contingent capital tail risk and debt induced collapse we study the design and incentive effects of contingent convertible debt with contingent convertibles the endogenous bankruptcy boundary can be at either of two levels one with lower default risk or one at which default precedes conversion an increase in debt moves the firm from the first regime to the second a phenomenon we call debt induced collapse setting the conversion trigger sufficiently high avoids this hazard given this condition we investigate the effect of contingent capital and debt maturity on optimal capital structure debt overhang and asset substitution we calibrate the model to large banks during the financial crisis received april 10 2015 editorial decision march 20 2017 by editor leonid kogan

tax havens and disclosure aggregation multinational firms have been accused by politicians regulators and citizen groups of shifting profits to low tax geographic areas we present evidence that multinational firms with tax haven operations tend to aggregate their geographic disclosures to a greater extent the results are consistent with managers attempting to avoid criticism by reducing the transparency of their tax avoidance activities we find these results to be stronger for larger firms with higher political costs and for firms in natural resources industries in retail industries or with low competition the evidence is relevant to policymakers and others interested in multinational firms financial reporting and tax activities

strategic responses of incumbents to new entry the effect of ownership structure capital structure and focus we examine how certain firm and market specific characteristics affect incumbent firms responses to new entry into their local markets data comes from the discount department store industry where wal mart entered a large number of markets in a short period of time consistent with existing research larger and more profitable incumbents respond more aggressively to wal mart s entry while more highly levered incumbents respond less aggressively also there is evidence that incumbent managers fight harder possibly overinvest when their job is at greater risk and high managerial ownership appears to reduce this agency problem incumbent firms behave differently in markets under attack by wal mart than in markets not yet threatened suggesting that some of the documented responses are specific to walmart s entry article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the impact of skills on remigration flows more than 10 years after the seminal paper by borjas and bratsberg 1996 modelling the impact of skills on remigration the empirical evidence on that theory is still mixed our article is to shed light on that issue using the german socio economic panel gsoep we test two hypotheses derived from borjas and bratsberg 1996 while allowing for endogeneity of host country specific capital our results give strong support for their theory additionally a sensitivity analysis shows that the insignificance of education in previous studies is due to the test design conducted and cannot be interpreted as falsification of borjas and bratsberg s 1996 theory

executive compensation strategic competition and relative performance evaluation theory and evidence we examine compensation contracts for managers in imperfectly competitive product markets we show that strategic interactions among firms can explain the lack of relative performance based incentives in which compensation decreases with rival firm performance the need to soften product market competition generates an optimal compensation contract that places a positive weight on both own and rival performance firms in more competitive industries place greater weight on rival firm performance relative to own firm performance we find empirical evidence of a positive sensitivity of compensation to rival firm performance that is increasing in the degree of competition in the industry

where is the plus in credit plus the case of chiapas mexico abstractit has become common to try and increase the effectiveness of microfinance programmes by adding supplementary services to the financial product however the added value accruing from this credit plus approach has been little analysed we hypothesise that the extent of added value from credit plus depends on the ability of the credit supplier to cultivate trust or social capital amongst clients applying difference in difference estimation we exploit a natural experiment of two credit plus programmes in mexico the findings suggest that credit plus is not universally effective but that it is at its most effective especially with low income groups where bonding within group social capital exists

from correlates and characteristics to causes thinking about poverty from a chronic poverty perspective summary poverty and poverty reduction are currently the central concerns of development discourse and policy despite recent theoretical advances poverty analysis continues to be dominated by an income consumption conception of poverty we argue for understandings of poverty that go beyond measurement led conceptualizations to more adequately expose the causes of poverty chronic poverty is one such concept its focus on poverty duration and dynamics highlights the forms of social relations that produce poverty and which are often embedded within political institutions and economic structures poverty reduction does not simply require good policy it requires creating the capacity of poorer people to influence and hold accountable those who make policies

