A RE-EXAMINATION OF THE EFFECT OF 12B–1 PLANS ON MUTUAL FUND EXPENSE RATIOS

In this paper we re-examine the effect of 12b–1 payments on mutual fund expense ratios by analyzing data from 1988 through 1991. The findings are consistent with previous studies that find charges are a dead-weight cost borne by shareholders. However, we show that this cost increases over time.     

Nea presidential address, 1991: Sixteenth-century European expansion and the economic decline of Africa (in honor of Walter Rodney)

Prior to the sixteenth century, the Indian Ocean trading network was one of the wealthiest commercial regions in the world. It included states of East Africa, the Arabian peninsula, the Indian subcontinent, Southeast Asia, China and Japan. By circumnavigating Africa, Portugal was the first European nation to gain access to the region. Through the exercise of naval superiority, blockading of strategic shipping lanes, imposition of duties and expulsion of Swahili and Muslim merchants, Portugal exercised a mercantile monopoly which ultimately led to the region’s rapid economic decline. Using rare historical documents from Po rtugal and Africa, this study traces the effects of Portuguese expansion on the economies of East Africa and trade in the Indian Ocean.     

Competitive and Information Effects of Cross-Border Stock Listings

We examine the effect of 269 cross‐border listings on rivals in the listing and domestic markets and find that U.S. rivals experience significant gains whereas domestic rivals do not. Both competitive and information effects are important in explaining the reaction of U.S. rivals. Regarding the competitive effects, the reaction of rivals is less favorable when listings originate in developed countries and more favorable when listing firms do not have prior operating presence in the United States. Regarding the information effects, the reaction is less favorable when listings are combined with equity offerings and more favorable when the listing is the first to occur within an industry.     

Are Securitizations in Substance Sales or Secured Borrowings? Capital‐Market Evidence*

Two standard‐setting approaches have emerged globally to guide the choice of accounting for securitizations: the control and components approach (SFAS No. 125 and SFAS No. 140) and the risks and rewards transfer approach (IAS No. 39). A lack of consensus about derecognition accounting is a major impediment to achieving convergence in global standards that must be resolved. Thus, both SFAS No. 140 and IAS No. 39 will be reexamined, and evidence pertinent to the debate is timely and important. In this study, we present evidence consistent with the view of credit‐rating analysts, who view many securitizations as, in substance, secured borrowings. Specifically, for a sample of originators applying sale accounting guidance in SFAS No. 125 / 140 during the period 1997‐2003, we show that off‐balance‐sheet debt related to securitizations has, on average, the same risk‐relevance for explaining market measures of risk (that is, CAPM beta) as on‐balance‐sheet debt. We also find that, in a returns and earnings association framework, the pricing multiple on securitization gains declines as the amount of off‐balance‐sheet debt increases, implying that investors take off‐balance‐sheet debt into account when assessing the valuation‐relevance of such gains. For those who advocate the control and components approach to securitization accounting, our results suggest that, at least for frequent securitizers, the put option arising from implicit recourse is a “missing piece” that is not currently accounted for when calculating securitization gains. Our results challenge the extant measurement standards in SFAS No. 140.     

Employment,schooling and productivity growth

Summary This paper presents an empirical analysis of labour demand and labour productivity growth in The Netherlands. Assuming an aggregate production function with as factors capital and 3 types of labour, distinguished by educational attainment, cost minimization leads to a set of 3 labour demand relations to be estimated on time series data. Using the estimates and the implied elasticities, aggregate labour productivity growth is decomposed into factor substitution, autonomous factors, labour time shortening, economies of scale, utilization rates and the increased educational level of the working population. The contributions of substitution, utilization rates and education appear to be substantial, notably in the seventies.

List of symbols

Variables a _i Efficiency index of skill leveli - C production - h _i working-time index for skill leveli - g _i steady-state growth rate of skill leveli - K capital stock - L _i employment volume of skill leveli - L _i ^* desired level of labour skill leveli - p output price - p ^* desired output price - s _i ^* long-run static labour shares in the production value - p _k rental price of capital - P index of total factor productivity - P _l index of labour productivity - u _i utilization rate of skill leveli - u _k utilization rate of capital - w _i wage rate for skill leveli - y production volume - y _yij Hicks partial elasticities of complementarity - _i steady-state cost share of skill leveli - _k Bk steady-state cost share of capital - _f lf highest level price index in cost function nesting - _g 4 intermediate level price index in cost function nesting - _h 4 lowest level price index in cost function nesting - _i steady-state relative wage share of skill leveli - _ij Allen partial elasticities of substitution Parameters d _i l adjustment speed of skill leveli - d _p price adjustment speed - M mark-up on marginal costs - scale elasticity of production - _i distribution parameter in cost function,i = 3, g - _i distribution parameter in cost function,i = k, h - _i distribution parameter in cost function,i =1, 2 - _i autonomous labour productivity growth for skill leveli - _i cost share of skill level in base year - _f production cost index in base year - _i hours elasticity in labour efficiency index - group elasticity of substitution betweenL ₃ and (K, (L ₁,L ₂)) - _g Og group elasticity of substitution betweenK and (L ₁,L ₂) - _h 6h group elasticity of substitution betweenL ₁ andL ₂ We would like to thank B. Downey, G.M.M. Gelauff, A. Nieuwenhuis, J.M.M. Ritzen, J.C. Siebrand and an unknown referee for helpful comments on earlier drafts.