gordon schaefer style model of the fishery with heterogeneous fishing costs the withdrawal of cooperation in other areas of life is used to both restrict effort and to sanction those who continue to cooperate with those who have not restricted effort coalition proof nash equilibria are generated by a combination of sanctions discouraging the defection of small groups and stock reductions discouraging noncooperation by large groups both entry restrictions and individual quotas can be supported by community sanctions under some parameter combinations however there are cases where each can generate lower total rents than would be available under open access relatively low cost fishers are more likely to support entry restrictions and ignore community attempts to restrict individual effort while high cost fishers are more likely to support quotas

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

the value of the corporate voting right evidence from switzerland abstract this paper analyzes the value of voting power of swiss firms which usually issue high voting rights stock low voting rights stock and non voting stock two variables measuring voting power inequality are constructed they are both useful in explaining the voting rights premia also the allocation of the voting rights is analyzed it is shown that majority shareholders hold the high voting rights stock

uniqueness of nash equilibrium in private provision of public goods an improved proof our 1986 paper private provision of public goods presents a theorem on the uniqueness of nash equilibrium in the private provision of public goods richard hirth of the university of pennsylvania and clive fraser of warwick have independently suggested that although our theorem is correct our proof is incorrect each writer proposes an alternative method of proof for the theorem with characteristic charity to our own deficiencies we prefer to view our earlier proof as unduly opaque rather than wrong whichever view one takes a more transparent proof is called for the proof presented here follows the same outline as our 1986 proof but explains a step of the argument that was far from obvious in the original proof this proof uses the notation of the 1986 paper and refers to facts that are proved there

price differences between equity classes corporate control foreign ownership or liquidity abstract this paper is the first comprehensive study of price differences for dual class equity at the oslo stock exchange it analyzes the relative importance of corporate control foreign ownership restrictions and stock market liquidity for the price differences the norwegian market has the peculiar feature that in part of the sample period non voting shares were trading at a premium to voting shares i e what is usually termed the voting premium was negative this result can be rationalized by restrictions on foreign ownership in the later part of the period with no regulatory restrictions on foreign ownership the voting premium is positive and related to corporate governance and liquidity

noncooperative household demand we study noncooperative household models with two agents and several voluntarily contributed public goods deriving the counterpart to the slutsky matrix and demonstrating the nature of the deviation of its properties from those of a true slutsky matrix in the unitary model we provide results characterising both cases in which there are and are not jointly contributed public goods demand properties are contrasted with those for collective models and conclusions drawn regarding the possibility of empirically testing the collective model against noncooperative alternatives and the noncooperative model against a general alternative

rate of return regulation and utility capital structure decisions a corporation s capital structure is a means for partitioning its return stream among different classes of securityholders and across different states of nature the primary thrust of capital structure theory has been to determine whether and how this partitioning affects the total value of the firm 1 for a firm subject to rate of return regulation however the capital structure decision may take on an additional dimension under such regulation the firm s output price is set by an outside agency so as to yield a fair return to providers of capital and if effective this process reduces monopoly profits but if the regulator s price setting rule depends on the firm s capital structure in some predictable way the firm may be able to influence price and hence reap additional profits by judiciously choosing its financing mix the purpose of this paper is to analyze possible price influence effects of a regulated firm s capital structure and to illustrate regulators attempts to combat them the determinants of a regulated firm s capital structure have been touched upon in previous papers gordon 8 elton and gruber 5 gordon and mccallum 9 jaffe and mandelker 11 meyer 14 and sherman 24 for example but that issue has not been their primary concern the present paper differs from those mentioned above by focusing its attention more directly on the capital structure decision this issue is of interest in its own right in view of the important position occupied by regulated firms securities in the capital market but the approach taken here also serves to highlight and extend some common threads in the previous papers in particular the results of these papers emerge as straightforward applications of the price influence principle and differences among them can be attributed to differing perceptions of the regulator s pricesetting behavior section i of the paper discusses the price influence principle in general terms and describes the circumstances under which it will alter a regulated firm s financing choice section ii presents three illustrations of how the general principle might work in practice depending on the price setting behavior of the regulatory agency section iii discusses regulators attempts to thwart the priceinfluence effect and conclusions are drawn in section iv

