The Differential Impact of IFRS Adoption on Aspects of Seasoned Equity Offerings in the UK and France

We examine the potential for IFRS to influence the market for SEOs in the UK and France. The divergence between the UK domestic accounting standards and IFRS is minor (low-divergence firms) whereas domestic accounting standards in France differ materially from IFRS (high-divergence firms); however, both countries have similar legal enforcement and institutional settings that might confound the effect of IFRS adoption. We argue that IFRS adoption serves to mitigate information asymmetry and improve accounting quality. Accordingly, we find that, following IFRS adoption, earnings management activities decrease among high-divergence firms prior to issuing SEOs. As a result of the lower levels of earnings management and information asymmetry, we predict and find that the market reaction to issuing SEOs improves significantly for high-divergence firms following IFRS. Given that equity financing becomes less costly, we find that the propensity to issue new SEOs increases among high-divergence firms after IFRS adoption. We find no similar changes among low-divergence firms. The results persist after running a matched-sample analysis and controlling for potential self-selection bias.     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

Lock‐In Effects in Relationship Lending: Evidence from DIP Loans

Do prior lending relationships result in pass‐through savings (lower interest rates) for borrowers, or do they lock in higher costs for borrowers? Theoretical models suggest that when borrowers experience greater information asymmetry, higher switching costs, and limited access to capital markets, they become locked into higher costs from their existing lenders. Firms in Chapter 11 seeking debtor‐in‐possession (DIP) financing often fit this profile. We investigate the presence of lock‐in effects using a sample of 348 DIP loans. We account for endogeneity using the instrument variable (IV) approach and the Heckman selection model and find consistent evidence that prior lending relationship is associated with higher interest costs and the effect is more severe for stronger existing relationships. Our study provides direct evidence that prior lending relationships do create a lock‐in effect under certain circumstances, such as DIP financing.     

Firm financing and growth in the Arab region

This paper documents how firms in Arab countries use equity, corporate bond and syndicated loan markets to obtain financing and grow. Working with a new dataset on issuance activity in domestic and international markets and firm performance, the paper finds that capital raising through these markets has grown rapidly since the early 1990s and involved an increasing number of firms. Whereas the amounts raised in equity and loan markets (relative to gross domestic product) stand well relative to international standards, bond issuance activity lags behind. However, bond financing has gained importance over time. Equity issuances take place primarily in domestic markets, whereas bonds and loans are mostly issued internationally, display long maturities and entail low levels of credit risk. Issuing firms from the Arab region are very large compared to international standards. They also tend to be larger, faster growing and more leveraged than non-issuing firms in Arab countries.     

How government regulation of interbank financing impacts risk for Chinese commercial banks

The rapid development of interbank financing in China has exposed financial institutions to increasing risk. In 2013, the China Banking Regulatory Commission implemented regulation on interbank financing for commercial banks. We assess the effectiveness of this regulation in reducing (i) the risk of commercial banks relative to non-bank financial institutions, where the latter are not subject to the regulation, and (ii) the risk of major commercial banks, which are more disposed to engage in interbank finance, relative to minor commercial banks. Our data are for the period 2006–2016 for 30 commercial banks (13 major, 17 minor) and 56 non-bank financial institutions. To control for other factors, we make use of a difference-in-difference estimation approach. Our measure of risk is the z-score, for which a higher value means a lower risk of bankruptcy. We find in support of the effectiveness of the regulation with z-scores for commercial banks rising relative to those of non-bank financial institutions and z-scores of major banks rising relative to those of minor banks following implementation of the regulation.     

机关运行经费基金化管理的战略构想

政府机关事务的高绩效管理是维护政府高效有序运行的关键,更是实现政府职能、促进社会经济发展、维护社会稳定和提升政府公信力的重要保障。许多先发国家如美国、英国等对机关运行实行了价值化管理改革,以基金作为撬动政府机关运行资金的杠杆,达到了机关服务高效优质、规范有序、监督有效和战略明确的目标。中国机关事务运行正处于由传统的事务性实物管理向现代化的价值治理转变的关键期,借鉴英美等国的基金管理和运行经验对于中国建立机关运行普遍服务基金制度,提高政府效能,实现国家治理体系和治理能力现代化具有重要意义。     

BOT项目前期的政府监督问题及对策研究

政府监管是政府或政府指定的特设机构依据法律或法定授权对市场经济主体采取的一系列行政管理与监督的行为。BOT项目前期是由政府占据主导地位的，因此该阶段的政府监管更多的是对自身行为的监督。目前，该阶段存在立项规划欠缺前瞻性、招投标相关法律法规不健全、招投标存在不公平现象以及特许经营协议不完善的问题。必须充分考虑经济发展和城市规划的因素、完善BOT项目相关法律法规、规范招投标程序运作、强化政府监督的内部约束机制，以保障项目下一阶段的顺利进行。     

The funding of subsidiaries equity,double leverage and the risk of bank holding companies

Banking groups exploit double leverage when ‘debt is issued by the parent company and the proceeds are invested in subsidiaries as equity’. Financial authorities have frequently raised concerns about the issue of double leverage because this type of intra‐firm financing appears to allow for both the arbitrage of capital and the assumption of risk. This article focuses on the relationship between double leverage and risk‐taking within banking groups. First, we discuss this relationship based on an examination of balance sheet figures. Second, we analyze a large sample of United States Bank Holding Companies (BHCs) from 1990–2014. The results show that BHCs are more prone to risk when they increase their double leverage, namely, when the stake of the parent within subsidiaries is larger than the stand‐alone capital of the parent. This paper's primary implication for policymakers is that the regulators of complex financial entities should more efficiently address the issue of double leverage, thereby limiting the potential negative consequences that arise from corporate instability.     

Lobbying as a potent political marketing tool for firm performance: A closer look

This study endeavors to enhance political marketing literature about the impact of lobbying on firm performance. Our sample is composed of 140 U.S. firms and spans the years 2007–2014 to encompass the 2007–2009 recession and the subsequent recovery period. Our findings indicate that lobbying expenses positively contribute to firm performance. Also, government contracts in both ways, dollar amount and number of government contracts, act as mediators between lobbying expenses and firm performance. In addition, organizational slack moderates the relationship between lobbying expenses and government contracts. The managerial implications suggest that lobbying expenses can be leveraged as a potent tool for firm performance. Firms with larger lobbying efforts acquired both, higher dollar amounts and a greater number of government contracts.     

Is China Living a Minsky Moment? Between the “Lender of Last Resort” and the Chinese Shadow Financial System

After Lehman Brothers bankruptcy in 2008, the Central Bank of China (PBOC) created a big 1.8 trillion dollars package to boost the Chinese economy. It was a necessary key measure not only to prop up the economy, but also to try to preserve the two-digit growth of the GDP that existed before the Great Recession. The financial instability of international financial circuits made necessary the involvement of the central bank. Ten years later, China’s debt explosion went up during the financial crisis, from six to twenty-eight trillion dollars between 2007 and 2016. In other words, it went up from 148 to 260 percent of GDP during the same period. The goal of this article is to analyze whether China is living a “Minsky moment” or not, and what its implications are for international financial markets.