Information asymmetry and international strategic alliances

This paper examines how information asymmetry affects cross-border strategic alliance formation by US firms over the period 2000–2008. We construct a measure, information costs, based on both geographical distance and the proportion of worldwide GDP the partner’s home country represents. Consistent with our expectations, we find an inverse association between information costs and cross-border strategic alliances. When considering the proportion of alliances formed with publicly quoted overseas partners, we find this is unaffected by the level of information costs but rather the level of stock market development, tax rate and general economic conditions. Information costs are, however, significantly negatively related to alliances with overseas private organizations. Our results offer clear support for the on-going importance of information asymmetry in corporate decision making.     

Über das Aequivalenzprinzip

Abstract

Das Prinzip von der Gleichheit von Leistung und Gegenleistung wird in der Lebensversicherungsmathematik in der Regel so ausgesprochen: Es soll für einen beliebigen, innerhalb der Versicherungsdauer gelegenen Zeitpunkt die vorhandene Rücklage im Vereine mit dem versicherungstechnischen Barwert sämmtlicher noch zu erwartender Leistungen des Versicherten stets gleich sein dem versicherungstechnischen Barwert sammtlicher noch zu erwartender Leistungen des Versicherers. Unter versicherungstechnischem Barwert ist hiebei der auf diesen Zeitpunkt unter Rücksicht auf die Wahrscheinlichkeit der Leistung und die Verzinsung bezogene Wert dieser Leistungen zu verstehen. Unter den Leistungen des Versicherers sollen die vertraglich bedingten Zahlungen, aber auch die Verwaltungskosten und Dividendenzahlungen verstanden sein. Der Zeitpunkt, auf welchen die versicherungstechnischen Barwerte der beiderseitigen Leistungen bezogen werden, ist im übrigen willkürlich, nur muss er stets für Leistung und Gegenleistung derselbe sein. Das Aequivalenzprinzip gilt in gleicher weise für den Beginn und das Ende der Versicherungsdauer. Hieraus folgt in bekannter Weise die nur vom formal mathematischen Standpunkte verschiedene, inhaltlich aber völlig gleichwertige Darstellung der Rücklage in der prospektiven bezw. retrospektiven Gestalt, während der Rücklage selbst als einer nach den gewählten Rechnungsgrundlagen zu schätzenden Grösse, immer nur ein prospektiver Charakter zukommt.     

Simulating Alternative Development Strategies: Some suggestions From Korea' Experience

This paper reviews the stylized facts about Korea's development strategy which distinguish it from most other developing countries. These stylized facts are then incorporated in two multi-sector models, a dynamic input-output (DIO) model and a computable general equilibrium (CEG) model. Both models are used to ask what might have happened to Korea if she had pursed an inward-looking rather than an outward-looking development strategy. [110]     

Towards a theory of accounting regulation: A discussion of the politics of disclosure regulation along the economic cycle

The paper by Bertomeu and Magee (this issue) endogenizes accounting regulation by a majority-seeking regulator and examines how the economic cycle affects mandatory reporting quality. This discussion puts the paper in the broader context of a theory of accounting regulation. Then, it focuses on crucial assumptions, including the exogenous evolution of the economy, the role of market frictions, the modeling of reporting quality, and the regulatory process and regulatory cycles, and provides suggestions for future research.     

Interaction effects of restructuring decisions on operating profit following performance shocks

This paper examines the interaction effects of restructuring activities for a sample of Australian firms experiencing significant declines in operating performance. Our sample firms respond to performance shocks with both financial and corporate restructuring and they achieve significant improvements in operating profits in each of the first 3 years following the shocks. We find that financial and corporate restructuring have both contemporaneous and lagged impact on operating performance. Most importantly, we show that the interaction of restructuring events has a strong influence on the corporate recovery process. We conclude that financial and corporate restructuring play complementary as well as interactive role in reversing a declining trend in operating profits.     

Economic Growth,Public Debt and Welfare: Comparing Three Budgetary Rules

Abstract. We present an endogenous growth model with externalities of capital and elastic labor supply where we allow for public debt and welfare‐enhancing public spending. We analyze different debt policies as regards convergence to a balanced growth path and their effects on long‐run growth and welfare. Three budgetary rules are considered: the balanced budget rule, a budgetary rule where debt grows in the long run but at a rate lower than the balanced growth rate and a rule where public debt grows at the same rate as all other economic variables but where it guarantees that the intertemporal budget constraint is fulfilled.     

Index Volume XI – 1977

Abstract:

This essay adapts Commons’s model of the legal foundations of capitalism to the peculiar circumstances of the neoliberal era. So doing provides a lens for seeing the steady erosion of state capacity to protect the commonwealth, even in nations with hegemonic currency. Our focus here is on the links between the “triple crisis” of the 1980s and the subprime and foreclosure crisis of the 2000s. We show how Brady bonds, after being used to resolve the Latin American debt crisis in the 1980s, provided a governing contractual context for subprime lending, and as such constrained the capacity of the U.S. government to respond to a crisis that preyed on the vulnerable, undercut community life, and contracted the commonwealth.     

The money-age distribution: Empirical facts and the limits of three monetary models

The money-age distribution is hump-shaped for the US post-war economy. There is no clear-cut relation between the variation of money holdings within generations and age. Furthermore, money is found to be only weakly correlated with both income and wealth. We analyze three motives for money demand in an overlapping generations setup in order to explain these observations: (1) money-in-the-utility, (2) an economy with costly credit service, and (3) limited-participation. All three models are consistent with the hump-shaped relation between average money holdings and age, yet they predict a much closer association between money holdings, income, wealth, and age than we find in the data. Only the limited-participation model partly replicates the low bivariate correlation between money and income as well as between money and interest-bearing assets. None of the three models satisfactorily explains these stylized facts.     

Support for contracting-out and public-private partnership: exploring citizens’ perspectives

ABSTRACT

Many studies have evaluated the merits and challenges of contracting-out and public-private partnership (PPP). However, few studies have examined citizens’ views of these alternative service-delivery mechanisms and what factors influence their views. Using results from a citizen survey of a mid-sized US city, the present study investigates how consumerism, the citizenry framework, and symbolic institutionalism influence public support for contracting-out and PPP. Our findings show that symbolic institutionalism provides the most significant and consistent explanation of public support for the mechanisms. Implications for public management practices and future research, especially on creating and capturing value through PPP, are discussed.