changes in systematic risk following global equity issuance abstract this paper examines changes in systematic risk following global equity issues by us firms models of market segmentation show that if international capital markets are not fully integrated and demand curves for securities are downward sloping firms issue equity at higher prices by issuing in multiple markets compared to issuance on a single domestic market this would imply a reduction in the firm s cost of capital and an increase in firm value using a sample of global equity offers during 1986 1993 we find that us firms that issue equity abroad experience a decline in systematic risk subsequent to issuance after controlling for size volume and leverage effects we find that this decline in systematic risk is larger in magnitude for global compared to a control sample of domestic equity issues the larger the proportion of the offer sold abroad and the larger the increase in trading volume the bigger the decline in systematic risk using a two factor global risk model we find that while firms issuing equity abroad experience a decline in the domestic component of systematic risk the foreign component increases overall however the net effect is a decline in the cost of capital

asset pricing in partially segmented markets evidence from the finnish market this paper analyzes asset pricing in a partially segmented market where citizens of a small country are allowed to hold only their domestic securities whereas the rest of the investors foreigners are essentially allowed to hold all securities in this market setting it may occur that the citizens of the small country are willing to pay less for their domestic securities than are the foreign investors the paper derives equilibrium required rates of return for different investors in this market setting which perfectly occurred in finland and tests this equilibrium model using data from the finnish stock market empirical results are consistent with the hypotheses derived from the model several studies see e g solnik 1974a and grauer and hakansson 1987 have shown that investors should diversify internationally as by so doing they can reduce the risk of their portfolio without lowering the expected return this implies that if the citizens of a certain country are by legal restrictions prohibited from holding foreign securities they may require a higher rate of return on the domestic securities than the foreign investors do this may happen because the domestic investors cannot diversify away the specific country risk in the same way that the foreign investors can thus if we could observe the prices which the foreign and domestic investors are willing to pay for these domestic securities we would expect them to differ because of this diversification effect the finnish law prohibited finnish investors from investing in foreign securities until 1986 while simultaneously allowing foreign investors to own up to 20 of the shares of any finnish company moreover since 1984 the helsinki stock exchange hse has separately quoted the prices for the unrestricted shares which can be owned both by foreign and domestic investors and for the restricted shares owned solely by domestic investors thus the market setting depicted in the previous paragraph occurred perfectly in finland during the years 1984 and 1985 in this paper our objective is to develop and test an asset pricing model which takes into account the legal restrictions in the finnish stock market in section i we specify the market structure in the finnish stock market in more detail by explaining the relevant legal restrictions affecting the market we also present some descriptive statistics on the prices of the restricted and the unrestricted on

distributional effects in household models separate spheres and income pooling we derive distributional eects for a non cooperative alternative to the unitary model of household behaviour we consider the nash equilibria of a voluntary contributions to public goods game our main result is that in general the two partners either choose to contribute to dierent public goods or they contribute to at most one common good the former case corresponds to the separate spheres case of lundberg and pollak 1993 the second outcome yields local income pooling a household will be in dierent regimes depending on the distribution of income within the household any bargaining model with this non cooperative case as a breakdown point will inherit the local income pooling we conclude that targeting bene ts such as child bene ts to one household member may not always have an eect on outcomes

