bank acquisitions and ownership structure theory and evidence abstract in this paper we both theoretically and empirically consider the joint nature of two ownermanager conflict resolution mechanisms insider shareholdings and shareholder concentration we find evidence of a significant entrenchment effect for high low firms moreover bidder returns are found to be positive for high high firms only we utilize a switching of regression regimes model to solve for critical values of and that subdivide the universe of acquiring firms into separate and distinct ownership structure regimes i e that define high vs low levels of or

small firms and the merger mania empirical research has found an average or even superior performance of small firms this seems to be at variance with the secular concentration process and the recurrent merger waves this paper tries to integrate size and merger research higher profitability of small firms is explained by their incentive structure and shorter decision lags but also by lower wages and higher individual risk premia their faster growth in the eighties was in addition fostered by diversification of demand miniaturization of technology and a need for flexibility under uncertainty the merger wave on the other hand does not necessarily prove that large firms are superior managers and shareholders may be seduced by stockmarket optimism a sizeable industry of banks agents and lawyers have their own interests in mergers mergers may be important in declining markets and for the acquisition of technology on average mergers do not improve efficiency profits or internal growth small and large firms serve different purposes performance depends on the market incentives and technology the establishment growth and closure of small firms as well as mergers are attempts to find the optimal organization for utility maximization in a world of severe uncertainty and diverse needs

propensity to consume farm family disposable income from separate sources farm family disposable income is generated from farm operations off farm sources and government payments if these three income components are fungible a dollar from one source is a perfect substitute for a dollar from another source then the propensities to consume each should be the same this study examines the farm family propensity to consume from separate income sources results indicate that the propensity to consume off farm income and government payments is higher than the propensity to consume farm income

number of bids number of bidders and bidding behavior in outer continental shelf oil lease auction markets abstract theoretical models of auction bidding markets typically treat number of bids and number of bidders as equivalent measures when joint bidding opportunities exist this assumption will often not hold in cases such as offshore oil auctions joint bidding is an extremely common occurrence our analysis of these auctions suggests that the actual number of bidding participants is more closely related with variables of interest winning bids average bid per acre etc than is the simple number of bids we argue that analyses such as that presented here are important in developing theoretical models that are useful in explaining or predicting actual bidding auction outcomes

early resolution of troubled financial institutions an examination of the accelerated resolution program abstract this paper expands the empirical research on the auctions of failed financial institutions by examining the thrift industry accelerated resolution program as an alternative to the standard auction procedures jointly managed by the office of thrift supervision and the resolution trust corporation the objective of this program was to intervene before insolvency and thereby to reduce the regulatory expenditures previous research has often found the existence of a wealth transfer to the winning bidders in both commercial bank and thrift auctions in contrast to this previous research no evidence is found in this study to conclude that a wealth transfer occurred in standard resolution trust corporation auctions furthermore while the accelerated resolution program yielded positive abnormal returns there is also no evidence of a wealth transfer

sealed bids sunk costs and the process of competition how do firms recover precontract costs for example suppose 10 firms compete in a sealed bid auction for the right to explore and develop an offshore oil field each spends 500 000 to estimate the value of the field and to prepare its bid suppose this investigation reveals that the tract is worth approximately 20 million if sunk costs do not matter competition dictates that the winner must bid 20 million but if the winner is to recover its prebid costs the maximum offer can be only 19 5 million furthermore long run industry equilibrium considerations suggest that the highest bid will be only 15 million 20 million minus the total bid preparation costs of 5 million if competition forces firms to charge marginal cost why do firms ever invest in resources which become sunk in some industries inframarginal rents can be used to recover these costs however the example above as well as many others involves an all or none deci

structural estimation of the affiliated private value auction model we consider the structural estimation of the affiliated private value apv model in first price sealed bid auctions the model allows for bidders individual efficiencies and opportunity costs while permitting dependence among bidders private values through affiliation we establish the nonparametric identification of the apv model characterize its theoretical restrictions and propose a computationally convenient and consistent two step nonparametric estimation procedure for estimating the joint private value distribution from observed bids using simulated bid data we provide a step by step guide on how to implement our procedure and show the good behavior of our estimator in small samples

