THE COSTS AND BENEFITS OF SOIL CONSERVATION: THE FARMERS' VIEWPOINT

Most countries in Central America and the Caribbean depend heavilyon agriculture; efforts to sustain and improve the sector'sproductivity are therefore crucial to the region's economicdevelopment and to the welfare of its people. Land degradationis thought to pose a severe threat to the sustainability ofagricultural production. Yet despite long-standing concern aboutthis threat and dramatic claims of environmental damage, surprisinglylittle empirical analysis has been done on the causes and severityof land degradation problems in the region and on how best totackle them. Meanwhile, many of the conservation programs designedto address the problems have fallen short of expectations. Oftenfarmers have not adopted the recommended conservation practicesor have abandoned them once the project ended. The research presented in this article attempts to bridge theempirical gap, using cost-benefit analysis to investigate thenature and severity of the soil degradation problem and to assessthe cost-effectiveness of proposed solutions. Because soil degradationproblems tend to be site-specific, the analysis is rooted incase studies, and because conservation programs stand or fallon the participation of farmers, the study's main focus is onthe profitability of the measures and the deterrents to theiradoption from the farmers' point of view.      

THE COSTS AND BENEFITS OF BEING A SMALL, REMOTE, ISLAND, LANDLOCKED, OR MINISTATE ECONOMY

Any index of smallness is somewhat arbitrary, but common practicehas been to use population and income criteria. Experience suggeststhat smallness is neither a necessary nor sufficient conditionfor poor development performance. This paper considers the problemsthat small economies are most often alleged to face, includingabsence of economies of scale, vulnerability, remoteness, reducedaccess to capital markets, problems of macroeconomic policydependence, and overstatement of real income. The paper concludesthat many of the alleged problems of small economies are eithernot peculiar to small economies or can be addressed throughsuitable policy measures.      

AN INSTITUTIONAL INNOVATION TO REDUCE THE AGENCY COSTS OF PUBLIC CORPORATE BONDS

This paper proposes an institutional innovation in the structure of public bonds that is intended to provide some of the advantages of private loans- active monitoring, tight covenants, and ease of reorganization-while retaining the benefits of liquidity and ease of diversification provided by publicly traded securities. The authors propose that a publicly registered corporate bond provide for a supertrustee who will act on behalf of bondholders. The supertrustee will be charged with responsibility to monitor the compliance of the borrower with the terms of the bond covenants and given exclusive authority to negotiate amendments to the covenants and decide what action to take in the event of a breach of a covenant.     

THE COSTS OF RAISING CAPITAL

We report the average costs of raising external debt and equity capital for U.S. corporations from 1990 to 1994. For initial public offerings (IPOs) of equity, the direct costs average 11.0 percent of the proceeds. For seasoned equity offerings (SEOs), the direct costs average 7.1 percent. For convertible bonds, the direct costs average 3.8 percent. For straight debt issues, the direct costs average 2.2 percent, although they are strongly related to the credit rating of the issue. All classes of securities exhibit economies of scale, although they are less pronounced for straight debt issues. IPOs also incur a substantial indirect cost due to short-run underpricing. Most large equity offers include an international tranche, although debt issues do not.     

让农民享受均等化金融服务

贵州省是一个农村贫困面大,农民贫困程度深的西部内陆省份,是全国扶贫攻坚的主战场,要在2020年基本消除绝对贫困现象、与全国实现同步奔小康,最关键的是要切实增加农民收入。对于农村信用社而言,支持农民增收,就是要树立以人为本、服务为先的理念,切实围绕广大人民群众的金融服务需求,千方百计把解决广大人民群众的贷款难作为自己的职...     

THE RISK STRUCTURE OF INTEREST RATES AND INTERDEPENDENT BORROWING COSTS: THE IMPACT OF MAJOR DEFAULTS

This paper develops a new methodology for evaluating the impact of economic events on bond yields. Term structure information and implicit forward rates are used to generate expected bond yields, and the difference between actual and expected yields is interpreted as the information effect of the event. The methodology is applied to two studies of municipal default: the New York City default and the more recent Washington Public Power Supply System (WPPSS) default. The analysis provides evidence that the New York City default did have a significant impact on the interest cost of municipal financing in general. In the case of WPPSS, however, there is no indication of a significant default impact.     

