An Analysis of Post-Deregulation Savings-and-Loan Failures

A number of studies have looked at the financial characteristics of problem or failed savings and loans but none have used data taken exclusively from the post-deregulation period. In this paper, the financial characteristics of savings and loan associations that failed during the period 1984-II to 1985-I are analyzed, using both univariate difference in means tests and multivariate logistic regression. Both the known unequal population prior probabilities and the estimated unequal misclassification costs are taken into account in the logistic regression. The empirical results are compared to those of recent studies by Benston [7] and Barth, Brumbaugh, Sauerhaft and Wang [5] . The financial ratios that significantly affect the probability of failure are different in the three studies.     

Derivation of Cost of Capital and Equity Rates from Market Data

Use of the discounted cash flow (DCF) technique in investment and appraisal situations depends on readily available and reliable estimates of cost of capital and equity rates. Previous research on estimating equity rates and cost of capital from financial data sources is extremely limited and includes no evidence on the consistency of rates derived from alternative data sources. This paper derives estimates of equity rates and cost of capital from three alternative commonly available data sources. Estimates are derived separately for operating properties and for homebuilder/land developers on both a before- and after-corporate tax basis. The alternative data sources are found to yield consistent and reliable estimates of equity rates and cost of capital. Rates estimated from these sources are sufficiently accurate and reliable for most investment or appraisal applications.     

A Review of: “UNCERTAINTY AND ITS EFFECT ON CAPITAL INVESTMENT ANALYSIS,” by Martin B. Solomon,Jr. Management Science,Volume 12, No. 8, April 1966

In this paper we extend Thompson's [17] work using time series models within the discounted cash flow framework to estimate the cost of equity capita] for a firm. In particular we do the following: First, we prove the existence and uniqueness of a solution for the cost of equity capital. Secondly, we verify that the cost of equity function is continuously differentiable and derive the formula for its reliability. Formulas for both the cost and its reliability are in terms of infinite sums or infinite dimension matrices. Thirdly, we derive estimators of the cost of equity capital and its reliability which are in terms of finite sums and easy to calculate. We show that these estimated converge to the cost of equity capital and its reliability. Finally, our procedure for estimation applies to a wide variety of time series models that may be used to forecast dividends.     

收益率差异视角下股票流动性与资本结构关系的再检验

本文在股票收益率差异视角下，选择2000年1月到2015年12月期间中国沪、深市场307家上市公司数据，采用单方程估计法和联立方程组系统估计法研究我国上市公司股票流动性与资本结构的相互影响；并分别从股权分置改革、股权再融资、牛熊市行情三个方面对二者关系的变化与差异进行深入分析。结果表明：股票流动性与资本结构之间存在显著的负向关系，并且随着股票收益率水平的提高，负向影响越来越明显；股权分置改革后、满足再融资资格的上市公司以及牛市行情下两者的相互影响更显著。     

Emerging capital markets: A case study of equity markets in Pakistan

The Pakistan financial system displays all the classic characteristics of an emerging market: market capitalisation amounts to only 5.5% of GNP; less than 0.3% of the population are shareholders, resources mobilised through the capital market are insignificant compared to that through the banking system, and equities account for about 4% of the assets of the financial system.The pricing of both equity and debenture capital is administratively set by the Government. This has resulted in the shares of well-managed companies being issued at below market clearing price. Consequently, new shareholders benefit at the expense of original shareholders. Underwriters are denied any useful function and underwriting commission does not reflect perceived issue risk.There is a paucity of stock of well-run companies. The market also suffers from inadequate information flow and faces some fundamental institutional weaknesses. If the share buying habit is to increase and if savings are to be channelled into financial markets, appropriate mechanisms need to be developed for both broker and investor protection.The views expressed in this paper are those of its authors and do not necessarily represent the opinions of the International Finance Corporation. The information presented here in has been obtained from sources believed to be reliable, but is not guaranteed as to completeness or accuracy.     

Review of: “ EXPERIMENTS ON DECISIONS WIDER RISK: THE EXPECTED UTILITY HYPOTHESIS ” by Paul J. H. Schoemaker,Martinos Nijhoff Publishing,Boston, 1980, xxii + 211 pages,list $18.95.

Almost every capital budgeting textbook has a chapter on the weighted average cost of capital (WACC). Though this is theoretically satisfying, it does not describe how companies actually operate. The WACC calls for a balanced capital structure in which debt and equity are utilized at some predetermined percentage. The problem is that researchers have shown that firms try to avoid selling new shares whenever possible. This leads to the pecking order theory in which firms first use internal funds, then low-risk debt, then high-risk debt, and finally, as a last resort, new common stock. There is no attempt to balance the capital structure. This survey study basically confirms that approach.     