testing the response of consumption to income changes with noisy panel data this paper tests the rational expectations lifecycle model of consumption against i a keynesian model and ii the rational expectations lifecycle model with imperfect capital markets the tests are based upon the relative responsiveness of consumption to income changes that can be predicted from past information and income changes that cannot he predicted the tests allow for measurement error in income the results reject the keynesian model and generally support the lifecycle model but the results are not sufficiently precise to rule out the possibility that some households are liquidity constrained measurement error has a strong influence on the relationship between consumption and income

off farm work decisions of husbands and wives joint decision making theoretical and econometric models are developed to examine joint wage labor participation and hours decisions of a husband and wife in farm households the econometric model is multiple equation and recursive the specification of the off farm labor supply equation of the husband wife depends on whether his her wife husband does or does not work off the farm and this structure is endogenous the model is fitted to data for iowa farm households the main conclusion is that the off farm labor supply equation of a married individual differs significantly depending on whether his or her spouse also works for a wage copyright 1989 by mit press

estimating labor supply of farm households under nonseparability empirical evidence from nepal abstract this paper examines the labor supply of farm households in nepal using a recently developed methodology that accounts for the simultaneity between production and consumption decisions of the households estimates of marginal products of male and female labor or shadow wages are obtained from an agricultural production function an instrumental variable approach is then used to recover the household s structural labor supply from variations in the shadow wages and income as well as other household characteristics the findings reveal that both male and female total labor supply are sensitive to changes in shadow wages and income human capital embodied in education is found to exert a significant positive effect on output but has no statistically significant impact on total labor supply of individuals the results also rejects the existence of efficient labor markets in rural nepal

the price effects of increased competition in auction markets bidding theory predicts low er selling winning bids higher buying winning bids as numbers of bidders incre ase alternative versions predict that winning bids fall rise with the second order statistic the maximum order statistic or 1 n the authors test these pre dictions using data on underwriters spreads on tax exempt bonds offshore oil t racts and national forest timber they estimate winning bids using general vari ables for the product and dummies for 1 2 11 bidders in all cases mor e bidders meansignificantly lower selling winning bids the expected maximum order statistic fits better than either the second order statistic or1 n in te n out of twelve cases copyright 1987 by mit press

farm consumption and liquidity constraints this study examines whether farm family consumption is liquidity constrained results using 1976 to 1990 data for groups of illinois and kansas farms indicate that consumption behavior is not liquidity constrained analysis of 207 kansas farms in 1989 and 1990 provides similar results these results are in contrast to findings for nonfarm families and support the validity of using the life cycle permanent income hypothesis for farm level modeling and analysis

a market evaluation of fdic assisted transactions abstract this study updates and extends the literature regarding federal deposit insurance corporation purchase and assumption transactions unlike voluntary mergers our results indicate that winning bidders do not overpay moreover our results indicate that acquiring banks s undertaking large failed bank transactions experienced large wealth transfers excess returns may be explained by the synergy hypothesis or over subsidization hypothesis we conclude that excess returns are not driven by scale or scope economies evidence is consistent with diversification gains or the over subsidization hypothesis it also appears that well capitalized acquirers received preferential treatment

the limitations of market value accounting and a more realistic alternative abstract market value accounting mva might improve market and regulatory discipline on financial institutions unfortunately there are serious conceptual measurement and incentive problems with implementing mva that have not received significant attention these problems are suggested by the theory of asymmetric information and the role intermediaries play in solving information and monitoring problems after analyzing the problems with mva we develop an alternative approach that applies mva principles where they are most feasible and uses a statistical procedure where asymmetric information problems make mva particularly problematic an empirical analysis suggests that this procedure may substantially improve the distribution of regulatory discipline

testing theories of consumption behavior using information on aggregate shocks income seasonality and rainfall in rural india we develop an integrated framework for testing theories of consumption behavior by examining how agricultural households in rural india respond to anticipated and unanticipated seasonal income fluctuations using information on village level rainfall surprises we estimate idiosyncratic unanticipated income shocks by allowing weather risk to impact households differently depending on observable characteristics in applying our methodology to unique panel data on consumption debt and intrahousehold gift exchanges we address a number of shortcomings in previous tests of theories of consumption behavior yet we find no evidence against the hypothesis that households smooth idiosyncratic fluctuations in their income our approach also uncovers several interesting features of rural credit and insurance markets

