Market maker competition and price efficiency: Evidence from China

We test the relationship between market maker competition and stock price efficiency. Using the number of market makers as a proxy for competition, the results show a strong positive correlation between competition and stock price efficiency. Moreover, price efficiency is higher when competing market makers have higher research ability. We suggest that market maker competition increases price efficiency through two channels: 1) Competition decreases transaction costs, and 2) Uninformed market makers learn from orders submitted by informed market makers through competition. The latter happens only in the group of market makers with higher experiences. The results imply that the price efficiency can be improved by enhancing the competition of market makers with high research ability and experiences.     

THE CASE FOR A COMMUNITY TRANSACTION ENGINE: GETTING COASE FOR THE TWENTY‐FIRST CENTURY

New types of marketplace are now becoming viable. They can slash transaction costs, bring new resources into the economy and expand economic opportunity. These markets can be grown by the private sector. But, to deliver their full potential, they need a change in the mindset of government.     

物质生态批评视角下《瓦尔登湖》再解读

亨利·戴维·梭罗是美国最伟大的自然散文作家和环境主义先驱。《瓦尔登湖》是梭罗所著的一本著名的散文集。在该作品中，非人类自然的施事能力和叙事能力得到了充分体现。梭罗在肯定非人类自然与人类具有平等地位的同时，看到了其施事能力带来的影响，读懂了其叙事语言，从而向我们展示了非人类自然通过何种途径显示自身在大自然中不可替代的地位。     

Lumpy Investment and Corporate Tax Policy

In the presence of both convex and nonconvex capital adjustment costs in a dynamic general equilibrium model, corporate tax policy generates both intensive and extensive margin effects via the channel of marginal Q. Its impact is determined largely by the strength of the extensive margin effect, which, in turn, depends on the cross‐sectional distribution of firms. Depending on the initial distribution of firms, the economy displays asymmetric responses to tax changes. Moreover, an anticipated increase in the future investment tax credit reduces investment and adjustment rate initially.     

BS in the boardroom: Benevolent sexism and board chair orientations

Research Summary: Though research has focused on the ascent and acceptance of female CEOs, the post‐promotion circumstances female CEOs face remain unclear. In this study, we focus on a critical post‐promotion circumstance: the board chair–CEO relationship. Drawing on the gender stereotype literature, agency theory, and stewardship theory, we posit that firms appointing a female CEO are more likely to adopt a collaboration board chair orientation and less likely to adopt a control orientation. We further predict this effect is attenuated by female board representation. Using a sample of new S&P 1500 CEOs, we find support for our predictions regarding the collaboration orientation but not the control orientation. This research provides some evidence of benevolent sexism in the boardroom, with female directors acting as a countervailing influence. Managerial Summary: Whereas the notion that females encounter a glass ceiling on their path toward CEO is well documented, the conditions female CEOs encounter after promotion are less understood. The relationship between the board chair and the CEO is one important post‐promotion condition. Board chairs can focus on monitoring and/or working together with the CEO. We suggest board chairs are more likely to work in close collaboration with female CEOs than with male CEOs. We attribute this to benevolent sexism, which explains that board chairs are more likely to collaborate with female CEOs because they view females as more conducive to, and in need of, this type of relationship. We also suggest this benevolent sexism is less prevalent when there are more females on the board.     

Real options and contingent convertibles with regime switching

We consider a firm with no assets in place but an option to invest in a project. The investment is irreversible but delayable in a regime-switching economy. The firm issues equity, straight bonds (SBs) and contingent convertibles (CoCos). We provide the closed-form prices for the firm׳s securities and the pricing and timing of the option. Our numerical analyses discover that issuing CoCos instead of SBs induces much less agency cost of debt. The agency cost is higher in a boom economy than in recession but the difference is small. There is a unique CoCos׳ conversion ratio such that the agency cost arrives at the minimum value zero. The inefficiencies arising from asset substitution and debt overhang are much more significant in recession than in boom. Only if the conversion ratio is not too small, the two inefficiencies disappear during boom periods. While the effects of the conversion rate on optimal capital structure and firm value and those of supervision and jump intensity on optimal CoCos׳ coupon are ambiguous and weak, the stricter the supervision or the longer the economy remains in recession, the less the option value and the optimal SBs׳ coupon.     

Understanding the formation of e-loyalty based on a dedication-constraint perspective

Despite the importance of retaining customers in the context of e-shopping, the formation of an e-buyer’s loyalty remains inconclusive. Drawing on e-shopping literature, this study developed and tested a model to explain e-buyer loyalty from the perspective of business-to-consumer relationship management. We build on a dedication-constraint dual model to delineate the relationship between perceived benefits, switching cost, service-specific investment, and loyalty. Empirical results from 505 respondents show that loyalty is influenced by both perceived benefits and switching costs. In addition, switching costs partially mediate the relationship between service-specific investments and loyalty. Implications of these results are discussed.     

The importance of firing costs and the Hosios condition in search models with endogenous job destruction

We construct a DSGE search model with endogenous job destruction, incorporating wage rigidities, firing costs and unemployment benefit. We investigate the most important factors in matching the model’s cyclical properties with empirical data, particularly those of job creation rates (JCR) and job destruction rates (JDR). Firing costs assist significantly in explaining the procyclicality of JCR, the negative correlation of JCR and JDR, and the persistence of vacancies. They also decrease the counter-cyclicality of job turnover. We also postulate that the Hosios condition helps explain the negative correlation of JCR and JDR and vacancies’ persistence. Varying wage rigidities and unemployment income, however, do not improve the results.     

The HRM–capital market link: Effects of securities analysts on strategic human capital

This article develops theory about an agency problem affecting the strategic human capital (SHC) of the firm. It proposes three categories of SHC‐related choices managers must make that imply a trade‐off between near‐ and long‐term performance. Dispersed shareholding, firm coverage by securities analysts, and their practice of publishing quarterly earnings forecasts are argued to entail a bias in management incentives, shifting the balance in this trade‐off toward near‐term performance. To restore the balance, securities analysts would need to distinguish transitory from recurring effects of SHC‐related choices in their valuation models (e.g., treating certain labor cost savings during cyclical downturns as transitory). Restoring the balance would also require them to anticipate long‐term effects in their long‐term earnings forecasts (e.g., long‐term positive effects of retaining employees with valuable skills during cyclical downturns). The article discusses specific transitory cost effects and long‐term effects they could potentially take into account. The skills and incentives needed by analysts to account for such effects are argued to vary across firm segments.