STOCK DIVIDENDS AS SIGNALS

This study analyzes stock dividends as signals from managers. It is argued that in the presence of information asymmetries between managers and investors, stock dividends provide a relatively inexpensive and unambiguous signalling device. Based on an examination of the daily returns around 317 stock dividend announcements, it is concluded that these announcements are interpreted by investors as signals from managers. Further analysis also indicates that stock dividend size is positively related to announcement day returns.     

Regulatory Optimal Bank Size

This paper presents a study of potential outcomes of bank growth. Banks grow by expanding market presence within the geographic region within which they are domiciled and by expanding presence into other regions via new implantations. Growth leads to improved diversification, but also results in an increase in the risk of catastrophe that a bank’s failure may engender. The conclusion is that there will exist a threshold size of bank at which the rate of growth in its systemic risk exceeds the rate of decline in its risk of insolvency. An empirical study of US bank call report data provides results that are consistent with the theory presented in the first part of the paper.

Business groups and the incorporation of firm-specific shocks into stock prices

Firm-specific information has a damped effect on business group-affiliated firms’ stock prices. Such firms’ idiosyncratic stock returns are less responsive to idiosyncratic commodity price shocks than are the idiosyncratic returns of otherwise similar unaffiliated firms in the same country and commodity-sensitive industry. Using global commodity shocks means we assess responses to common idiosyncratic shocks of the same magnitude, frequency, and observability. Further identification follows from difference-in-difference tests exploiting successful and matched exogenously failed control block transactions. We conclude that business group firms’ stock prices provide less firm-specific information to capital providers and managers.     

MARRIAGE,MARKETS, AND MONEY: A COASIAN THEORY OF HOUSEHOLD FORMATION

This article integrates search‐based models of marriage and money. We think about households as organizations, the way Coase thinks about firms, as alternatives to markets that become more attractive when transactions costs increase. In the model, individuals consume market‐ and home‐produced goods, and home production is facilitated by marriage. Market frictions, including taxes, search, and bargaining problems, increase the marriage propensity. The inflation tax encourages marriage because being single is cash intensive. Microdata confirm singles use cash more than married people. We use macrodata over many countries to investigate how marriage responds to inflation, taxation, and other variables.     

A model of multinational enterprise subsidiary staffing composition

A large proportion of the multinational enterprise (MNE) literature focuses on parent country national (PCN) expatriates. The high costs of managing and supporting PCNs on foreign assignments, however, have made these assignments less attractive for MNEs and, as a result, MNEs are more actively exploring ways to effectively utilize third country nationals (TCNs) and host country nationals (HCNs), as well as PCNs to satisfy international subsidiary staffing needs. Grounded in the person–environment (P–E) fit theory, we delineate three environmental dimensions (strategic, national and organizational) to offer some propositions that may serve to guide this exploration. These propositions are based on an integrative model that examines the MNE subsidiary staffing composition under different combinations of strategic, national and organizational dimensions. We conclude with suggestions for future research.     

Inflationary bias in middle to late transition Czech Republic

A series of studies has now confirmed the Filer and Hanousek’s [Economic Systems 24 (2000) 285] suggestion that inflation mismeasurement during the transition is a serious problem of the same relative magnitude (and greater absolute magnitude), as in advanced market economies. During the 1990s in the Czech Republic, inflation was overstated by more than four percentage points a year. The largest portion of this bias is due to uncaptured quality changes. In effect, Czech consumers are living considerably better after the fall of communism, but this increase in living standards is manifested through better quality, rather than greater quantities of goods consumed.     

Effects of family structure and socialization on materialism: a life course study in Thailand

Consumer researchers have long been interested in understanding the development of materialistic attitudes and values in different cultural settings. The life course approach, which has developed recently as an interdisciplinary programme for studying various aspects of behaviour, was used as an overarching framework for studying the development of materialism in Thailand. Specifically, the paper first presents the general conceptual framework that serves as a blueprint for discussing theoretical perspectives. Next, hypotheses derived from life course perspectives are formulated, and a survey of young adults (ages 20 to 32) is used to test them. We found that family disruption influences materialism only among those young adults from lower social classes. Findings of this paper have implications for theory development and suggest directions for future research.     

"The Reality of the Present and the Challenge of the Future": J. Fagg Foster for the Twenty-First Century

This paper revisits J. Fagg Foster’s early assessment of the relevance of John Maynard Keynes’s theory of institutional economics. In his view, neither institutionalists nor most of Keynes’s followers really recognized the importance of Keynes’s theoretical insights. I examine Foster’s views on economic theory, with a particular focus on monetary theory. I apply Foster’s approach to what is now called modern money theory, an approach developed by heterodox economists working in the institutionalist and post-Keynesian traditions. I argue that this approach is consistent with Foster’s, and it offers a way forward to policy formation for the twenty-first century.