the resolution of failed banks during the crisis acquirer performance and fdic guarantees 2008 2013 abstract we find that winning bidders in fdic failed bank auctions from 2008 to 2013 experience substantial positive abnormal stock returns returns are inversely related to bid amounts after controlling for bid determinants consistent with wealth transfers from the fdic providing implicit subsidies to acquirers the results challenge arguments that wealth transfers in earlier crises stemmed from since eliminated bidding restrictions but support the prediction of cash in the market pricing theory that during crises resolution through acquisition requires subsidization winning bid amounts are related to proxies for cash in the market pricing fdic loss sharing not widely used before the recent failure wave is an important influence on bids

does capital market structure affect farm investment a comparison using french and british farm level panel data this article considers whether differences in the structure of agriculture credit markets in france and the united kingdom alters the investment sensitivity to financial variables particularly cash flow using two panel datasets of french and british farms three approaches are used to test the sensitivity of investment to internal finance an inventory investment model a fundamental q model and euler equations for machinery investment the results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment this article explores whether differences in the structure of agricultural credit markets in france and the united kingdom affects access to credit theoretically asymmetric information in capital markets means that banks base their lending decisions on factors such as available collateral rather than projected profitability stiglitz and weiss binks and ennew hubbard if such information costs are affected by market structure the organization of the market also becomes a potentially important factor historical differences in the structure of agricultural capital markets in developed countries have long been recognized oecd in particular in many countries specific agricultural credit institutions for example farmer cooperative banks appeared in the first half of the twentieth century because of the difficulties faced by farmers in obtaining credit from commercial lenders the degree of state involvement in agricultural credit markets has also varied considerably across countries from

farmers marginal propensity to consume an application to illinois grain farms the marginal propensity to consume mpc for a sample of eighteen illinois farms over the 1979 86 period is determined four consumption models were estimated using disposable household income plus depreciation as the measure of income estimated short run mpcs ranged from 0 007 to 0 020 while long run mpcs varied between 0 143 to 0 381 these results indicate farm family consumption responded little to changes in income and that the life cycle hypothesis model explains consumption significantly better than the other models robustness of the results is demonstrated using a larger sample of farms for 1986 87

off farm labor supply responses to permanent and transitory farm income a sample of iowa farm couples is used to evaluate whether off farm labor supply decisions respond to permanent and transitory components of farm income off farm labor supply of both spouses declines in response to increases in permanent farm income farm wives also reduce off farm labor supply in response to positive transitory farm income shocks consequently one mechanism farm households use to smooth their goods consumption when facing fluctuating farm income is to modify their consumption of leisure ability to smooth goods consumption does not imply the absence of liquidity constraints among farm households unless leisure consumption is also smoothed

short term employment transitions of the canadian labour force rural urban differences in underemployment using data from the canadian survey of labour and income dynamics slid for the period 1993 1996 we examine patterns and determinants of labour force transitions of adequately employed and underemployed workers in an attempt to explore whether employment dynamics significantly differ between rural and urban workers so as to disadvantage rural economic performance the results indicate that rural adequately employed workers are significantly more likely to enter underemployment but once they are underemployed they also have a higher probability of re entering adequate employment further we also found weak evidence that the education level of workers has a lower impact on the probability of moving out of underemployment in rural than in urban areas in addition rural women are significantly less likely than their male counterparts and urban workers to enter adequate employment although the presence of young children does not seem to especially constrain the employment of rural women the results suggest that labour force transition in and out of adequate employment and particularly underemployment significantly differ between rural and urban workers and should be taken into account when evaluating employment hardship in rural canada

seasonal labor utilization in agriculture theory and evidence from agrarian households in india this paper develops and tests a dynamic stochastic model of seasonal labor demand of farm households in a developing country seasonality in agriculture is modeled as a dynamic two stage process planting and harvesting with sequential dependence of decisions yield risk is an important determinant of behavior in the planting stage only the proposed model is estimated using plot specific cross section time series data from india consistent estimates of the male and female labor demand functions in the planting and harvesting stages are obtained by panel data econometric methods that control for the nonseparability of the model

