Taxes and the Theory of Trade Debt

In this paper, we show that taxes motivate the flow of trade credit without involving the assumption of credit market imperfections. The direction of trade credit flow depends on the distribution of marginal tax rates among buyers and sellers. In equilibrium, the trade credit decision follows a tax-induced clientele on both the supply and demand side.     

The Wealth Effects of Bank Financing Announcements in Highly Leveraged Transactions

We analyze the effect of financing announcements of highly leveraged transactions (HLTs) on the stock prices of the banks that lead HLT-lending syndicates. For our sample of 41 HLTs, we document that the first HLT and bank financing announcements result in positive wealth effects for the lending banks. We also find that these wealth effects are lower in 1985, for smaller HLTs, and for banks with a high loan loss reserve to total asset ratio. Finally, we report that Leveraged Buyout (LBO) targets gain about 2 percent, whereas leveraged recap targets lose about 2 percent, when the first bank financing agreement is announced.     

The Relevance of Varieties of Accounting Information: A U.S.A. Survey

Diverse kinds of financial information have been claimed to be relevant, for one purpose or another. A survey by mailed questionnaire over seven professional groups in five large U.S. cities sought to discover whether certain valuation rules yielded serviceable amounts in specific problem settings or in representations of financial position and income. Most of the questions were posed in the form of simple problem situations. To questions relating to wealth, spending power and financial position, large majority responses rejected conventional accounting values and endorsed market selling prices. To questions on income calculation, majorities favouring use of the same principle were smaller. Cross-tabulations of answers on financial position and income showed substantial inconsistencies; a hypothetical explanation is given. A comparison is given of responses to some questions in similar surveys in Australia and South Africa.     

A COMPARATIVE ANALYSIS OF ELDERLY PERCEPTIONS OF THE CONSUMER MOVEMENT*

The decade of the 1970s witnessed the passage of an unparallelled amount of legislation designed to protect the needs of disadvantaged and low income consumers, characteristics which describe many members of the elderly population segment. This research was designed to assess elderly perceptions of the market-place today and of the performance of businesses and government agencies in protecting and promoting their interest as buyers. The elderly, when compared to other population segments, showed a more negative attitude toward the accomplishments of the consumer movement and the role of businesses and government in protecting buyers than other population segments.     

Monetary Expansion in an Open Economy of Intermediate Size*

This paper introduces a monetary asset, perceived as an addition to wealth, into a two-country neoclassical model of accumulation. As domestic monetary expansion changes, demand for the investment good is shifted. This alters the terms and level of trade as well as production and shifts the balanced growth paths of both economies. For a non-specialized world it is found that an increase in domestic monetary expansion will increase the domestic overall capital intensity, decrease the foreign overall capital intensity, and worsen the terms of trade for the country importing the investment good.     

PRICES IN LARGE AND SMALL COOPERATIVES

To test whether small cooperatives can offset economies of scale through volunteer labour inputs, prices charged at five small coops using volunteers and five large coop branches with paid staff were compared with prices at nearby commercial supermarkets. There were more low prices at the smaller coops than at the larger coops and coop shoppers received best values on whole and unprocessed foods and the least price benefits for processed and convenience foods. In interpreting these results, the lesser amount of convenience, the limited product selection, and the work requirement at the smaller cooperatives must be considered.