Changing the rules again: Short selling in connection with public equity offers

We study the impact of two recent regulations that impose restrictions on short selling. First, since October 2007 any investor that short sells a firm’s stock is prohibited from purchasing shares in the firm’s seasoned equity offering (SEO) if the short occurred in the five days prior to the offering (pursuant to an amendment to Rule 105). Previously Rule 105 only disallowed investors from covering a pre-issue short sale with shares purchased in the offering. We hypothesize that the amended rule has the unintended consequence of greater discounting for overnight offers, which are not announced in advance, because the rule excludes some potential buyers and thereby forces underwriters to set lower offer prices to fully distribute the offer. The evidence supports this hypothesis. Second, we examine the impact of the SEC’s 2008 Emergency Order that greatly curtails naked short selling on all stocks under its jurisdiction. We find that the Emergency Order is associated with large increases in discounting for offers announced in advance, suggesting that the removal of naked short sellers is associated with reduced pre-SEO pricing efficiency. Taken together, the results imply that recent restrictions on short selling have significant unintended effects on the capital raising process.     

Longitudinal Poisson Assessment of Factors Influencing Farmers’ Market Counts

ABSTRACT

This study uses secondary longitudinal data and a first difference pooled Poisson regression model to explain annual counts for farmers’ markets in the United States. Data were collected for all 50 states and the District of Columbia for 10 years, from 2004 to 2013, leading to a longitudinal data set with 510 observations. Results indicate that population growth and funds routed toward Women, Infants, and Children (WIC) farmers’ market nutrition programs increase farmers’ markets’ annual counts. The rate ratio of farmers’ markets’ counts for highly populated states that have both WIC and senior farmers’ market nutrition programs is approximately three times greater than their counterparts. Areas with high agriculture output experience a significant increase in counts. States located in the south and in desert areas have lower counts than other regions. This study suggests important recommendations to policy makers, farmers’ market managers, and researchers.     

Bartering technology for local resources in exogamic Sino-foreign joint ventures

Five hypotheses were formulated regarding the exogamic nature of Sino-foreign joint ventures and two propositions regarding incentives for technology transfers and protection against imitation. Research relied on a questionnaire-based investigation in 67 joint ventures and case studies in various industries. Three lessons were drawn. (1) Each partner contributes with a differentiated set of idiosyncratic and non-substitutable set of resources; technology is the core contribution of foreign companies no matter which aspect is examined. There is an almost perfect symmetry between the pooled resources and the learning objectives of each partner. (2) Chinese respondents give a strong competitive value to technology transfers. (3) Beyond traditional technical and legal protection, foreign companies slow down imitation with three strategies: taking advantage of time lag; keeping the most creative value added stages at home; playing, not on the technology itself, but on inherent financial or commercial obstacles.     

Motility: mobility as capital

Social and territorial structures form intricate relations that transcend a social stratification or spatial focus. Territorial features and geographic displacements are structuring principles for society, as societal features and social change effect the structure and use of territory. Based on our examination of the conceptual and theoretical links between spatial and social mobility, we propose a concept that represents a new form of inequality. Termed ‘motility’, this construct describes the potential and actual capacity of goods, information or people to be mobile both geographically and socially. Three major features of motility — access, competence and appropriation — are introduced. In this article, we focus on conceptual and theoretical contributions of motility. In addition, we suggest a number of possible empirical investigations. Motility presents us with an innovative perspective on societal changes without prematurely committing researchers to work within structuralist or postmodern perspectives. More generally, we propose to revisit the fluidification debate in the social sciences with a battery of questions that do not begin and end with whether or not society is in flux. Instead, we introduce a field of research that takes advantage of the insights from competing paradigms in order to reveal the social dynamics and consequences of displacements in geographic and social space. Les structures sociales et territoriales forment des relations complexes qui dépassent toute stratification sociale ou convergence spatiale. Les caractéristiques territoriales et déplacements géographiques sont, pour la société, des principes structurants, tout comme les caractéristiques sociétales et le changement social font naître la structure et l'usage d'un territoire. A partir d'un examen des liens conceptuels et théoriques entre les mobilités spatiale et sociale, cet article propose un concept traduisant une nouvelle forme d'inégalité: appelé‘motilité’, il décrit le potentiel et l'aptitude réelle des marchandises, informations ou individus àêtre mobiles sur un plan tant géographique que social. Trois traits essentiels de la motilité— accès, compétence et appropriation — sont présentés. Si l'article s'attache aux contributions conceptuelles et théoriques de la motilité, il suggère aussi plusieurs axes possibles d'études empiriques. La motilité offre une perspective novatrice sur les changements sociétaux, sans engager prématurément les travaux de recherches sur des rails structuralistes ou post‐modernes. Plus généralement, il s'agit de revisiter le débat sur la fluidification en sciences sociales à l'aide d'une batterie de questions qui, ni au début ni à la fin, ne demande si la société est fluctuante ou non. En revanche, l'article propose un domaine de recherches qui exploite les réflexions tirées de paradigmes concurrents afin de révéler la dynamique sociale et les conséquences des déplacements dans l'espace géographique et social.     

