The Efficiency of Tenure Contracts in Academic Employment

Academic research is a public good whose production is supported by the tuition‐paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her entire cumulative research record. We show that, under a broad range of education market conditions, a profit‐maximizing university will apply a “high” minimum retention standard to the production of a junior professor who has no record of past research, but a “zero” retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the “high” probationary hurdle. But if and when those education market conditions change, tenure‐based contracts may cease to be optimal.     

Deliberative Democracy and Local Governance: Towards a New Agenda

Over the last decade scholars of urban governance and deliberative democracy have produced large literatures. Theorists of deliberative democracy have conceptualized the normative implications of ‘deliberation’ and explored real‐world decision‐making arrangements that approximate those ideals. Scholars of urban governance have theorized and explored the outcomes of different institutional arrangements for the governance of cities and regions. Whereas empirical democratic theory has increasingly been interested in local contexts, researchers of urban governance have been progressively more concerned about the implications of emerging patterns of urban governance for democratic accountability. However, despite the recent mutual interest among researchers in both fields, debates within these literatures frequently ignore each other and are not systematic. This introductory article reviews recent contributions that have fruitfully investigated the tension between deliberation and governance in a more systematic fashion, and concludes that our understanding of those issues is significantly improved by a research agenda that pursues an integrated approach.     

Earnings and Dividend Announcements: Is There a Corroboration Effect?

We examine abnormal stock returns surrounding contemporaneous earnings and dividend announcements in order to determine whether investors evaluate the two announcements in relation to each other. We find that there is a statistically significant interaction effect. The abnormal return corresponding to any earnings or dividend announcement depends upon the value of the other announcement. This evidence suggests the existence of a corroborative relationship between the two announcements. Investors give more credence to unanticipated dividend increases or decreases when earnings are also above or below expectations, and vice versa.     

Spinoff/Terminations and the Value of Pension Insurance

This paper derives the value of Pension Benefit Guarantee Corporation (PBGC) pension insurance under two scenarios of interest. The first allows for voluntary plan termination, which appears to be legal under current statutes. In the second scenario, termination is prohibited unless the firm is bankrupt. Empirical estimates of PBGC liabilities are calculated. These show that prospective PBGC liabilities greatly exceed current reserves for plan terminations, that even under a bankruptcy-only termination rule, PBGC liabilities still would be quite sensitive to discretionary funding policy, and that the increasingly common practice of pension spinoff/terminations, substantially increases the present value of the PBGC's contingent liabilities.