THE EFFECT OF TRADED OPTION INTRODUCTION ON SHAREHOLDER WEALTH

Several authors suggest that the opening of a market in traded options constitutes a “feasibility-expanding” change. In this paper evidence on changes in the price of underlying stocks at the time of option listing is examined to determine whether option listing constitutes such a change. Evidence supports the hypothesis that call option listing is feasibility expanding, that put option listing is not feasibility expanding, and that call listings closer to the initiation of organized option trading have a larger impact relative to later listings.     

THE SHAREHOLDER WEALTH EFFECTS OF CORPORATE GREENMAIL

In this study, the abnormal return dynamics of firms undertaking premium targeted block share repurchases are examined empirically. The positive returns accruing to nonparticipating shareholders for the period encompassing the buy-in and repurchase announcements are attributable to the expectation of subsequent acquisition activity. Firms that are not acquired realize, on average, a zero abnormal return. The probability of subsequent acquisition is not related to the targeted repurchase. Managers who engage in targeted block share repurchases frequently are expelled from corporate ranks. Firms that are acquired exhibit abnormal returns only similar to those of other merger and tender offer targets.     

THE SHAREHOLDER WEALTH EFFECTS OF CALPERS' FOCUS LIST

Shareholder activism can help to protect shareholder value by promoting sound corporate governance practices. As an active institutional investor, CalPERS takes its role in the corporate governance process very seriously. In addition to many other initiatives, CalPERS publishes each year a list of six to twelve public companies with poor corporate governance principles and poor financial performance—its well-known "Focus List"—in the hope that the managements of these companies will be motivated to improve their performance and increase shareholder value for CalPERS and their other equity owners.
In an attempt to assess the effectiveness of CalPERS' governance program, the authors examine the market impact of the Focus List and find that companies on the list experience positive excess stock returns of about 12% over the three months following release of the list. Moreover, this wealth effect is even greater for companies with a large, widely dispersed shareholder base, as might be expected given the relative inability of such shareholders to act collectively.     

THE ACTIVE BOARD OF DIRECTORS AND ITS EFFECT ON THE PERFORMANCE OF THE LARGE PUBLICLY TRADED CORPORATION

In recent years, boards of directors have become more active and independent of management in pursuing shareholder interests. But, up to this point, there has been little empirical evidence that active boards help companies produce higher rates of return for their shareholders. In this article, after describing the new board activism, the authors argue that past failures to document an association between independent boards and superior corporate performance can be explained by two features of the research: its concentration on periods prior to the 1990s (when most boards were largely irrelevant) and its use of unreliable proxies (such as a minimum percentage of outside directors) for a well-functioning board.
The authors hypothesize that an independent and resourceful board takes steps that require management to increase earnings available to investors. To test this hypothesis, the performance of a sample of large U.S. corporations was examined over the period 1991-1995 using two proxies for the professionalism of each company's board: (1) the letter grades (A+ to F) assigned by CalPERS for corporate governance; and (2) a presence or absence grade based on three key indicators of professional board behavior. Both of these governance metrics were associated in statistically significant ways with superior corporate performance, as measured by earnings in excess of cost of capital and net of the industry average. While acknowledging that such results do not prove causation, the authors conclude that, in the first half of the 1990s, corporations with active and independent boards added significantly more value for shareholders than those with passive, rubber-stamp boards.     

SHAREHOLDER WEALTH EFFECTS OF MANAGEMENT CHANGES

This paper analyzes the direction and magnitude of changes in stock prices resulting from the announcement of various types of changes in senior corporate management over a twelve-year period. We find support for the view that instability resulting from executive succession adversely affects organizational performance. Furthermore, our results imply a clear preference by the market for a change in composition of the previous management team over its further entrenchment and a perception by the market that senior corporate executives and the board of directors may not be solely motivated by considerations of shareholder wealth maximization.     

THE SHAREHOLDER WEALTH EFFECTS OF MONOPOLIES AND MERGERS COMMISSION DECISIONS

This paper presents an analysis of the policy of the UK's Monopolies and Mergers Commission using stock market data. Stock price reactions to regula-tory intervention by the Monopolies and Mergers Commission might be expected to reflect two sorts of factors. Firstly, the impact of the intervention on the possibility of bidders extracting monopoly profits from consumers. Secondly, the possibility that the subsequent investigation of the bid by the Monopolies and Mergers Commission will raise the cost of a bid, which may not necessarily be in the shareholder's interests, and so cause such bids to be abandoned. Studying a sample of some 53 bids, investigated by the Commission in the period 1976–90, little evidence was found that the Commission halts bids that are likely to result in monopoly profits to the bidder but there was some weak evidence that non-shareholder wealth maximising bids are abandoned as a result of the Monopolies and Mergers Commission intervention.     

THE EFFECT OF VOLUNTARY CORPORATE LIQUIDATION ON SHAREHOLDER WEALTH

This paper presents an analysis of the shareholder wealth effect of voluntary corporate liquidation, the extreme form of corporate divestiture classified as a “selloff.” For a sample of 37 firms that liquidated during the 1970–1982 period, the liquidation announcement is associated with statistically and economically significant stock price increases.     

