Apples and oranges? Corporate rescue and functional convergence in the US and UK

This paper challenges the standard characterisation that US law in the sphere of corporate bankruptcy is ‘pro debtor’ and UK law is ‘pro creditor’. It suggests that the traditional thesis is, at best, a potentially misleading over‐simplification. It also offers the conclusion that there is functional convergence in practice, while acknowledging that corporate rescue, as distinct from business rescue, still plays a larger role in the US. The functional convergence has partly come through the UK Enterprise Act 2002 but the paper suggests that the main move has been that of US law and practice in a UK direction with more emphasis on business disposals and speedier cases than on corporate reorganisations, as traditionally understood. This mirrors practice in the UK where the emphasis has always been on business disposals. Unfortunately, the current economic recession on both sides of the Atlantic has shone a heightened spotlight on business bankruptcy and is likely to generate further changes in practice and ultimately legislation. Copyright © 2009 John Wiley & Sons, Ltd.     

Stock and Bond Liquidity and its Effect on Prices and Financial Policies

An asset is liquid if it can be traded at the prevailing market price quickly and at low cost. We show that in addition to risk, liquidity affects asset prices and returns. Theories of asset pricing suggest that the expected return of an asset is increasing in its risk, because risk-averse investors require compensation for bearing more risk. Because investors are also averse to the costs of illiquidity and want to be compensated for bearing them, asset returns are increasing in illiquidity. Thus, asset prices should depend on two asset characteristics: risk and liquidity. This paper surveys research on the effects of liquidity on asset prices and returns, showing that liquidity is an important factor in capital asset pricing.     

Information Diversity and Complementarities in Trading and Information Acquisition

We analyze a model in which different traders are informed of different fundamentals that affect the security value. We identify a source for strategic complementarities in trading and information acquisition: aggressive trading on information about one fundamental reduces uncertainty in trading on information about the other fundamental, encouraging more trading and information acquisition on that fundamental. This tends to amplify the effect of exogenous changes in the underlying information environment. Due to complementarities, greater diversity of information in the economy improves price informativeness. We discuss the relation between our model and recent financial phenomena and derive testable empirical implications.     

Multimarket Trading and Liquidity: Theory and Evidence

We develop a new model of multimarket trading to explain the differences in the foreign share of trading volume of internationally cross‐listed stocks. The model predicts that the trading volume of a cross‐listed stock is proportionally higher on the exchange in which the cross‐listed asset returns have greater correlation with returns of other assets traded on that market. We find robust empirical support for this prediction using stock return and volume data on 251 non‐U.S. stocks cross‐listed on major U.S. exchanges.     

Information Transparency and Coordination Failure: Theory and Experiment

We examine the effect of higher order beliefs on the ability of decentralized decision makers to coordinate and take advantage of improvements in information transparency that can increase welfare. Theories that address this question have not been empirically explored. We study coordination in a laboratory experiment with privately informed decision makers. Economic outcomes in the setting depend both on agents' rational beliefs regarding economic fundamentals and on their rational beliefs regarding the beliefs of other agents. Increasing information transparency mitigates uncertainty about economic fundamentals but may increase strategic uncertainty, precipitating multiple equilibria and less efficient group outcomes. We provide evidence that sometimes the equilibrium attained by creditors is inferior from a welfare perspective to other available equilibria. Risk dominance appears to determine equilibrium selection in our setting.     

Corporate taxation and the quality of research and development

This paper examines the impact of tax incentives on corporate research and development (R&D) activity. R&D tax incentives are commonly provided as special tax allowances or tax credits. In recent years, several countries also reduced their income tax rates on R&D output with the purpose to foster R&D activity. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We in turn assess the impact of corporate tax incentives on the quality of R&D projects, i.e., their innovativeness and earnings potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income raises the average profitability and innovation level of the projects undertaken in a country. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. Generous R&D tax credits and tax allowances are in contrast found to exert a negative impact on project quality.     

De-materialising and re-materialising: digital technologies and the environment

Drawing on recent literature on the environmental impact of information and communication technologies (ICTs) and the Internet, this paper identifies three main types of effects: direct impacts of the production and use of ICTs on the environment (resource use and pollution related to the production of infrastructure and devices, electricity consumption of hardware, electronic waste disposal); indirect impacts related to the effect of ICTs on production processes, products and distribution systems (de-materialisation, substitution of information goods for material goods, and substitution of communication at a distance for travel); and structural/behavioural impacts, mainly through the stimulation of structural change and growth in the economy by ICTs, and through impacts on life styles and value systems. This paper argues that the diffusion and use of ICTs are leading to both positive and negative environmental impacts. However, because the effects of ICTs on economic activity are pervasive, their impacts on the environment are difficult to trace and measure. The paper argues for a need to move beyond the dichotomy between pessimism and optimism demonstrated in much of the emerging literature. Instead the relationship must be recognised as complex, interdependent, deeply uncertain and scale-dependent.     