assimilation to a welfare state labor market performance and use of social benefits by immigrants to finland this paper documents the economic performance of immigrants in a country characterized by an extensive welfare state and a short immigration history upon arrival immigrants to finland have substantially lower employment rates than comparable natives while they experience rapid employment growth only men from oecd countries catch up with natives despite the persisting employment and earnings differences between non oecd immigrants and natives the differences in income transfers disappear in roughly 20 years the immigrant native employment gaps are larger in finland than in australia canada or the us

underreaction to industry wide earnings and the post forecast revision drift we test whether the post forecast revision drift is mainly attributable to investors underreaction to industry wide earnings news conveyed by analysts forecast revisions we find a large drift associated with industry wide earnings news but no drift associated with firm specific earnings news consistent with the functional fixation hypothesis we provide evidence that the post forecast revision drift is driven by investors underreaction to the higher persistence of industry wide earnings although prior research has focused on differential persistence of earnings components stemming from managerial reporting discretion we provide evidence suggesting that investors do not fully understand the differential earnings persistence attributable to industry fundamentals

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

emissions trading with profit neutral permit allocations this paper examines the impact of an emissions trading scheme ets on equilibrium emissions output price market concentration and profits in a generalized cournot model we develop formulae for the number of emissions permits that have to be freely allocated to firms to neutralize the profit impact of the ets we show that its profit impact is usually limited in a cournot oligopoly with constant marginal costs total industry profits are preserved so long as freely allocated permits cover a fraction of initial emissions that does not exceed the industry s herfindahl index

involuntary corporate finance the dominance of history in decisions lagged values of corporate finance decisions are known to be economically important but most analyses ignore them this article examines the influence on five key financial decisions of previous decisions using a data set that includes industry census data it finds that lagged values explain between 25 and 36 of decisions on leverage payout and investment which gives them strong predictive ability in regression of these decisions on firm and industry traits omission of lagged values leads to a change of around one third in parameter estimates and so significantly overstates their impact the influence of lagged values persists and for most decisions is significant for several years given the stickiness in financial decisions there are potentially significant analytical problems from ignoring their lagged values

selection in initial and return migration evidence from moves across spanish cities this paper investigates the sorting of more productive workers into denser cities using administrative data for spain that fol low individuals continuously throughout their working lives migrants who move to denser cities are positively selected in terms of educa tion occupational skills and individual productivity as proxied by pre migration position in the local earnings distribution however not everyone is able to benefit equally from denser cities and this leads to a second round of sorting returnees are not only ex ante less productive than permanent migrants but are also those who following the first move have least boosted up their earnings in denser cities

industry product market competition and managerial incentives abstract while some studies suggest that industry product market competition can substitute for managerial incentives other studies suggest a complementary relation the underlying assumption behind these studies is that competition can be uni dimensionally proxied for by industry concentration however recent studies suggest that competition can reflect several dimensions product substitutability market size and entry costs given the level of industry concentration using these determinants of competition this study contributes to the literature by showing that a firms provide stronger incentives when industry competition is greater b competition is multi dimensional in its relation to incentives and c industry characteristics play a major role in influencing incentives

national pro poor spending programmes and their effect on income inequality and poverty evidence from vietnam abstractthis article examines the causal effects of the national pro poor targeted programmes ntps on both poverty incidence and inequality in vietnam over the period 2002 2010 while the links between ntps and poverty alleviation and income inequality have previously been analysed independently this study is the first to offer a comprehensive analysis of ntps expenditure on poverty and inequality simultaneously applying the system generalized method of moments estimator to a panel of vietnamese regional data we are unable to establish that ntps have significantly mitigated poverty incidence however we estimate that ntps have significantly increased inequality we offer possible explanations why the ntps have resulted in these unintended outcomes and discuss potential policies which can reduce both poverty and inequality

programs for the poorest learning from the igvgd program in bangladesh abstract this article examines a program that seeks to reach bangladesh s hardcore poor by combining elements of livelihood protection food aid with livelihood promotion skills training and microfinance bangladesh rural advancement committee s income generation for vulnerable group development program has deepened the outreach of its poverty reduction activity and achieved impressive results detailed local level fieldwork revealed however that program practice differed markedly from program plans this is found to have important implications for both future program design and the understanding of who does not benefit from such innovative programs we conclude that while such programs mixing livelihood protection and promotion should be a major focus for anti poverty strategies there will remain a role for more traditional social welfare schemes