Does Ignoring Heterogeneity in Impacts Distort Project Appraisals? An Experiment for Irrigation in Vietnam

Could the simplifying assumptions made in project appraisalbe so far from the truth that the expected benefits of publicinvestments are not realized? Using data for Vietnam, commonlyused estimates of the benefits from irrigation investments basedon means are compared with impacts assessed through an econometricmodeling of marginal returns that allows for household and areaheterogeneity using integrated household-level survey data.The simpler method performs well in estimating average benefitsnationally but can be misleading for some regions, and, by ignoringheterogeneity, it overestimates gains to the poor and underestimatesgains to the rich. At moderate to high cost levels, ignoringheterogeneity in impacts results in enough mistakes to eliminatethe net benefits from public investment. When irrigating aslittle as 3 percent of Vietnam's nonirrigated land, the savingsfrom the more data-intensive method are sufficient to coverthe full cost of the extra data required, ignoring other benefitsfrom that data.     

Derivation of Long-run Factor Demands from Short-run Responses

The concept of the restricted cost function provides a dual approach to the analysis of short-run technology. It allows also, under curvature restrictions, inference of the different possible equilibria, according to constraints on the firms. Moreover, in this paper, the properties of the restricted cost function are spelled out. Substitution possibilities related to the different regimes are also derived from the restricted cost function. This theoretical framework is applied to characterize the French cereal-producing sector by using a cross-section of farms.     

Opportunities for Revitalizing Stagnant Markets: An Analysis of Household Appliances

For many durable consumer products, the conditions needed for sustained growth in sales seem to have disappeared. Some of these products have reached saturation levels of ownership; others seem to have plateaued at lower levels of ownership. The authors of this article, Professors Clark, Freeman, and Hanssens, have taken a multidisciplinary approach to the analysis of one portion of the consumer durables market—household appliances—to detect the underlying components of demand. They speculate on how these demand components will fare in the coming years and draw implications for the way these markets can be stimulated.     

The profit rate: where and how much did it fall? Did it recover? (USA 1948–2000)

This study is devoted to the empirical investigation of the gravitation of profit rates among industries around a single value in the United States since World War II. The framework of analysis is that developed by classical economists and Marx, and used in many contemporary studies. The gravitation of profit rates around a single value results from the mobility of capital seeking a maximum profit rate. A preliminary concern is to determine the field in which this mobility of capital is likely to occur. A segment of the economy is excluded because of its deficient capitalist nature. After this exclusion, it appears that the profit rates of industries do tend to gravitate around a common value. An important finding of this study is that this gravitation is not observable within a subset of industries, such as Transportation or Public Utilities, which utilize very large amounts of fixed capital in comparison to employment or output.     

Testing Vietnam's public safety net

The paper examines the impact of Vietnam's main welfare programs on moving poor people out of poverty and protecting the non-poor from becoming poor. To explore the role that transfers played in the country's dramatic reduction of poverty in the 1990s, counterfactual consumption levels are estimated allowing for behavioral responses. The findings suggest that transfers helped only a few people escape poverty and protected even fewer from poverty. Hence, the public safety net was largely irrelevant to Vietnam's poverty reduction. A larger and better designed public safety net is crucial for the future. Journal of Comparative Economics 32 (4) (2004) 661–679.