'Between Business and Community': A Rural Co-op and Its Accounting Practice

A rural co-op in the north of Sweden has grown from a tiny development-group to a small business venture with houses, a shop and an old-age home. This progress is here described focusing on the accounting practice. Field-studies, including participatory methods and interviews, depict a co-op torn between their founding ideas on shaping a good life in the area, and an increasing focus on business. This tension is also reflected in their usage of accounting. The conclusion of the study is that identity and accounting are shown to be mutually inter-linked. It is further argued, drawing on ethnomethodological concepts, that the main asset in the development, a community based on trust, cannot be mirrored in the formal accounts. The alternative is approaches more akin to narratives.     

Currency volatility and bid-ask spreads of ADRs and local shares

This paper examines the impact of currency volatilities on the average monthly spreads in ADRs and their underlying local shares. We employ a novel estimator for spreads based on two-day-period high and low values of a comprehensive universe of stocks over fifteen years using dynamic panel data estimation. Surprisingly, we find that currency volatility has a larger impact on spreads of ADRs than on their underlying local shares. This adds novel information to the well-documented evidence that local shares and exchange rate variations are the primary drivers of ADR returns. FX implied volatility accounts for about 16.6% of the variance in our sample. We also observe that, on average, ADR spreads are smaller than the spreads on their corresponding underlying shares. We posit that size matters and therefore provide measures of the economic significance of all our estimated results.     

体外循环资金及对区域经济金融的影响--对南通、泰州两市民间融资情况的调查及我行的经营策略

本文以江苏省南通、泰州两市体外循环资金运行个案为调研对象,分析了近年来体外资金迅速发展的原因及对区域经济金融的影响,形成了规范体外循环资金及调整工商银行经营策略的政策措施。从宏观层面看,人民银行及金融监管机构应研究解决体外循环资金的合法地位、流通平台和发展环境等重点问题;从微观层面看,工商银行应主动从经营理念、经营体制、经营模式和经营方式上进行调整,有效化解体外循环资金给全行业务经营形成的冲击。作者提出的民间融资也是生产力和体外循环资金与正规金融机构业务经营互补共赢、和谐发展的理念,对实践具有现实指导意义。     

Bank Competition and Collateral: Theory and Evidence

We investigate the impact of bank competition on the use of collateral in loan contracts. We analyze asymmetric information about the borrowers’ type in a Salop model in which banks choose between screening the borrower and asking for collateral. We show that the presence of collateral is more likely when bank competition is low. We then test this prediction empirically on a sample of bank loans from 70 countries. We perform logit regressions of the presence of collateral on bank competition, measured by the Lerner index. Our empirical tests corroborate the theoretical predictions that bank competition reduces the presence of collateral. These findings survive several robustness checks.     

劳动力成本与中小企业融资约束

本文利用世界银行提供的中国企业调查数据,基于信贷配给理论,考察劳动力成本对企业融资约束的影响。分别以劳动力成本占企业总成本的比重和劳动力成本相对于企业销售额的比值作为劳动力成本代理指标,通过考察企业是否需要银行贷款的自主决策与贷款可得性两方面信息,甄别企业受到的不同类型的信贷配给,进而系统考察劳动力成本对企业信贷约束的影响。研究发现:第一,劳动力成本显著地提高了企业受到信贷配给约束的概率,信贷对劳动力成本较高的企业具有明显的“筛选效应”;第二,劳动力成本对企业受到银行信贷配给和自我信贷配给约束的概率均有显著的正向影响,说明劳动力成本较高的企业不仅会受到更高的来自银行的信贷约束,还会受到来自自身的信贷约束,形成双重“筛选效应”;第三,机制分析表明,较高的金融发展程度和市场化水平通过减轻信息不对称问题,能够显著缓解“筛选效应”的不利影响。本研究为深化金融供给侧结构性改革、破解企业融资难题提供了新的政策启示。     

Optimal Asset Abandonment and Replacement: Tax and Inflation Considerations

The tax and inflation effects on the abandonment and replacement policies are examined for capital assets. The tax effect is shown to defer abandonment for some classes of assets while the asset duration is shortened for others depending on the characteristic of the marginal rates of return of extending asset life. Moreover, inflation may increase or decrease the asset duration depending on the rates of inflation growth of asset nominal cash flows and abandonment value and depending on the relative benefit of asset abandonment. In addition, the Fisher hypothesis of constant real returns relative to anticipated inflation is also examined in the case of asset abandonment and replacement. The results derived for a single cycle of replacement carry over to the replacement policy in an infinite cycle of replacement.     