borrowing money exchanging relationships making microfinance fit into local lives in kumaon india summary why don t microfinance clients use programs the way development planners and funders expect why do clients change how microfinance projects function in unanticipated ways previous scholarship on microfinance has overlooked the relevance of already existing borrowing practices and norms to how people engage with and use microfinance over 18 months of ethnographic fieldwork in the kumaon region of eastern uttarakhand state in northern india i found that kumaonis altered the microfinance program of a local ngo to make it fit with their already existing borrowing practices which were intimately tied to their livelihood strategies kumaoni livelihoods were based on exchange relationships with family friends and neighbors through which they could secure the means for physical and financial survival as well as social and emotional survival these relationships were governed by a moral economy that obligated exchange partners to properly assist one another and ensured balance between partners and across multiple social ties rather than abandoning their exchange relationships kumaonis and local fieldworkers who also relied on these ties altered microfinance so that it fit with this moral economy and became another node in the already existing networks of assistance if they had not been able to alter projects kumaonis would likely have stopped participating as other groups in similar circumstances around the globe have done although the microfinance program was a success in the eyes of beneficiaries senior staff members and donors remained unaware of why projects changed on the ground to ensure that development programs can be made relevant to people s lives and cultural values development practitioners must relinquish control over the minutiae of development and allow local level workers to negotiate the details of projects with participants

flypaper effects in transfers targeted to women evidence from brac s targeting the ultra poor program in bangladesh abstract many development interventions target transfers to women however little evidence directly explores the flypaper effects of whether women retain control over these transfers once within the household and how reallocation of the transfers affects women s empowerment we study these dynamics in the context of brac s randomized cfpr tup program in bangladesh which provides livestock and training to rural women in ultra poor households our analysis confirms previous findings that cfpr tup increased household asset ownership but shows complex effects on targeted women women appear to retain ownership over transferred livestock but new investments from mobilized resources are largely owned by men cfpr tup also reduces women s movement outside the home and control over income consistent with transferred livestock requiring maintenance at home however beneficiary women also report intangible benefits such as increased social capital and even with limited mobility a preference for work inside the home given a hostile environment outside the home

the impact of strategic interaction on earnings expectations associated with corporate product strategies abstract we examine how strategic interaction in an industry influences the earnings expectations of financial analysts with regard to new product strategies we find that following announcement of new products analysts revise earnings forecasts upward more for announcing firms competing in low strategic interaction industries than for firms competing in high strategic interaction industries for value enhancing value reducing product strategies earnings forecast revisions are more favorable for rivals competing under a high low degree of strategic interaction than for rivals competing under a low high degree of strategic interaction overall empirical evidence indicates that the nature of strategic competition within the industry is important in assessing the market expectations of earnings for new product announcers and their rivals

a measure of competition based on 10 k filings in this paper we develop a measure of competition based on management s disclosures in their 10 k filing and find that firms rates of diminishing marginal returns on new and existing investment vary significantly with our measure we show that these firm level disclosures are related to existing industry level measures of disclosure e g herfindahl index but capture something distinctly new in particular we show that the measure has both across industry variation and within industry variation and each is related to the firm s future rates of diminishing marginal returns as such our measure is a useful complement to existing measures of competition we present a battery of specification tests designed to explore the boundaries of our measure and how it varies with the definition of industry and the presence of other measures of competition

wage assimilation of immigrants and internal migrants the role of linguistic distance this paper investigates the wage assimilation of foreign immigrants and internal migrants in italy comparing them with stayers control for the selection in out migration is performed using a new

governance structure changes and product market competition evidence from u s electric utility deregulation electric utility deregulation associated with the 1992 energy policy act represents a natural experiment for observing linkages between governance structure changes and product market competition this study finds that governance structures of utilities are enhanced in their ability to control owner manager agency conflict post 1992 but not by as much as comparable industrial firms incomplete utility deregulation leads to competition increases that are not as great as those of industrial firms governance structure enhancements of utilities lag behind those of industrial firms further deregulation is expected to stimulate competition leading to governance structures that provide greater control of owner manager agency conflict