the winner s curse and bidder competition in acquisitions evidence from failed bank auctions this study examines the effect of bidder competition in acquisitions we use predictions from auction theory to test whether acquirers of failed banks overpay the winner s curse when bidding in fdic sealed bid purchase and assumption p a transactions auctions the empirical results indicate that winning bids tend to increase as the number of competitors increases as predicted by theory we also find that bid levels of all bidders increase with increased competition which is consistent with bidders failing to adjust for the winner s curse in a common value auction setting however additional tests using winning bids only are consistent with both a common value and a private values model so this result should be interpreted with caution the winner s curse hypothesis states that the winner of a sealed bid auction in which the value of the object being competed for is uncertain tends to be the one who most overestimates the true value of the auctioned object as a result auction winners who fail to recognize this possibility are likely to be cursed by having paid more for the object than its true worth this hypothesis has been applied to various situations including bidding on oil and gas leases capen et al 3 and corporate takeovers roll 16 varaiya 19 support for the existence of the winner s curse has been reported primarily from laboratory experiments bazerman and samuelson 1 kagel and levin 12 testing of the winner s curse hypothesis with market data is in its early stages gilley karels and leone s 7 study of bidding for oil leases provides mixed suport brannman klein and weiss 2 examine bidding behavior in a variety of auction markets and interpret some of their results as supporting the winner s curse hypothesis our study examines the effects of bidder competition and the winner s curse hypothesis within the context of fdic auctions of failed banks our study may also have relevance for the broader corporate control literature this literature uniformly indicates that shareholders of acquired firms earn large

how to achieve green growth in china s agricultural sector abstract green development is the direction of china s agricultural sector investigating the main influencing factors of the agricultural sector s co2 emissions will help plan agricultural development and achieve low carbon growth this paper selects 2001 2016 panel data of china s 30 provinces and uses the nonparametric additive regression models to investigate the agricultural sector s co2 emissions the empirical results show that economic growth financial capacity and energy intensity all have a pull first then restrict inverted u shaped nonlinear effect on co2 emissions however the influencing mechanisms of these three influencing factors are different and need to be paid attention by relevant government departments more complicated the impact of urbanization on co2 emission shows a gentle m shaped pattern in addition an inverse n shaped nonlinear link exists between trade openness and co2 emissions therefore government departments should formulate differentiated emission reduction policies at different stages

multiple job holdings among dairy farm families in new york and ontario abstract previous empirical studies of multiple job holding have tended to focus on the characteristics of those obtaining off farm employment and the factors affecting the hours supplied to those obtaining off farm activities none of these studies have explicitly addressed the reasons behind the decision to seek off farm employment neither have they been able to examine in depth the important issue of how this major component of the farm sector responds to alternative policies since most studies have used cross sectional data for a given region a comparison between countries would permit the analysis of how multiple job holding responds to differing government policies the purpose of this paper is to examine the reasons for and factors affecting multiple job holdings of dairy farm families in neighboring regions of two counties united states and canada the bordering regions of new york and ontario have similar geographic conditions but significantly different farm support and social service policies the results indicate the importance of farm income on why people work off the farm and provide evidence of multiple job holding as a flexible mechanism for coping with changes in the economic environment facing the household for operators the driving characteristics influencing off farm labor participation is the farm s financial position the supply managed milk marketing system ensures higher and more stable returns for ontario dairy farm labor in contrast it is family demographics educational level and social support policy that appears to largely influence spousal off farm employment decisions free medical care in ontario lowers the reservation wage for household members the effect of these farm and social support policies on the relative returns to labor in agriculture and non farm employment explains the lower participation rate and hours supplied in off farm work by both operators and hours supplied in off farm work by both operators and spouses in ontario dairy farm household

farm income variability and the supply of off farm labor if farmers are risk averse greater farm income variability should increase off farm labor supply this effect is confirmed for a sample of kansas farmers off farm employment of farmers and their spouses is also found to be significantly influenced by farm experience off farm work experience farm size leverage efficiency and farm specific education in addition farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm this may suggest that policy changes reducing farm income support payments may increase off farm employment of farmers and their spouses

