The Relationship Between Market Efficiency and Insider Ownership in Large and Small Firms

The study examines insider ownership in large and small firms in relation to market efficiency. Recent studies have found a positive and significant relation between inside ownership and stock market performance. Such a finding is predicated upon the idea that inside ownership minimizes agency costs caused by the conflict between hired managers and shareholders. It is argued here that semi-strong form market efficiency requires that all public information, including insider ownership, be quickly impounded into the price of a stock. If that is the case, the expected present value of a change in agency cost should be incorporated into the stock price shortly after any significant change in ownership. Hence, if the estimate is unbiased, the longer-term performance of firms should not be effected by such changes. The issue is examined for both large, well-known firms and for smaller, less-known firms. The hypothesis that markets are generally efficient with respect to insider ownership information is rejected.     

PITFALLS IN CROSS‐SECTION STUDIES WITH INTEGRATED REGRESSORS: A SURVEY AND NEW DEVELOPMENTS

In cross‐section studies, if the dependent variable is I(0) but the regressor is I(1), the true slope must be zero in the resulting “unbalanced regression.” A spuriously significant relationship may be found in large cross‐sections, however, if the integrated regressor is related to a stationary variable that enters the DGP but is omitted from the regression. The solution is to search for the related stationary variable, in some cases the first difference of the integrated regressor, in other cases, a categorical variable that can take on limited number of values which depend on the integrated variable. We present an extensive survey, new developments, and applications particularly in finance.     

Academic Economic Opinion in East Asia

Surveys of economists' opinions have been reported from around the world over the past two decades, but never (as far as we are aware) from a non-Western country. This article presents the results of our survey of academic economists drawn from ten East Asian nations. Respondents gave their views on a number of economic propositions ranging across issues of deregulation, government business enterprises, micro-economic and labour market reform, income distribution, and attitudes to the market. Finally, the article reports the results of multidimensional scaling techniques which were used to compare the attitudes of East Asian academic economists toward the market with those of their international colleagues. Overall, we found that while our colleagues in Asia make some allowances for circumstances unique to fast-growing developing economies, their predilection toward market solutions to economic problems reflects that of their (predominantly) Western training. Economists in the ‘Tiger’ nations (Hong Kong, Singapore, Taiwan and South Korea) more closely reflect the views of colleagues in the market-friendly West (especially North America, Australia and Germany) than do economists in the newly emerging (‘non-Tiger’) nations such as Malaysia, Thailand, Indonesia and the Philippines.     

Equity and asset growth among Subchapter S banks

Since 2004, commercial banks in the United States have been allowed to elect Subchapter S (hence Sub-S) status with up to 100 shareholders. That limitation may promote more effective monitoring of bank managers by shareholders which can, in turn, explain previous findings of superior performance among Sub-S banks. The present research focuses on the possibility that the shareholder limitation also constrains opportunities for bank growth, or a slow growth hypothesis for Sub-S banks. Using a differences-in-differences regression approach for a sample of community banks (i.e., less than $1b in assets) from 2004 to 2014, and controlling for initial assets and urban location, it is found that annual growth in real assets and equity was significantly higher among banks that never held Sub-S status than for banks that always held Sub-S status, and that banks switching to Sub-S later grew significantly faster than those that always held Sub-S status. Fixed effects regressions show that switching to Sub-S status significantly reduced equity growth, with asset growth significantly reduced after 2008. In conjunction with earlier findings, the results suggest that the availability of Sub-S status helped to protect and strengthen community banks across a time period including substantial financial turmoil.     

Migration,Ethnicity and Solidarity: ‘Multinational Workers’ in the Former Soviet Union

We investigate migrant construction workers’ experiences in the Former Soviet Union, examining their attitudes to other ethno-national groups, unions and collective action. Industrial relations and migration studies view migrant workers’ hypermobility and diversity, under conditions of low union coverage and rising nationalism, as potentially obstructing consciousness-raising and mobilizing. Workers in our study faced union indifference, ethno-national segregation and discrimination. However, managerial abuses, informality and contestation from below led to spontaneous mobilization. Lack of institutional channels to solve these disputes drove workers’ further mobility. Complex mobility trajectories and collective action translated into increased awareness of collective interests and rejection of nationalist ideologies. The outcome is ‘multinational workers’ potentially resistant to nation-state politics and capital's logics but also aware of the value and usefulness of collective solidarities. Thus, previous arguments solely associating exit with individualistic attitudes, and post-socialist legacies with workers’ quiescence present only partial pictures.     

FINANCING SATELLITE OUTPATIENT CARE IN RURAL HOSPITALS

Providing health care to low income or elderly residents of rural areas remains a serious national health care problem in the United States. This case study evaluates an intervention for primary outpatient care to a particular class of patients – veterans – and shows how it can benefit them. Locating the outpatient clinic in a struggling rural hospital makes an outreach by the urban veterans hospital financially feasible and is profitable for the rural hospital.     

Measuring the unmeasurable: an application of uncertainty quantification to Treasury bond portfolios

We extract from the yield curve a new measure of fundamental economic uncertainty, based on McDiarmid’s diameter and related methods for optimal uncertainty quantification (OUQ). OUQ seeks analytical bounds on a system’s behaviour, even where aspects of the underlying data-generating process and system response function are not completely known. We use OUQ to stress test a simple fixed-income portfolio, certifying its safety—i.e. that potential losses will be ‘small’ in an appropriate sense. The results give explicit tradeoffs between: scenario count, maximum loss, test horizon, and confidence level. Unfortunately, uncertainty peaks in late 2008, weakening certification assurances just when they are needed most.     

Segregación por género en el sector manufacturero formal de la India

Mediante el cálculo de un índice de disimilitud con datos de la Encuesta Anual de Industrias, los autores constatan que la segregación por género en las manufacturas indias entre 1989–1990 y 2000–2001 disminuyó, aunque debido sobre todo a cambios en la estructura sectorial del empleo, y no tanto a la integración de género. El índice resultó sensible al número de grupos de industrias establecido en la clasificación utilizada para el cálculo. Tanto a escala nacional como estatal, las mujeres tienen muy pocas oportunidades de empleo formal, concentradas en ciertos sectores manufactureros tradicionalmente femeninos, como los de alimentos, tabaco, confección, hilado y textil.