gender assets and agricultural development lessons from eight projects ownership of assets is important for poverty reduction and women s control of assets is associated with positive development outcomes at the household and individual levels this research was undertaken to provide guidance for agricultural development programs on how to incorporate gender and assets in the design implementation and evaluation of interventions this paper synthesizes the findings of eight mixed method evaluations of the impacts of agricultural development projects on individual and household assets in seven countries in africa and south asia the results show that assets both affect and are affected by projects indicating that it is both feasible and important to consider assets in the design implementation and evaluation of projects all projects were associated with increases in asset levels and other benefits at the household level however only four projects documented significant positive impacts on women s ownership or control of some types of assets relative to a control group and of those only one project provided evidence of a reduction in the gender asset gap the quantitative and qualitative findings suggest ways that greater attention to gender and assets by researchers and development implementers could improve outcomes for women in future projects

worse than expected uncertainty and earnings subsequent to return migration analyses of unique cross country register data reveal that earnings subsequent to return migration are strongly dependent on uncertainty in the initial migration decision migrants who miss their target have 10 25 lower earnings than those at the expected level

return migration human capital accumulation and the brain drain in this paper we present a model that explains migrations as decisions that respond to where human capital can be acquired more efficiently and where the return to human capital is highest the basic framework is a dynamic roy model in which a worker possesses two distinct skills that can be augmented by learning by doing there are different implicit price in different countries and different rates of skill accumulation our analysis contributes to the literature on the selection of immigrants and return migrants by offering a richer framework that may help to accommodate selections of emigrants and return migrants that are not immediately compatible with the one dimensional skill model our analysis has also implications for the debate on brain drain and brain gain in the two skills model presented here return migration can lead to a mitigation of the brain drain or even the creation of a brain gain where those who return bring the home country augmented local skills

evaluating the long run impact of an innovative anti poverty programme evidence using household panel data using a four round panel data set from the first phase of the challenging the frontiers of poverty reduction targeting the ultra poor cfpr tup programme of brac we investigate whether a one off transfer of livestock assets improves well being of the very poor women in bangladesh programme impact is assessed on a wide range of monetary and nonmonetary measures of well being using difference in difference dd as well as matching methods we find significant positive long term impact on food security household savings assets and participation in microfinance participant women are less likely to be in distress occupation and more into self employment however the long term effect is much smaller for most outcomes when compared to short and medium run impacts we conclude by discussing the significance of the institutional and regional context for the observed time path of estimated programme effect

capital market imperfections and countercyclical markups theory and evidence during recessions output prices seem to rise relative to wages and raw material prices one explanation is that imperfectly competitive firms compete less aggressively during recessions that is markups of price over marginal cost are countercyclical the authors present a model of countercyclical markups based on capital market imperfections during recessions liquidity constrained firms boost short run profits by raising prices to cut their investments in market share the authors provide evidence from the supermarket industry in support of this theory during regional and macroeconomic recessions more financially constrained supermarket chains raise their prices relative to less financially constrained chains copyright 1996 by american economic association

milk in the data food security impacts from a livestock field experiment in zambia summary smallholder livestock ownership has potential to enhance food security by raising incomes of the poor and by increasing the availability of nutrient dense foods this paper exploits the staggered rollout of livestock distribution by heifer international in zambia to identify the effects of livestock using statistically similar treatment and control groups in a balanced panel of households results indicate that livestock ownership improves dietary diversity through both direct consumption of animal products produced on farm and through increased consumption expenditures further results indicate that expanded livestock ownership alters the local food economy to influence food consumption by households lacking farm animals

trade secrets law and corporate disclosure causal evidence on the proprietary cost hypothesis this study exploits the staggered adoption of the inevitable disclosure doctrine idd by u s state courts as an exogenous shock that generates variations in the proprietary costs of disclosure we find that firms respond to idd adoption by reducing the level of disclosure regarding their customers identities supporting the proprietary cost hypothesis our results are stronger for firms in industries with a higher degree of entry threats for firms in more volatile industries and for firms with a lower degree of external financing dependence overall this study represents one of the first efforts in identifying the causal effect of proprietary costs of disclosure on the supply of disclosure this article is protected by copyright all rights reserved