ESTIMATING THE TAX BENEFITS OF DEBT

The standard approach to valuing interest tax shields assumes that full tax benefits are realized on every dollar of interest deduction in every scenario. The approach presented in this paper takes account of the possibility that interest tax shields cannot be used in some scenarios, in part because of variations in the firm's profitability. Because of the dynamic nature of the tax code (e.g., tax-loss carrybacks and carryforwards), it is necessary to consider past and future taxable income when estimating today's effective marginal tax rate. The paper uses a series of numerical examples to show that (1) the incremental value of an extra dollar of interest deduction is equal to the marginal tax rate appropriate for that dollar ; and (2) a firm's effective marginal tax rate (and therefore the marginal benefit of incremental interest deductions) can actually decline as the firm takes on additional debt.
Based on marginal benefit functions for thousands of firms from 1980–1999, the author concludes that the tax benefits of debt averaged approximately 10% of firm value during the 1980s, while declining to around 8% in the 1990s. By taking maximum advantage of the interest tax shield, the average firm could have increased its value by approximately 15% over the 1980s and 1990s, suggesting that the consequences of being underlevered are significant. Surprisingly, many of the companies that appear best able to service debt (i.e., those with the lowest apparent costs of debt) use the least amount of debt, on average. Treasurers and CFOs should critically reevaluate their companies' debt policies and consider the benefits of additional leverage, even if taking on more debt causes their credit ratings to slip a notch.     

A TEST OF THE EASTERBROOK HYPOTHESIS REGARDING DIVIDEND PAYMENTS AND AGENCY COSTS

Easterbrook (1984) argues that dividend payments may be an ambiguous signal unless the market can distinguish growing firms from disinvesting firms. Shares of growing firms that announce both financing and dividend increases are predicted to rise more in value than shares of firms announcing a dividend increase alone. We examine the relation between prior financing activity and the market response to initial dividends and find evidence consistent with the Easterbrook agency cost model.     

THE RELATIONSHIP BETWEEN OTC BID-ASK SPREADS AND DEALER SIZE: THE IMPACT OF ORDER-PROCESSING AND DIVERSIFICATION COSTS

The effects of large transactions on OTC security dealers' bid-ask spreads are analyzed for stocks with different price levels. Because overhead expenses vary little with the value of transactions, economies of scale exist for dealers in higher-priced stocks. Thus, percentage bid-ask spreads decline with the price level of the stock. However, larger transactions entail larger order-clearing and inventory-adjustment costs. These costs may be particularly burdensome for smaller dealers with limited purchasing powers and abilities to diversify inexpensively. Consequently, smaller dealers charge higher spreads for trading high-priced stocks.     

USING DIVIDEND POLICY AND MANAGERIAL OWNERSHIP TO REDUCE AGENCY COSTS

In this study we examine dividends and chief executive officer (CEO) stock ownership as interrelated mechanisms that may be used to reduce agency costs. We find a significant nonmonotonic relation between dividend yield and CEO stock ownership. Our evidence shows that until the CEO becomes entrenched, increased executive stock ownership reduces agency costs and decreases dividend yield. Beyond that point, increased stock ownership increases dividend yield. Whether additional stock ownership can reduce agency costs depends upon the CEO's degree of control in the firm.     

A SURVEY OF THE COSTS OF WORLD SUGAR POLICIES

The world sugar market has long been characterized by volatileprices and widespread intervention. Controls on domestic prices,demand, and supply have created an inefficient pattern of worldproduction, consumption, and trade. Without government controls,production would shift from the countries with higher cost,subsidized production (especially the European Community, Japan,and the United States) to the countries with lower costs (suchas Australia, Brazil, and Thailand). The resources saved couldthen be directed to other activities. Sugar policies in countries with high costs reduce world sugarprices quite substantially in the long run and increase pricevariability significantly; production controls in countrieswith low costs increase world prices somewhat and also increasetheir variability. What would happen if all interventions ceased? Average worldsugar prices would probably— but not definitely—rise. World prices would definitely vary less, and economicconditions would definitely improve, especially in developingcountries that depend heavily on sugar exports. But the prospectsfor substantial reform of the sugar market are not promising,even though the GATT Uruguay Round continues. This article putsforward some modest proposals for changing the existing interventionsto lessen economic distortions and reduce costs.