Savings and Loan Demand for Liquid Assets: Theory,Evidence and Implications for Policy*

In this study a model of liquid asset management for individual savings and loan associations is developed. The model combines features of portfolio theory and inventory theory and is used to draw hypotheses on the relationship between the demand for excess liquidity and a variety of independent variables. Pooled cross section-time series equations are estimated for the demand for excess liquidity of 198 S & Ls over the period 1974–1978. In addition to conclusions on the role of individual variables, the estimated equations reveal that the FHLBB can affect the portfolios of some, but not all, S & Ls. This implies that FHLBB liquidity policy can have an effect on the mortgage market.     

REIT Dividend Determinants: Excess Dividends and Capital Markets

The determinants of excess dividend payments above mandatory requirements in real estate investment trusts (REITs) are evaluated. Payment of excess dividends is related to factors associated with reduced agency costs, strong operating performance, the implementation of a stock repurchase plan and an ability to access short-term bank debt. Recognizing that access to external capital is essential for long-term growth, REITs manage dividend policy to allow for capital acquisition in the form of both equity and debt. The acquisition and use of short-term bank debt provides REIT management flexibility in determining dividend policy.     

智力资本出资的理论分析与制度设计

现代企业的一个主要矛盾是处理财务资本和智力资本的关系问题。企业的高能激励使得智力资本所有者拥有了一部分股权，但他们还不是真正意义上的出资者。对智力资本的产权特征、价值属性和出资适格性的分析表明，如果通过制度设计，克服智力资本在产权特征和价值属性上的缺点，使得智力资本能够像财务资本那样作为出资，则现代企业的基本矛盾可以得到进一步缓解。     

基于培训视角的企业人力资本存量研究

知识经济时代,人力资本逐渐取代物质资本,成为经济发展的决定性因素.本文通过构造企业内部培训员工的完全信息模型和委托专业培训机构外包培训员工的不完全信息模型,从微观角度研究了决定企业培训员工数量(人力资本存量)的内在机理.研究表明:在完全信息情况下,企业培训的员工数量由员工产出水平提高所带来的“产出效应”和“节约效应”共同作用的结果;在不完全信息情况下,当专业培训机构的培训成本低于某一值时,企业进行外包培训获得的人力资本存量多于内部培训.最后,针对目前我国人力资本存量匮乏的现状,为政府对企业进行员工培训所采取的财政补贴和农民工再就业培训等方面的政策提供了理论依据.     

Environmental risk management and the cost of capital

Our study of 267 U.S. firms shows that improved environmental risk management is associated with a lower cost of capital. Our findings provide an alternative perspective on the environmental‐economic performance relationship, which has been dominated by the view that improvements in economic performance stem from better resource utilization. Firms also benefit from improved environmental risk management through a reduction in their cost of equity capital, a shift from equity to debt financing, and higher tax benefits associated with the ability to add debt. These findings help build better theory regarding the outcomes of strategic improvements in environmental risk management. Copyright © 2008 John Wiley & Sons, Ltd.     

Residential Mortgage Markets: Current Developments and Future Prospects

Historical developments as well as current innovations have generated significant changes in the structure and operation of the residential mortgage market. General economic stability, a low inflation rate, growth of savings and loan associations, and strong consumer demand marked the fifteen-year period immediately following World War II. In contrast, the decade of the sixties was characterized by increased competition in the mortgage market, a series of credit crunches, and increased governmental activity. In reaction to these and related developments, current innovations affecting the mortgage market focus on design of new mortgage instruments, improvements in market efficiency, and reform of financial institutions. If history is a guide, it suggests that the residential mortgage market responds flexibly to adverse conditions.     

An Analysis of REIT Security Issuance Decisions

This article tests the ability of traditional capital structure theories to explain the issuance decisions of real estate investment trusts (REITs). For issuances made between 1997 and 2006, we find strong support for the market timing theory of capital structure. Controlling for past returns and growth, a REIT is more likely to issue equity when its price-to–net asset value ratio is high. This suggests that REITs issue equity in public markets when the cost of equity capital is lower in the public market than in the private market. Consistent with traditional market timing, REITs are more likely to issue equity after experiencing large price increases. We also find some support for REITs following the trade-off theory of capital structure. REITs are less likely to issue debt when proxies for expected bankruptcy costs are high.     

Linking corporate strategy to capital structure: diversification strategy,type and source of financing

This study examines the relationship between corporate strategy and capital structure, specifically the diversfication and financing strategies of a firm. The results show that equity financing is preferred for related diversification and unrelated diversification is associated with debt financing. Additionally, firms diversifying through acquisitions are more likely to use public sources of financing and those emphasizing internal development of new businesses depend primarily on private sources of financing. Using simultaneous equation estimation, we found a reciprocal relationship between a firm's financial strategy and its corporate diversification strategy. Mode and nature of diversification are also reciprocally interrelated. © 1998 John Wiley & Sons, Ltd.     