mergers and the market concentration doctrine evidence from the capital market the last 3 decades of vigorous enforcement of u s antimerger laws is based on the market concentration doctrine one of the oldest and most controversial propositions in industrial economics this doctrine which is an implication of oligopoly models in the tradition of cournot 1838 1927 and nash 1950 holds that the level of industry concentration is a reliable index of the industry s market power the empirical implication is that a relatively high level of industry concentration which in the presence of entry barriers is believed to facilitate intraindustry collusion or dominant firm pricing should be associated with relatively large industrywide monopoly rents following bain 1951 numerous the market concentration doctrine predicts that a horizontal merger is more likely to have collusive anticompetitive effects the greater the merger induced change in industry concentration since a collusive anticompetitive merger generates an increase in the industry s quality adjusted product price or a decrease in factor prices it also follows from the doctrine that the mergerinduced expected benefits to the product market rivals of the merging firms should be an increasing function of the concentration change the empirical results of this paper which are based on the industry wealth effect of a large sample of horizontal mergers including cases found in violation of antimonopoly laws fail to support this prediction this conclusion is robust with respect to assumptions concerning the probability that a proposed merger will be prevented by the law enforcement agencies and it continues to hold after transforming the industry wealth effect into a hypothetical constant expected change in the industry s product price the results imply that the levels of concentration and market shares found in the department of justice s merger guidelines are unlikely to identify truly anticompetitive mergers i wish to thank paul asquith gregg jarrell rex thompson walter vandaele the participants of the economics workshop at the antitrust division of the u s department of justice and a referee of this journal for helpful comments earlier drafts were presented at the 1983 meetings of the european association for research in industrial economics and at the 1984 meetings of the western finance association financial support from the social sciences and humanities research council of canada grant no 494 83 0091 and the u s federal trade commission is also gratefully acknowledged 1 a closely related but somewhat less general prediction is that high levels of concentration should be associated with relatively high supracompetitive product prices although

how much can asset transfers help the poorest evaluating the results of brac s ultra poor programme 2002 2008 abstract the impacts of an innovative programme in rural bangladesh which has assisted extremely poor households literally the poorest of the poor were assessed over a six year period 2002 2008 the provision of a substantial dose of assets has helped produce very positive results by and large vulnerability to downturns on account of negative events such as illnesses and house damage has resulted in asset losses for several assisted households additional measures that reduce vulnerability and risk will help complete the good work commenced by the asset transfer plan

towards a unified scheme for environmental and social protection learning from pes and cct experiences in developing countries environmental protection and poverty alleviation in the developing world are usually heralded as joint objectives however these two goals are often associated with different sectoral policy instruments while so called payments for environmental services pes are increasingly being promoted for environmental protection poverty alleviation is increasingly addressed by conditional cash transfers cct program these instruments although aimed to achieve distinct objectives have a number of similarities and challenges in their design and implementation phases this paper elaborates on these similarities and develops a unifying generic framework that is used to discuss the extent to which both approaches could be unified

the economics of temporary migrations many migrations are temporary a fact that has often been ignored in the economic literature on migration such omission may be serious in that expected migration temporariness can impart a distinct dynamic element to immigrants economic behavior generating possible consequences for nonmigrants in both home and host countries in this paper we provide a thorough examination of the various aspects of temporary migrations that matter for the analysis of economic phenomena we demonstrate the extent of temporary migrations in population movements we show how temporariness can affect the various economic choices and how better data have improved both the measurement of nonpermanent migrations and the analyses of various aspects of migrant behavior we propose a general theoretical framework for modeling temporary migration decisions based on which we outline the various motives for temporariness while simultaneously reviewing related literature and available data sources we discuss the possible consequences of migration temporariness for nonmigrants in both home and host countries jel f22 f24 j11 j61 k37 o15

