The Impact of Liquidity on Debt Maturity After a Financial Crisis: Evidence from the Gulf Cooperation Council Region

This article contributes to the existent literature on corporate debt maturity by studying a new channel through which firms may mitigate the effects of a major economic downturn such as the 2008 global financial crisis. More specifically, using a sample of 208 listed firms in the Gulf Cooperation Council (GCC) region, we find that an increase in firms’ current ratios after the crisis is associated with an increase in long-term financing. We also find that a financially constrained firm can still access long-term financing if its current ratio after the crisis is beyond a specific threshold. Additionally, we highlight the differences in the typical drivers of debt structure between GCC countries and industries.     

PPP in the medium run: The case of Norway

Existing studies generally reject purchasing power parity (PPP) on data sets from countries that have been affected by large real shocks, including Norway. However, we offer strong evidence of PPP between Norway and its trading partners during the post-Bretton Woods period, in which the Norwegian economy has experienced numerous real shocks such as discoveries of large petroleum reserves and oil price shocks. In particular, the behavior of the Norwegian real and nominal exchange rates appears remarkably consistent with the PPP theory. Moreover, convergence towards PPP is relatively rapid; the half-life of a deviation from parity is just about 1.5 years. We show that such deviations are primarily eliminated by adjustments in the nominal exchange rate and we offer some explanations for the relatively rapid convergence towards PPP.     

Public Predisclosure Information, Firm Size, Analyst Following, and Market Reactions to Earnings Announcements

Abstract:   This study examines the effects of public predisclosure information on market reactions to earnings announcements. We develop an empirical measure of public predisclosure information impounded in price prior to earnings announcements by cumulating abnormal returns on public news release dates during the quarter. Consistent with prior literature, we document a negative association between this measure and market reactions to subsequent earnings announcements. Moreover, we find that after controlling for this measure, firm size and analyst following are significantly positively associated with market reactions to earnings announcements. Contrary to prior empirical evidence, our results suggest that, after controlling for actual predisclosure information impounded in price, market reactions to earnings announcements are greater in magnitude for larger, more widely-followed firms than for smaller, less widely-followed firms.     

An empirical analysis of production distortions in the mid-Atlantic surf clam and ocean quahog fishery

This paper presents empirical evidence of production distortions under controlled access management in the Mid-Atlantic surf clam and ocean quahog fishery. Results indicate that vessels harvested multiple clam species even though the harvest technology exhibits diseconomies of scope. Vessels also operated in a region of the production surface where the marginal product of vessel capital services was negative. These distortions are explained by perverse regulations which restricted vessel capital replacement and severely limited fishing times.     

Multicriteria Decision Analysis of Stream Restoration: Potential and Examples

Within stream restoration practice there has been little use of formal decision analysis methods for evaluating tradeoffs in selecting restoration sites and design alternatives. Restoration planning suffers from poorly defined objectives, confusion of objectives and means, and a lack of consideration of tradeoffs. Multicriteria decision analysis (MCDA) methods have the potential to improve restoration decision making by quantifying non-economic objectives, communicating tradeoffs, facilitating consistent and explicit valuation, and focusing negotiation on ultimate objectives. To explore the potential usefulness of MCDA, we first review restoration practices and define the characteristics of projects that are good candidates for MCDA. We also present two case studies. The first study is a prioritization of stream reaches for restoration that illustrates how value judgments can affect such decisions. The second study addresses the proposed removal of the Ballville Dam on the Sandusky River in Ohio. An important challenge in the dam removal decision is the linking of habitat improvements to changes in species populations and ecological services that people value. The analysis shows how MCDA can assist decision making by clarifying tradeoffs, in this case by showing that the key issues are conflicts among ecological criteria—not all of which are improved by restoration.