to ban or not to ban foreign lobbying and cross national externalities this paper studies the costs and benefits of foreign lobbying we show how and when foreign lobbying can help internalize cross national externalities we argue that this is an often overlooked benefit of foreign lobbying we also study under what conditions a constitutional rule banning foreign lobbying is in the national interest of a country a key factor in this calculus is whether the interests of foreign lobby groups and domestic unorganized groups coincide or not we illustrate the logic with examples from trade policy and environmental regulation bannir ou ne pas bannir lobbying etranger et effets externes transnationaux ce texte etudie les couts et avantages du lobbying etranger on montre quand et comment que le lobbying etranger peut aider a internaliser des effets externes transnationaux on suggere que c est souvent un avantage qu on est porte a negliger du lobbying etranger on etudie sous quelles conditions une regle constitutionnelle bannissant le lobbying etranger peut etre dans l interet national d un pays un facteur cle dans ce calcul est le fait que les interets des groupes etrangers coincident ou non avec ceux des groupes nationaux non organises on illustre la logique sous jacente a l aide d exemples portant sur la politique commerciale et la reglementation environnementale

on the private provision of public goods on networks abstract this paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors provisions we present a proof of the existence and uniqueness of a nash equilibrium for general networks and best reply functions in addition we investigate the neutrality result of warr 38 and bergstrom blume and varian 6 whereby consumers are able to undo the impact of income redistribution as well as public provision financed by lump sum taxes to this effect we show that the neutrality result has a limited scope of application beyond a special network architecture in the neighborhood of the set of contributors

an empirical test of neutrality and the crowding out hypothesis this paper tests warr s neutrality hypothesis that the voluntary provision of a public good is independent of the distribution of income specifically i test the null hypothesis of neutrality against the alternative that total contributions to a public good will be larger the less equally income is distributed to test this hypothesis a new data set is constructed by merging data on total voluntary contributions to individual public radio stations with 1990 census data on the income distribution in each station s listening area i find that voluntary contributions increase as income inequality rises

dual class ipos a theoretical analysis we consider an incumbent who wishes to sell equity to outsiders at an ipo to implement his firm s project he may be talented lower cost of effort comparative advantage in project implementation or untalented the project may have high intrinsically more valuable but showing less signs of success in the near term or low near term uncertainty under a single class share structure the incumbent has a greater chance of losing control to potential rivals if he undertakes the project with high near term uncertainty since outsiders may vote for the rival if they believe the project is not progressing well a dual class share structure allows the incumbent to have enough votes to prevail against any rival but may be misused by untalented incumbents to dissipate value our results help to explain firms choices between dual class and single class ipos and the post ipo operating performance of dual class versus single class firms

group size and free riding when private and public goods are gross substitutes abstract using the traditional model of voluntary public good provision it is shown that an expansion of group size exacerbates free riding tendencies as long as private consumption and the public good are strictly normal and weak gross substitutes this result generalizes a previous cobb douglas example with respect to preferences and asymmetric equilibria

government as a discriminating monopolist in the financial market the case of china abstract we show that the many unusual features of china s financial markets are consistent with a government choosing regulations to maximize a standard type of social welfare function under certain conditions these regulations are equivalent to imposing explicit taxes on business and interest income yet should be much easier to enforce the observed implicit tax rates are broadly in line with those observed in other countries the theory also forecasts however that china will face increasing incentives over time to shift to explicit taxes

structuring international cooperative ventures we examine the effect of bargaining power and informational asymmetry on the design of international cooperative ventures in the presence of restrictions on equity participation and investment when the bargaining advantage rests with the multinational equity participation restrictions can increase the profits to domestic firms and encourage sub optimal investment policies overinvestment occurs when the multinational s bargaining advantage is reinforced by an informational advantage while underinvestment occurs when the domestic firm possesses the informational advantage in contrast when the bargaining advantage rests with the domestic firm equity participation restrictions do not affect investment levels

two conceptions of economics and maximisation fil crespo ricardo fernando consejo nacional de investigaciones cientificas y tecnicas argentina universidad austral instituto de altos estudios argentina

the uniqueness of the subscription equilibrium with endogenous labor supply abstract this paper presents a proof of the uniqueness of the nash equilibrium if public goods are financed through private donations and distortionary income taxation