Predicting Failure of Savings & Loan Associations

Early-warning systems are intended to provide regulators with identification of problem institutions sooner than is possible with the present system of call reports and periodic on-site examinations. Given an earlier indication of potential problems, resources can be focused on those institutions most in need of monitoring, thus potentially reducing both the number of failures and FSLIC financial assistance in the remaining failures. While some early-warning systems were developed in the mid-1970s for use by commercial bank regulators, very little attention has been focused on developing similar systems for the thrift industry. To address this issue, multiple discriminant analysis was used to develop an early-warning system for savings and loan associations in the Boston district of the Federal Home Loan Bank system. The results suggest that use of this model would have given signals of impending trouble well before the actual failure occurred. Consequently, an early-warning system could provide information to regulators sooner, permitting scarce resources to be allocated more effectively. In addition, earlier intervention could reduce the amount of FSLIC financial assistance required. By intervening earlier, FSLIC may be able to arrest the failure-promoting activities in which the association is engaged.     

数字普惠金融与商业信用二次配置

商业信用二次配置是企业充当信用中介,将银行信贷等资金通过商业信用的渠道为供应链的上下游中小企业提供融资支持,这会导致资金供给链延长,加剧了供应链系统性风险,而数字普惠金融发展的重点在于为中小企业提供直接融资,因此,其能否抑制商业信用二次配置,对于防范金融风险和促进实体经济稳定发展具有重要意义。本文深入探讨了数字普惠金融对商业信用二次配置的影响及其作用机制,研究发现:数字普惠金融有助于降低商业信用二次配置,有效减少了企业利用商业信用把长期借款资金进行二次配置的行为,而且该抑制作用对于外部融资能力较强的企业更加明显。机制检验表明,数字普惠金融通过减少上市公司超额银行信贷抑制商业信用二次配置。进一步分析显示,在外部市场竞争程度较低、内部风险较低、现金持有水平较高以及非高科技企业中,数字普惠金融对上市公司商业信用二次配置的抑制作用更加明显;而且,数字普惠金融在降低商业信用二次配置的同时,对于促进企业创新投入具有一定的积极作用。本文研究表明,数字普惠金融通过增加中小企业直接融资,减少了资金供给的中间环节,进而抑制大型企业充当"影子银行"进行资金的二次配置。     

中国西部地区金融发展支持经济增长的实证研究

文章从金融资产结构的角度(包括银行贷款、保险资产以及股票等)对西部地区1985~2010年的金融发展与经济增长的关系进行了实证研究,结论表明:保险市场对经济增长的推动作用不显著;股票市场对西部地区经济的贡献率仅为0.0834;银行贷款显著地促进了西部地区的经济增长,其中短期贷款的贡献最大;从贷款投向来看,工业贷款贡献率最大,其次是农业贷款,最后是第三产业贷款。结合本文实证结论,提出了优化和改善西部地区银行体系的信贷结构、继续增加对西部地区农业的有效资金投入、通过加大对第三产业授信规模来提高第三产业在国民经济中的比重、同时提高第三产业就业吸纳力等政策建议。     

煤电纵向交易关系:决定因素与选择逻辑

专业化经济可以带来长期平均成本节约,整合化经济可以产生交易费用节约,两条费用曲线的交叉点决定了煤、电纵向交易关系最优形式的选择。影响专业化经济效率的主要因素是生产技术和专用性人力资本价值,影响整合化经济效应的主要因素是交易技术和制度环境。对应于不同的因素特征,煤、电企业纵向交易关系最优形式选择存在差异,并随影响因素特征变化而动态演化。     

Bias and Error in Mine Project Capital Cost Estimation

Previous analyses of small samples of mining projects have found that feasibility studies tend to underestimate the as-built capital costs of the project. Our review of 63 international mining and smelting projects confirms that as-built capital costs are, on average, 14% higher than as estimated in the bankable feasibility study. There is little attenuation over time of this bias in capital cost estimation, appearing to reflect an absence of learning on the part of the project sponsor or the consulting engineering firm. We argue that this persistence of bias is instead intentional and rational, driven by a scarcity of project financing and the need by project sponsors to inflate the project economics in a bid to secure financing. We find some empirical support for our contention. A second phase of the analysis examines estimation error. Roughly half of all projects' as-built capital costs fall outside of the expected ± 15% of the feasibility study capital cost estimate, even after allowing for intentional estimation bias. Cost overruns of 100% or more happen in roughly 1 out of 13 projects. Smaller projects have less estimation accuracy than large projects. Finally, our analysis of the cost overrun data reveals that a shifted lognormal probability distribution should be used when modeling mining project capital costs in a Monte Carlo analysis.     

The Impact of Homeowners' Housing Wealth Misestimation on Consumption and Saving Decisions

Using a unique data set of 81,943 house value estimates by the homeowners and their financial institution, I find that homeowners overestimate their house value by 3.1%. After controlling for homeowners' socioeconomic characteristics, I find that ex ante homeowners who rate (cash-out) refinance an existing loan to increase savings (consumption) are significantly more likely to underestimate (overestimate) their house value. Moreover, overestimators (underestimators) are more likely to increase (reduce) their spending ex post . Finally, I also find that underestimators are more likely to prepay their loans and overestimators are more likely to default on their loans.