Managerial bonding and stock liquidity: An analysis of dual-class firms

Given the decision to create a second class of stock through a dual-class structure, we propose that management is more (less) likely to create a liquid secondary market for both classes of shares the lower (higher) its willingness to tie its personal wealth to firm performance. If market makers recognize this relation, they should assign a higher likelihood to trades motivated by superior information in shares of firms that list both classes of stock and a lower likelihood for firms that list only one class of stock pursuant to recapitalization. Additionally, they should assign a lower likelihood to trades motivated by superior information in shares of IPOs that choose a dual-class structure and list only one class relative to IPOs that remain single-class. Our empirical tests based on IPOS and recaps between 1985 and 1988 provide support for these propositions.     

Decision parameters in global R&D management

This paper addresses the question of which variables have what kind of impact on the decision to locate new R&D facilities in countries different from the home country of a corporation. In the first section of the paper we demonstrate the complexity of this question by referring to empirical research, managerial statements and literature. We then develop a conceptual model for the location decision of international R&D activities. This is based on Porter's (1990) framework of the factors constituting the competitive advantage of nations. In the final section of this paper we show how such a model helps us to understand and also to explain a number of management issues related to global R&D activities.     

Public Disclosure and Private Decisions: Equity Market Execution Quality and Order Routing

In 2001, the Securities and Exchange Commission (SEC) requiredmarket centers to publish monthly execution-quality reportsin an effort to spur competition for order flow between markets.Using samples of stocks trading on several markets, we investigatewhether past execution quality affects order-routing decisionsand whether the new disclosure requirements influence this relationship.We find that routing decisions are associated with executionquality; markets reporting low execution costs and fast fillssubsequently receive more orders. Moreover, the reports themselvesappear to provide information that was unavailable previously.Our results are consistent with active competition for orderflow that can be influenced by public disclosure. (JEL G24,G28, K22)     

Unexpected Consequences of Ricardian Expectations

The Ricardian equivalence thesis maintains that, given the time‐path of government spending, a change in taxation does not alter the set of feasible lifetime consumption plans of the households and affects neither the demand for commodities and services nor the rate of interest, provided the households act rationally. This note establishes that the very expectations the thesis proposes (‘Ricardian expectations') are invalidated if households act rationally. The divergence from Ricardian equivalence is traced to the omission of interest payments on public debt as part of the households' disposable income. The non‐equivalence is valid in a wide class of models.     

Anmerkungen zur Unternehmensteuerreform

Im Juli dieses Jahres hat das Bundeskabinett Eckpunkte zur Unternehmensteuerreform beschlossen. Inwieweit erh?hen die geplanten Ma?nahmen die Wettbewerbsf?higkeit des Standortes Deutschland? Weshalb sollten Personenunternehmen entlastet werden? Sollten einbehaltene Gewinne begünstigt oder sollte eine Investitionsrücklage gew?hrt werden? Wie kommt die Gegenfinanzierung bei Einnahmeausf?llen im Staatshaushalt zustande? Wie ist die geplante Einbeziehung ertragsunabh?ngiger Komponenten in die Steuerbasis zu beurteilen? Dr. Ekkehart Wilk, 61, ist Unternehmensberater in Bonn/Wachtberg und in der Politikberatung t?tig. Er war Mitarbeiter im Bundesfinanzministerium und Mitglied der Hauptgesch?ftsführung eines Verbandes.     

Local aggregation in a dynamic setting

An earlier version of the paper (Schlicht, 1985 b) was presented at the Econometric Society European Meeting in Budapest (Hungary) 1986. Comments by anonymous referees have been extremely helpful. This paper is dedicated to my wife.     

Student vs. faculty perspectives on quality instruction: Gender bias, “hotness,” and “easiness” in evaluating teaching

This article systematically examines differences between student and faculty perspectives on quality instruction, using local data for a regional university's college of business matched to RateMyProfessors.com evaluations. Particular attention is focused on gender bias, “hotness,” and “easiness.” In addition to documenting a student bias or preference in favor of male faculty, this article also shows how students and faculty have different views of “easiness” and “hotness.” For this college, students value “easiness” while faculty penalize it; however “hotness” has no measurable effect on faculty in this study.     

Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor's Technical Progress Function

This note proposes a growth model that is derived from the standard Solow growth model by replacing the neoclassical production function with Kaldor's technical progress function while maintaining a marginalist theory of factor prices in the spirit suggested by von Weizsäcker. The hybrid model so obtained explains balanced growth in a way that appears less arbitrary than possible explanations in the Solow model, especially because it directly accounts for Harrod neutral technical change, without any need for further assumptions. It complements the current neoclassical and AK models by offering a further perspective for interpreting economic growth.