fundamental q cash flow and investment evidence from farm panel data this study used a 1976 1992 panel data set to test whether farm machinery investors face finance constraints tests were based on fundamental q investment equations in which cash flow was added as an additional explanatory variable results indicated that 1 credit constraints were generally not a problem during the 1970s boom 2 credit constraints became a problem during the 1980s and early 1990s because of tighter credit and or more conservative financial managerial styles 3 the investment cash flow relationships of low debt and older operator farms were not significantly affected by farm business cycles and 4 the investment cash flow relationships of high debt and young operator farms were affected strongly by business cycles debt level was the strongest determinant of credit constraints asset size and operator age were less important

rational entry into risky markets with negative expected returns the role of biased misestimation of profit potential abstract we extend the theory of negative long run profits in risky industries by incorporating a negatively skewed profit distribution rational behavior with incomplete information is introduced by allowing economic agents to know the median rather than the mean rate of return we compare this to the case involving postdecision bolstering where entrants choose to discount available information on the industry profit distribution monte carlo experiments are tailored to the experience of the u s home building industry

determinants of nonfarm earnings of farm based husbands and wives in northern ghana the nonfarm work participation decisions of married men and women in rural northern ghana were jointly and separately estimated for married couples through a bivariate probit using recent survey data selectivity bias was corrected for in estimating wage offer and labor supply equations using heckman s procedure education experience infrastructure distance to the capital and population density as well as interactions between education and infrastructure and between education and distance to the city were found to be significantly related to the probability of nonfarm labor market participation wages and the amount of nonfarm labor performed with significant differences by gender

local economic conditions and wage labor decisions of farm and rural nonfarm couples effects of geographical differences in local economic conditions on wage labor demand and wage labor participation decisions of rural couples are examined for current population survey households 1978 82 wage premiums are shown to exist for localities anticipating labor demand growth higher unemployment rates larger share of employment in services and higher costs of living these effects are stronger for males than females effects of local economic conditions on the probability of wage work are consistent with expected market wage and reservation wage effects and for farm households the probability of wage work increases when expected farm output prices decline or the wage increases

labor force participation and earnings determinants for women in the special conditions of developing countries abstract little systematic analysis exists regarding hypothesized special labor market conditions for women in developing countries this study explores such conditions in nicaragua major results are i small children affect participation less than in developed countries due to child care from extended families or while on informal sector jobs and the necessity for poor mothers to work ii schooling and experience have major roles affecting work sector and earnings but the primary school return is half that cited by the world bank iii other human capital variables particularly nutrition have some impact

systemic risk mitigation in financial networks abstract we propose a multi period clearing framework where the level of systemic risk is mitigated through the provision of liquidity assistance the interbank liability network evolves stochastically over time and assets of defaulted banks are sold to qualified banks within the network through a first price sealed bid auction we find that policies targeting systemically important banks are more effective in core periphery network structures whereas those maximizing the total liquidity in the system are preferred in random network configurations we assess sensitivity of systemic risk to variations in interbank liabilities as well as to their correlation structure

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

an analysis of fdic failed bank auctions abstract this paper examines whether the sales mechanism used by the fdic in failed bank auctions results in wealth transfers from the fdic to the acquiring banks we test this hypothesis by examining the returns to winning bidders in fdic auctions we find positive abnormal returns to these bidders more importantly we find a negative and significant relation between the returns to winning bidders and the number of bidders participating in the auction this evidence suggests that the fdic s auction procedures do generate wealth transfers

non aggressive bidding behavior and the winner s curse previous authors have noted a curious result that arises within the context of sealed bid auctions in certain situations it is in the bidder s interest to respond non aggressively to increased competition we consider a decision theoretic formulation of the bidder s problem and derive necessary conditions for the choice of a non aggressive bidding strategy the resulting conditions relate closely to a phenomenon that has been described rather loosely by bidding practitioners as the winner s curse in the course of this paper we develop a specific definition of the winner s curse and demonstrate how it affects the firm s competitive behavior