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

conglomerates and industry distress focusing on economic distress episodes in an industry we estimate the effect of conglomeration on resource allocation distressed segments have higher sales growth higher cash flow and higher expenditure on research and development than single segment firms this is especially true for segments with high past performance for unrated firms and in competitive industries single segment firms increase cash holding and the diversification discount reduces during industry distress firms with high past performance acquire their industry counterparts and firms with low past performance exit the distressed industry industries more prone to distress have greater conglomeration overall conglomeration enables segments to avoid financial constraints during industry distress the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

the demand side of social protection lessons from cambodia s labour rights experience summary in fragile states recent efforts to advance the social protection agenda have focused primarily on loosening supply side constraints but the resulting kaleidoscope of donor driven projects has often overlooked the need to create a sense of ownership by beneficiaries in part this is because it is unclear what political and social structures effectively facilitate activism in situations where state society relations are contentious we use cambodia s unusual success creating and sustaining a labor rights regime to illustrate the dynamics behind one type of social regime change that has opened up governance over worker protections in a sustainable and potentially replicable way

an intra and inter industry evaluation of three classification schemes common in capital market research we compare the standard industry classification sic the north american industry classification system naics and the global industry classification standard gics schemes in their effectiveness to group stocks with similar operating characteristics we are the first to analyse and compare individual functional category levels within and across each industry classification and test whether the three industry classifications show significant improvement in homogeneity with finer industry partitions across a wide range of research applications our results suggest that the gics system offers advantages over the other two systems in grouping firms across all its levels of industry categories and across different application schemes common to capital market research however the sic and naics offer additional advantages across their finest industry partitions our study has important implications for users of industry classifications in various financial and economic analyses research settings and regul

selection in migration and return migration evidence from micro data linked micro data from sweden and finland confirm predictions of migrant selection theory migrants are found to be negatively and return migrants positively selected on observable skills whereas there is only minor selection on unobservable skills

the limitations of industry concentration measures constructed with compustat data implications for finance research industry concentration measures calculated with compustat data which cover only the public firms in an industry are poor proxies for actual industry concentration these measures have correlations of only 13 with the corresponding u s census measures which are based on all public and private firms in an industry also only when u s census measures are used is there evidence consistent with theoretical predictions that moreconcentrated industries which should be more oligopolistic are populated by larger and fewer firms with higher price cost margins further the significant relations of compustatbased industry concentration measures with the dependent variables of several important prior studies are not obtained when u s census measures are used one of the reasons for this occurrence is that compustat based measures proxy for industry decline overall our results indicate that product markets research that uses compustat based industry concentration measures may lead to incorrect conclusions jel g10 g30 l10 a growing number of studies that consider the effects of product markets on financial economics related phenomena use industry concentration measures calculated with compustat data which cover only the public firms in an industry these studies examine issues related to asset pricing hou and robinson 2006 informed trading tookes 2008 idiosyncratic stock return volatility gaspar and massa 2006 mergers and acquisitions song and walkling 2000 fee and thomas 2004 shahrur 2005 corporate governance defond and park 1999 engel hayes andwang2003 rennie2006 karuna2007 capitalstructure lang and stulz 1992 kaleand shahrur 2007 corporate disclosurepolicy

is there a causal effect of concentration on persistent profitability differentials this article searches for a causal effect of industry concentration on estimates of persistent profitability differentials i offer solutions to identification problems that plague related analyses by applying an iv and a natural experiment this is the first study that explains estimates of persistent profit differentials using business segments data allowing to match micro and industry level data more consistently testing linear relations critical concentration levels and interactions with mobility barriers i find no evidence that concentration has any positive effect on long run profitability differences results rather tend to point to a statistically and economically significant negative causal effect

the real product market impact of mergers i document sources of value creation in mergers by analyzing novel data on the quality and price of goods sold by merging firms when two competitors in a product market merge their products converge in quality and prices fall relative to the competition these effects take two to three years to be fully realized and are stronger in mature industries prices do not fall however when the acquirer is diversifying into a new product market this direct evidence of real changes induced by merger activity is consistent with consolidation by related merging firms to achieve operational efficiencies and lower costs