THE IMPACT OF SALE-LEASEBACKS TRANSACTIONS ON BONDHOLDER AND SHAREHOLDER WEALTH

Prior research has shown that a sale and leaseback transaction (SLBT) results in positive average abnormal returns to the lessee's common stockholders. Researchers have conjectured that this could be due to SLBT tax benefits or due to a wealth transfer from bondholders (since after the SLBT it is possible that fewer assets remain as collateral). This study shows that bondholders do not lose in SLBT's and confirms previous results showing that stockholders gain from sale leaseback transactions. The results are consistent with the position that bondholders write provisions to protect their rights to the underlying assets, resulting in no wealth transfer from bondholders to stockholders when the firm sells off assets and leases them back.     

次优条件下商业银行存款保险的激励机制设计

信息不对称和监管成本的存在形成了银行存款体系的次优现实。信息不对称带来的逆向选择和道德风险导致监督不完全;正的监管成本又使得追求社会福利最大化的监管者出现一定程度的管制容忍。这些现实的存在都使得引入某种激励机制来改善现状成为必要。然而由于存款保险的特殊性,非全额保险和差别定价等传统的激励机制出现了失效的情况。本文引入了某种信号自我显示机制,通过选择菜单,激励银行自动显示监管者所需的信息,以解决存款保险中的信息不对称和激励问题;同时并提出了我国在建立存款保险制度时应注意的几个问题,主要包括强制保险和全额保险的必要性,以及配套相应的激励机制。     

RISK-TAKING INCENTIVES OF BANKS AND RISK-ADJUSTED DEPOSIT INSURANCE

The manager of a depository institution is shown to exhibit risk-taking behavior under the current insurance arrangement. Perfect monitoring or risk-based deposit insurance would eliminate this incentive if information were symmetric between bank managers and the insuring agency. Absent symmetric information, it is shown that a recently suggested scheme, where insurers collect insurance premiums based on projected and actual risk levels, does not control the risk-taking incentive. The only way to control this incentive through insurance rates is to levy a relatively high premium, which is not actuarially fair.     

DEBT REFUNDING AND SHAREHOLDER WEALTH: THE PRICE EFFECTS OF DEBT-FOR-DEBT EXCHANGE OFFER ANNOUNCEMENTS

This study examines the impact of debt refunding on common stock prices for a sample of 48 exchange offers announced from 1970 through 1981. Exchange offer announcements do not have a significant impact on average common stock returns but appear to produce idiosyncratic share price effects. Refunding-induced price effects were unrelated to several exchange offer characteristics including tax shield increases, exchange offer premia, and transaction costs of refunding. Common stock excess returns were negatively related to reductions in debt service payments and relaxation of dividend payment constraints. Thus, the evidence is consistent with theories predicting that certain debt refundings generate negative information-signaling price effects.     

商业银行的非均衡发展模式研究

本文从考察商业银行的非均衡特征入手,以美国银行市场为例,重点分析了非均衡现象出现的实质及由此而生的由市场手段调节的现代商业银行演化的新特征。我国商业银行的非均衡有自身的特点，在对外开放程度和地区经济发展差距不断扩大的影响下，我国商业银行非均衡正在呈放大趋势。直接表现为各地区商业银行经营模式迥异不同，这在一定程度上造成整体以集权为主的银行经营出现困难。在上述问题无法通过市场化的兼并、重组、破产等手段进行调节的情况下,培育更为健全的银行体系,塑造真正的市场主体,完善银行公工，充分利用高科技提高银行的经营效率，将有利于我国商业银行的持续健康发展。     

WEALTH EFFECTS OF ENFORCEMENT ACTIONS AGAINST FINANCIALLY DISTRESSED BANKS

We examine the stock price reaction for a sample of commercial banks to the signing of cease-and-desist orders, written agreements, and formal agreements with bank regulators. These agreements restrict financially distressed institutions from certain activities that may be perceived by the capital markets as favorable or unfavorable. Our finding of a significantly negative mean signing-day abnormal return suggests that these enforcement actions are not fully anticipated by the market and that, on average, these enforcement actions are perceived as being unfavorable for bank shareholders. Our cross-sectional analysis suggests that at least part of the negative market reaction is caused by a reduction in the moral hazard problem associated with financially distressed federally insured commercial banks. Although these actions are beneficial to both the federal deposit insurer and ultimately taxpayers, we interpret the cross-sectional findings as implying that regulators are not acting in a timely fashion to restore the financial health of these distressed “banks. Even though equity values fall, on average, when banks are faced with an enforcement action, our findings do not support the pre-FIRREA policy not to publicly disclose the signing of enforcement actions because the enforcement action itself is not the source but is merely a reflection of the bank's problems.     

EVIDENCE OF THE EFFECT ON SHAREHOLDER WEALTH OF CORPORATE SPINOFFS: THE CREATION OF ROYALTY TRUSTS

Corporate spinoffs and divestitures cause positive revaluation of the firm by the market. This paper examines a particular kind of spinoff, one of mineral interests into a royalty trust. Royalty trusts are associated with abnormal returns that come from positive market revalution and from special tax incentives inherent to trusts.