risk financial markets and human capital in a developing country this paper explores the link between financial market incompleteness and human capital accumulation we examine how child school attendance responds to seasonal fluctuations in the income of agrarian households using panel data from rural india to pinpoint market imperfections we study responses to aggregate and idiosyncratic as well as to anticipated and unanticipated income shocks our main finding is that seasonal fluctuations in school attendance are a form of self insurance but one which does not result in a substantial loss of human capital on average

the off farm work behavior of farm operators there is widespread concern about the opportunities for people to begin farming most observers argue that the financial barrier to entry into agriculture has risen relative to farm incomes several authors have pointed to off farm earnings as one important way to overcome this barrier coffman carlin and ghelfi steeves steeves in particular cited evidence that fewer than 20 of canadian farm entrants between 1966 and 1971 recorded no significant off farm work in 1971 nearly 43 of these entrants worked 229 to 365 days off the farm in that year similar evidence for farm entrants in iowa is found in kaldor and jetton hence off farm work by new farmers is often viewed as an important way to manage the high capital investment required to establish a viable farm this viewpoint is not the only one possible neoclassical theory predicts that farmers increase off farm work when marginal returns to off farm work become larger than marginal returns to farming lee bollman sumner because entering farmers often have current off farm work skills they may choose some off farm work regardless of the financial obligations of farming because offfarm work skills depreciate and returns to farming appreciate over time established farmers are less likely to engage in off farm work clearly a simple correlation between farm entry and off farm work will not allow us to distinguish between these views this paper develops two formal models of offfarm labor supply to examine these two interpretations first it analyzes the off farm work decisions in a conventional utility maximizing framework consistent with the view that off farm work is chosen when marginal returns to farming fall below potential off farm returns the paper then analyzes the off farm work decisions when an income target reflecting the need to meet the financial obligations of farming is the objective the paper demonstrates that these models produce divergent predictions about off farm work decisions only under the assumption that the higher financial obligations exceed the higher returns to work on larger farms the models are then tested under this assumption using the 1978 agricultural enumerative survey for the canadian province of saskatchewan

the off farm labor supply of farmers theoretical and empirical models are developed to examine the off farm wages labor force participation and hours of work of farmers econometric estimates use data from a 1971 survey of illinois farmers the off farm wage depends on farmer human capital and the local labor market the major result confirms the sensitivity of off farm work to economic incentives a 10 increase in the off farm wage entails an 11 increase in hours of off farm work holding farm characteristics constant results also indicate effects of seasonality risk and life cycle factors on off farm work

credit constraints farm characteristics and the farm economy differential impacts on feeder cattle and beef cow inventories a recurrent topic in the macroeconomic literature is the financial accelerator the notion that informational asymmetries introduce inefficiencies to financial markets which amplify and propagate the effects of real or monetary shocks with the purpose of finding empirical evidence that is consistent with a financial accelerator operating in the cattle sector inventory investment models are estimated with an appended cash flow variable the inclusion of cash flow is motivated by the notion that investment by credit constrained farms should be sensitive to movements in internal funds results are consistent with the financial accelerator operating in the feeder cattle but not in the cow calf sector

uncertainty experience and the winner s curse in ocs lease bidding this paper presents an empirical test of the major hypothesis of the currently accepted bidding models in two regions of differing tract value uncertainty the most significant result is an empirical verification that the more bidders that bid on a particular parcel in the face of great uncertainty the lower the bid levels of individual firms that participate given all else is constant no such relationship was observed however in the sale where there was previous bidding experience and prior ownership of closely related tracks prior models have not been able to identify the inverse relationship because of a bias that occurs when only positive bids are employed in these models and the use of data where previous experience reduces uncertainty in the analysis of the competitive bidding situation we use a two stage procedure which adjusts for this selection bias by allowing for the incorporation of information from the dichotomous bid no bid decision in the modeling of bid level

labor market opportunities and intrafamily time allocation in rural households in south asia this paper utilizes a time allocation survey of a four year panel of households from six villages in semi arid tropic rural india estimates of the inter relationships between adult male female and child market wage rates and time allocated to the market domestic production leisure and schooling by boys and girls are presented the role of individual unobservable heterogeneity and self selection into activity participation is also accounted for the overall results suggest the importance of the opportunity cost of time in intrafamily time use