product market competition and credit risk abstract this study theoretically and empirically investigates effects of product market competition on credit risk we first develop a real options based structural model in a homogeneous oligopoly and show that credit spreads are positively related to the number of firms in an industry the disparity of firm size in an industry is relevant to both product market competition and credit risk and we therefore extend the model to an asymmetric duopoly case in particular we demonstrate that credit spreads of relatively small large firms within an industry are positively negatively related to herfindahl hirschman index and the relative firm size in an industry is an important determinant of credit risk the models implications are empirically scrutinized by a reduced form hazard model and generally supported by performing out of sample analyses the results demonstrate that firm size together with the interaction terms between intra industry firm size dummies and competition intensity can effectively predict default

failure vs displacement why an innovative anti poverty program showed no net impact in south india abstract we analyze a randomized trial of an innovative anti poverty program in south india part of a series of pilot programs that provide ultra poor households with inputs to create new sustainable livelihoods often tending livestock in contrast with results from other pilots we find no lasting net impact on income or asset accumulation in south india we explore concerns with program implementation data errors and the existence of compelling employment alternatives the baseline consumption data contain systematic errors and income and consumption contain large outliers steps to address the problems leave the central findings largely intact wages for unskilled labor rose sharply in the area while the study was implemented blunting the net impact of the intervention and highlighting one way that treatment effects depend on factors external to the intervention itself such as broader employment opportunities

the place premium bounding the price equivalent of migration barriers large international differences in the price of labor can be sustained by differences between workers or by natural and policy barriers to worker mobility we use migrant selection theory and evide

one kind of freedom poverty dynamics in post apartheid south africa abstract a 1993 south african living standards survey documented the legacy of apartheid in the form high levels of inequality and human insecurity drawing on a 1998 re survey of households in the 1993 study this paper explores whether this legacy has been superseded or whether apartheid s end has been only one kind of freedom that has left households in a poverty trap from which they cannot escape after proposing a theoretically grounded dynamic poverty typology that distinguishes stochastic from structural poverty transitions the paper goes on to estimate that significant numbers of the south african poor are potentially trapped in a structural poverty trap and lack the means to escape poverty over time

investment efficiency and product market competition does more competition lead to more information production and greater investment efficiency this question is largely unexplored in the finance literature this article provides both a model and a series of extensive empirical tests the model features a 2 stage bayesian game in differentiated products market competition we find that competition causes firms to acquire less information and investments to become more inefficient relative to a first best case with the same market structure empirically the panel regression analysis provides strong support for the theory and shows that investment is more efficient in concentrated industries

estimating the average treatment effect of social safety net programmes in bangladesh since the famine in 1974 the bangladesh government and some national and international agencies have been providing food or cash or both to poor households through the social safety net programmes i seek to estimate how much these programmes affect the well being of poor households most previous studies have estimated impacts of these programmes on calorie consumption simply computing the raw differential however both observed and unobserved characteristics bias this treatment effect using fuzzy regression discontinuity rd design i control for these selection effects

income portfolios in rural ethiopia and tanzania choices and constraints the article analyses the different income portfolios of households using survey data from rural ethiopia and rural tanzania it suggests that the different portfolios held by households cannot be e

how effective is a big push to the small evidence from a quasi experiment summary this paper investigates whether a big push to the extreme poor in terms of a one off large grant enables them to participate in the microfinance program the analysis uses data from a quasi experiment on brac s ultra poor program in bangladesh the results for the baseline and repeat survey data for the treatment and comparison groups show that such a big push does make a significant impact on graduation to the microfinance program the results are robust to correction for self selection bias social capital and awareness also play important role in their decision on ngo membership and borrowing