Bank globalization and efficiency: Host- and home-country effects

Analyzing 126 countries for 1995–2013, we investigate the link between bank globalization and efficiency from the perspective of both host and home countries. We find strong and consistent evidence that foreign bank entry is associated with lower efficiency in host countries (host-country effect), while foreign expansion in the banking sector improves the efficiency of banks at home (home-country effect). We further observe that the effect of bank globalization is dependent on the regulatory and institutional regimes of the respective host (home) countries. Specifically, stringent activity restrictions, tight supervision, fewer limitations on foreign banks, lower market entry barriers, and less government interference all help mitigate the efficiency loss from foreign bank entry. Less supervision power, multiple supervisors, more restrictions on foreign banks, and a competitive banking market are all conducive to the higher efficiency gain of incumbent domestic banks from the respective country’s outward investments in the banking sector. Moreover, we find that the adverse impact on efficiency from foreign bank presence is less pronounced for less risky, more profitable, and larger banks, while banks that are more efficient, more profitable, taking on more risk, and/or smaller gain more efficiency from their country’s foreign expansion.     

股权质押与公司估值:理论与实证

本文基于2000—2020年我国A股上市公司数据,探讨了控股股东股权质押对上市公司代理问题及其估值的非线性影响。研究发现,控股股东股权质押比例较低(高)时将会缓解(加剧)上市公司的代理问题,从而使其估值上升(下降)。进一步分析显示,随着控股股东股权质押比例的提高,上市公司的财务约束和财务困境水平先降后升,呈U形变化;与此同时,控股股东高股权质押比例降低了上市公司增量现金的边际价值,增加了其审计费用和违规频次。从企业异质性来看,国企子样本中上述关系大多不显著。本文研究对进一步理解股权质押的内在运行机制和经济后果有一定参考意义。     

"一带一路"倡议实施与企业金融化决策

依据2009-2018年沪深两市A股上市非金融企业数据,基于2014年"一带一路"倡议实施这一准自然实验,考量"一带一路"倡议实施对企业金融化水平的影响.结果显示:"一带一路"倡议的实施可以显著抑制企业的金融化水平;"一带一路"倡议实施对企业金融化水平的抑制效应仅在非国有企业、内部控制质量高、东部地区以及重点扶持行业的公司中存在;缓解融资约束是"一带一路"倡议实施抑制企业金融化水平的一个重要渠道.     

Courts,Sentencing and Justice in a Changing Political and Managerial Context

This article examines the main developments over the past quarter of a century concerning courts and the sentencing of offenders. It does so in terms of an analysis of shifting political and managerial perspectives in criminal justice and tracks the twin changes, on the one hand, from post-war consensus on sentencing to the more populist stance of politicians towards the end of the 20th century and, on the other, towards a more managerialist approach in reorganizing and running the courts. A key issue identified here is the steady encroachment by an increasingly influential executive on judicial independence and the article concludes by considering prospects for the future in this regard.     

Courts, Sentencing and Justice in a Changing Political and Managerial Context

This article examines the main developments over the past quarter of a century concerning courts and the sentencing of offenders. It does so in terms of an analysis of shifting political and managerial perspectives in criminal justice and tracks the twin changes, on the one hand, from post-war consensus on sentencing to the more populist stance of politicians towards the end of the 20th century and, on the other, towards a more managerialist approach in reorganizing and running the courts. A key issue identified here is the steady encroachment by an increasingly influential executive on judicial independence and the article concludes by considering prospects for the future in this regard.     

Structure,formality and the importance of financial and non-financial information in strategy development and implementation

The strategic management literature indicates that there is high variety in the form and nature of strategic processes within organizations. By contrast, writers on strategic accounting tend focus on the structure and formality of strategic activities and call for a balance of financial and non-financial information to support strategic processes. This study explores the conceptual basis for this perspective and also investigates empirically whether such characterisations hold in practice. The empirical part of the study draws on questionnaire responses by senior corporate accountants and interviews held with a subset of respondents from this group. The results indicate that strategy development and implementation activities tend to be structured and formal, and while greater emphasis is placed on financial information in strategy implementation, in strategy development both financial and non-financial information are used. Differences however prevail across firms as to what is considered to be strategic and the role played by financial and non-financial information varies across companies. A high degree of organization specificity also exists in the uses of strategic accounting information. The study found support for normative ideals within the firms investigated but high organizational particularity also pervades the deployment of strategic accounting information.     

Financial Contracting and Leverage Induced Over- and Under-Investment Incentives

This paper investigates the effects of seniority rules and restrictive dividend convenants on the over- and under-investment incentives associated with risky debt. We show that increasing seniority of new debt decreases the incidence of under-investment but increases over-investment, and vice versa. Under symmetric information, the optimal seniority rule is to give new debtholders first claim on a new project without recourse to existing assets (i.e., project financing). Under asymmetric information, the optimal debt contract requires equating the expected return to new debtholders in the default state to the new project's cash flow in the same rate. If this is not possible, the optimal seniority rule calls for strict subordination of new debt if the expected cash flow in default is small and full seniority if it is large. With regard to dividend convenants, we show that their effect depends on whether or not dividend payments are conditioned on future investments. When they are unconditioned, allowing more dividends increases the under-investment incentive. In contrast, conditional dividends decrease the underinvestment incentive and increase the over-investment incentive.