The Impact of Institutional Differences on Derivatives Usage: a Comparative Study of US and Dutch Firms

This paper examines the influence of institutional differences on corporate risk management practices in the USA and the Netherlands. We compare results to surveys in each country using a strategy that corrects for differences over industry and size classes across the Dutch and US samples. We document several differences in the firms’ uses and attitudes towards derivatives and attempt to attribute them to the differences in the institutional environments between the USA and the Netherlands. We find that institutional differences appear to have an important impact on risk management practices and derivatives use across US and Dutch firms.     

Bank Monitoring and Environmental Risk

Abstract:  Loan announcement effects for 152 Canadian companies are examined to investigate the efficiency of monitoring by banks facing lender environmental liability. Market reaction to the announcement of bank debt to 'environmental' firms is more positive and significant than for 'non-environmental' firms and, for firms in industries with a higher likelihood of experiencing spill events, is more positive and significant, reinforcing earlier results that establish a relationship between specific loan/borrower characteristics and announcement period excess returns and providing further evidence on the 'uniqueness' of bank loans by demonstrating the superior ability of banks to monitor corporate borrowers exposed to environmental liability.     

The behavioral perspective model of purchase and consumption: From consumer theory to marketing practice

The Behavioral Perspective Model of purchase and consumption (BPM) portrays the rate at which consumer behaviors take place as a function of the relative openness of the setting in which they occur and the informational and hedonic reinforcement available in or promised by the setting. Each of eight combinations of contingencies based on these explanatory variables is uniquely related to a specific mode of observed consumer behavior. By providing an environmental perspective on consumer behavior, the model makes a critical contribution to the development of contemporary consumer research that frequently decontextualizes its subject matter. It also presents an innovative conceptualization of the nature of marketing strategies.     

Poverty in America 1970–1990: who did gain ground? An application of stochastic dominance criteria employing simultaneous inequality tests in a partial panel

Atkinson ( 1987 ) proposed stochastic dominance criteria for analysing poverty which, under certain conditions, establish orderings of states for any poverty line and any poverty measure within given class, refocusing debate on the nature of the income distribution of the poor. Employing new empirical techniques, these criteria are implemented for the United States from 1970 to 1990 using the Panel Study of Income Dynamics. Results highlight the pivotal role of family size scale economies in consumption, indicate different experiences for white versus non‐white groups and suggest that optimism over the progress of the poor is not warranted. Copyright © 2003 John Wiley & Sons, Ltd.     

中国负债知多少？

【美国《华尔街日报》7月23日】中国的隐性债务可能成为一大麻烦。     

Are Securitizations in Substance Sales or Secured Borrowings? Capital‐Market Evidence*

Two standard‐setting approaches have emerged globally to guide the choice of accounting for securitizations: the control and components approach (SFAS No. 125 and SFAS No. 140) and the risks and rewards transfer approach (IAS No. 39). A lack of consensus about derecognition accounting is a major impediment to achieving convergence in global standards that must be resolved. Thus, both SFAS No. 140 and IAS No. 39 will be reexamined, and evidence pertinent to the debate is timely and important. In this study, we present evidence consistent with the view of credit‐rating analysts, who view many securitizations as, in substance, secured borrowings. Specifically, for a sample of originators applying sale accounting guidance in SFAS No. 125 / 140 during the period 1997‐2003, we show that off‐balance‐sheet debt related to securitizations has, on average, the same risk‐relevance for explaining market measures of risk (that is, CAPM beta) as on‐balance‐sheet debt. We also find that, in a returns and earnings association framework, the pricing multiple on securitization gains declines as the amount of off‐balance‐sheet debt increases, implying that investors take off‐balance‐sheet debt into account when assessing the valuation‐relevance of such gains. For those who advocate the control and components approach to securitization accounting, our results suggest that, at least for frequent securitizers, the put option arising from implicit recourse is a “missing piece” that is not currently accounted for when calculating securitization gains. Our results challenge the extant measurement standards in SFAS No. 140.     

Bank mergers and components of risk: An evaluation

The present study empirically examines the contribution of the acquired banks in only the nonconglomerate types of mergers (i.e., banks with banks), where the bulk of the payment is in the form of equity to the acquiring bank and finds overwhelmingly statistically significant evidence that nonconglomerate types of mergers definitely reduce the total as well as the unsystematic risk while having no statistically significant effect on systematic risk. Therefore, it seems that diversification may be a possible motive for bank mergers.