an income strategy approach to the positive theory of accounting standard setting choice abstract this paper is designed to provide additional evidence on the positive theory of accounting policy choice by combining individual accounting principles into firm income strategies these strategies were the dependent variable in a probit analysis where the independent variables were size management compensation industry concentration ratio systematic risk capital intensity and the total debt to total asset ratio the results indicate that four of these factors size management compensation concentration ratio and the total debt to total asset ratio have a significant association with the choice of a firm s income strategy this test provides strong evidence consistent with the positive theory of accounting standard setting choice we also present evidence that smaller firms and or firms in less concentrated industries do not appear to make accounting policy choice decisions that are consistent with this theory

how does contract design affect the uptake of microcredit among the ultra poor experimental evidence from the river islands of northern bangladesh abstractthis study examines the demand of microcredit among ultra poor households in northern bangladesh we implemented a field experiment to identify what type of credit is best suited to their demand we found that the uptake rate by the ultra poor is the lowest for regular small cash credit followed by in kind credit we also found that the ultra poor are significantly more likely to join a microcredit programme than the moderately poor if a grace period with longer maturity is attached to a large amount of credit irrespective of whether the credit is provided in cash or in kind

investment and competition this paper examines how industry structure affects corporate investment patterns real options theory shows that deferring irreversible investment in the face of uncertainty is valuable theory also shows that the value of waiting to invest falls if investment opportunities are contestable consistent with these theories we find that firms in monopolistic industries exhibit lower investment q sensitivity and are slower to invest than firms in competitive industries however we find that investment q sensitivity and investment speed are highest in oligopolistic industries suggesting that the value of investing strategically can outweigh the value of waiting indeed oligopolistic industries experience less entry and more exit than other industries

exposure and markups this article examines how to properly specify and test for factors that affect exchange rate exposure starting from theoretical underpinnings and a sample of u s manufacturing industries between 1979 and 1995 we find that 4 of 18 industry groups are significantly exposed to exchange rate movements through the effect of industry competitive structure export share and imported input share on average a 1 appreciation of the dollar decreases the return of the average industry by 0 13 consistent with our model s predictions as an industry s markups fall rise its exchange rate exposure increases decreases exchange rate movements are an important source of risk for a firm they affect a firm s expected cash flows and or change the terms of competition for exporters importers and multinationals hung 1992 estimates that during the 1980s u s manufacturing industries lost approximately 23 billion year or 10 of total profits due to the dollar s movements surprisingly early studies which assume exchange rate exposure to be constant e g jorion 1990 bodnar and gentry 1993 and amihud 1994 find that exchange rates have no effect on the stock returns of u s multinationals exporters or manufacturing industries recently however allayannis 1997 and bodnar dumas and marston 1998 examine time varying exposure of industry returns 1 in particular the former article focuses on the effect the variation of u s industries import and export shares have on exposure while the latter focuses on pass through and exposure in a sample of japanese export oriented industries besides trade shares and pass through exchange rate exposure also depends on the markup of an industry specifically in industries with

estimating the impact of immigrants on the host country social security system when return migration is an endogenous choice in this paper i examine the impact of immigrants on the social security system in germany when return migration is an endogenous choice for this purpose i develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on immigrants from five different source countries i find that immigrants make positive net contributions to both the pension and unemployment insurance systems in germany regardless of their country of origin and age at entry moreover the magnitudes of the net contributions are remarkable for certain groups return migration plays a critical role in generating these positive net contributions in a counterfactual i examine how much exogenous modeling of the return decision which has been the practice of the literature so far changes immigrants net contributions such a restriction causes a serious misestimation of net contributions i also examine the impact of a counterfactual policy experiment in which financial bonuses are provided conditional on return to certain unemployed immigrants such a policy turns out to be ineffective in a number of dimensions

how does industry affect firm financial structure we examine the importance of industry to firm level financial and real decisions we find that in addition to standard industry fixed effects financial structure also depends on a firm s position within its industry in competitive industries a firm s financial leverage depends on its natural hedge its proximity to the median industry capital labor ratio the actions of other firms in the industry and its status as entrant incumbent or exiting firm financial leverage is higher and less dispersed in concentrated industries where strategic debt interactions are also stronger but a firm s natural hedge is not significant our results show that financial structure technology and risk are jointly determined within industries these findings are consistent with recent industry equilibrium models of financial structure copyright 2005 oxford university press