Hedging,Financing and Investment Decisions: A Simultaneous Equations Framework

We empirically investigate the interactions among hedging, financing, and investment decisions. We argue that the way in which hedging affects a firm's financing and investing decisions differs for firms with different growth opportunities. We find that high growth firms increase their investment, but not leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage.     

How Does Size Affect Mutual Fund Behavior?

If actively managed mutual funds suffer from diminishing returns to scale, funds should alter investment behavior as assets under management increase. Although asset growth has little effect on the behavior of the typical fund, we find that large funds and small‐cap funds diversify their portfolios in response to growth. Greater diversification, especially for small‐cap funds, is associated with better performance. Fund family growth is related to the introduction of new funds that hold different stocks from their existing siblings. Funds with many siblings diversify less rapidly as they grow, suggesting that the fund family may influence a fund's portfolio strategy.     

Institutional Investors' Preferences for REIT Stocks

This article investigates the determinants of real estate investment trusts (REIT) portfolio investment and institutional REIT ownership using multivariate Tobit regressions. We contend that many institutional investors take larger positions in more liquid assets like REIT stocks, as compared with private real estate equities, because of liquidity considerations. Consistent with this contention, we find that liquidity constraints are significantly related to REIT portfolio investment by institutional investors. We also find that institutional investors have different preferences for REIT stocks than do other investors; they generally prefer larger, more liquid REIT stocks.     

Understanding the Economic Factors Influencing Farm Policy Preferences

A survey conducted in Mississippi, Texas, Indiana, and Nebraska elicited producers' preferences for various farm policy changes. This permitted examination of the diversity of preferences that single-state studies have not allowed. Five policy choices, including deficiency payments, loan programs, crop insurance, export programs, and disaster payments were examined. Logit model results predicting producer preferences for each of the five dichotomous policy choices are reported. Explanatory variables based on expected utility theory such as risk aversion, price and yield variability, and price–yield correlation are significant in various models.     

Benefits and barriers of telework: perception differences of human resources managers according to company's operations strategy

Telework as an integration of Information and Telecommunication Technologies with Human Resources management, means a new job organisation paradigm for companies working in the New Economy. However there are very few empirical studies that have analysed the perception differences of telework benefits and barriers in industrial and service companies. This paper contributes with empirical data to the relationship between the use of telework techniques and the implementation of this new work organisation with the company's operations strategy. The paper uses data from Spanish companies to test the relationship between innovation, employee training, and other production strategy performance parameters with the feasibility of telework adoption.     

Separating microstructure noise from volatility

There are two variance components embedded in the returns constructed using high frequency asset prices: the time-varying variance of the unobservable efficient returns that would prevail in a frictionless economy and the variance of the equally unobservable microstructure noise. Using sample moments of high frequency return data recorded at different frequencies, we provide a simple and robust technique to identify both variance components.     

Love or Money? The Effects of Owner Motivation in the California Wine Industry

Models that assume only consumer tastes determine the characteristics of supply are restrictive; producers can gain utility from aspects of production and pay for deviating from demand by accepting lower financial returns. We model and measure motivations of California winery owners, and analyze their effects on quality and price. We find utility–maximizers are more likely to produce high quality and set higher quality–adjusted prices. Profit–oriented owners are less likely to produce high quality wines. These results suggest that the presence of hobbyists who enjoy producing high quality may lower financial returns in the segment and discourage profit–maximizers from locating there.