Free Cash Flow,Shareholder Value,and the Undistributed Profits Tax of 1936 and 1937

In 1936, the Federal Government unexpectedly imposed a tax on undistributed corporate profits. Despite the direct costs of the tax, its announcement produced a positive revaluation of corporate equity, particularly among lower-payout firms. We interpret this as evidence of a divergence between managerial and shareholder preferences regarding dividend payout policies, consistent with the presence of agency costs. We also find that despite the incentives created by the tax, the actual growth in dividends during 1936 was lower among firms judged more likely to be subject to higher agency costs after controlling for liquidity, debt, and the growth in earnings.     

中国的健康人力资本与收入增长

本文首次将人口健康作为人力资本的一种形式,探讨其在中国经济奇迹中的作用。基于中国健康与营养调查(CHNS)数据,我们估计了以家庭为基础的个人收入生产函数,发现以下主要结论。首先,个人健康是决定中国家庭人均收入的重要因素。第二,相对而言,农村人口比城市人口的健康经济回报更大。第三,女性比男性的健康经济回报更大。本文首次将人口健康作为人力资本的一种形式,探讨其在中国经济奇迹中的作用。基于中国健康与营养调查(CHNS)数据,我们估计了以家庭为基础的个人收入生产函数,发现以下主要结论。首先,个人健康是决定中国家庭人均收入的重要因素。第二,相对而言,农村人口比城市人口的健康经济回报更大。第三,女性比男性的健康经济回报更大。     

TOWARDS AN ATTENTION-BASED VIEW OF THE FIRM

The central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision-makers. What decision-makers do depends on what issues and answers they focus their attention on. What issues and answers they focus on depends on the specific situation and on how the firm’s rules, resources, and relationships distribute various issues, answers, and decision-makers into specific communications and procedures. The paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation. © 1997 by John Wiley & Sons, Ltd.     

The Variability of IPO Initial Returns

The monthly volatility of IPO initial returns is substantial, fluctuates dramatically over time, and is considerably larger during “hot” IPO markets. Consistent with IPO theory, the volatility of initial returns is higher for firms that are more difficult to value because of higher information asymmetry. Our findings highlight underwriters’ difficulty in valuing companies characterized by high uncertainty, and raise serious questions about the efficacy of the traditional firm‐commitment IPO process. One implication of our results is that alternate mechanisms, such as auctions, could be beneficial for firms that value price discovery over the auxiliary services provided by underwriters.     

Investigation of Products Liability Attitudes and Opinions: A Consumer Perspective

The area of product safety and products liability legislation has been the subject of a great deal of academic research. Policymakers and business executives have been surveyed to determine their attitudes toward liability and product safety concerns. In addition, a substantial amount of research has focused on the impact of products liability trial outcomes on business and public policy. However, there are relatively few studies reporting opinions, attitudes, and predispositions of consumers regarding relevant liability topics. This article explores the consumer perspective on several critical questions relating to products liability and product safety. The results indicate a wide divergence of opinion exists among consumers on key issues shaping current trends in the products liability legal environment. Implications for consumers, business, and public policy are discussed.     

The Professions Under Scrutiny: An Antitrust Perspective

Increasingly, the professions are coming under the scrutiny of the antitrust laws. Such anticompetitive forms of professional conduct as group boycotts, arbitrary and unreasonable licensing requirements, barriers to entry and exclusionary practices, price-fixing, stifling of innovative delivery systems, and restrictions on the scope of professional practice are reviewed in this article. Also examined are the problems encountered by the courts in applying antitrust law to the professions. The review of the literature reveals modest evidentiary support for a shift in the burden of requiring regulation to those proposing it. Several alternatives are set forth to aid in the development of procompetitive professions.     

Customer Characteristics and Attitudes at Participatory and Supermarket Cooperatives

Rising food prices have contributed to an increase in the number of food cooperatives in the United States. The present study was undertaken to learn more about the characteristics and motives of food co-opshoppers at large supermarket cooperatives with paid staff and a full product range and small participatory co-ops with volunteer workers and selective merchandising policies. Customer counts and interviews were conducted at participatory and supermarket co-op stores and nearby commercial supermarkets in Northern California and in New York State. Shoppers at the participatory co-ops were found to be young, well-educated, ethnically homogeneous, non-affluent, and motivated primarily by low prices, food quality, natural food and co-op philosophy. Customers at supermarket co-ops tended to be more diverse in age and ethnicity, well-educated, with eclectic food tastes, and motivated primarily by convenience, low prices and co-op philosophy. Customers at near by commercial supermarkets were also heterogeneous in age and ethnicity and motivated primarily by price and convenience. The implications of the different customer populations and motives for the future of food co-ops are discussed.     

Market Making in the Options Markets and the Costs of Discrete Hedge Rebalancing

In this paper we provide empirical evidence consistent with the hypothesis that options market makers face risks in managing inventory that are unique to the options markets. In particular, we show that risks associated with the inability to rebalance an option position continuously and uncertainty about the return volatility of the underlying stock each account for a statistically and economically significant proportion of the bid-ask spreads quoted for a sample of Chicago Board Options Exchange options.