Approximate equilibria in markets with indivisible commodities

This paper presents results on the existence of approximate equilibria in large but finite exchange economies in which all the traders have non-convex consumption sets. As such, the paper gives a natural extension, to the finite economy, of Mas-Colell's results on existence with indivisible commodities and a continuum of agents. It also presents an approximate equilibrium theorem without any assumption of compactness or bounded non-convexity of preferences.     

The two sides of CEO option grants at the IPO

This paper examines the impact of CEO IPO option grants on IPO underpricing. Contrary to Lowry and Murphy (2007) who do not find a relationship between the two, this paper finds such a relationship when board independence, the power of the CEO and venture capitalists (VCs) are taken into account. The results are threefold. First, powerful CEOs are able to reap substantial gains from IPO options, to the detriment of the shareholders. Second, young, powerful VCs use IPO option grants to bribe the CEO to agree to an early IPO which will leave more of the existing shareholders' money on the table. Finally, IPO options only work as a value-enhancing incentive in the presence of strong boards.     

Economic Reforms and Productive Capacity Realisation in Bangladesh: an Empirical Analysis

Using firm level data from the Bangladesh food manufacturing sector, this paper examines the impact of economic reform on productive capacity realisation in the eighties. The results suggest that although improvement occurred in the realisation of productive capacities after the implementation of economic reforms, there is, however, room for significant further improvement in increasing output by realising the unrealised capacity.     

Saving dynamics in the Asian countries

This paper investigates empirically the factors that have influenced the savings behavior in the fast growing Asian economies—Singapore, South Korea, Malaysia, Thailand and the Philippines. Both the short and long-run movements of savings are modeled during the 1960–1997. The empirical results of the analysis based on time series data may be summarized as follows: (i) foreign savings deters domestic saving both in the short and long run; (ii) savings does not Granger cause economic growth, except for Singapore; (iii) the effect of interest rate on saving in Asian countries is inconclusive and it reflects the extent of financial liberalization adopted in these countries; and (iv) in the long run the causality runs from foreign to domestic savings.     

Nonparametric estimates of productivity and efficiency change in Australian Broadacre Agriculture

This paper computes and decomposes Färe‐Primont indexes of total factor productivity of Australian broadacre agriculture by estimating distance functions. Using state‐level data from 1990 to 2011, the empirical results show that TFP grew at an average rate of 1.36 per cent per annum in the broadacre agriculture over the period 1990–2011. There are variations of total factor productivity (TFP) growth across states and fluctuations over time within each state and territory. However, overall, there is a clear movement towards slower TFP growth across the sample period. Further decomposition of TFP growth shows that it is declining growth in technical possibilities (technological progress) that is the main driver of the declining trend in productivity growth in broadacre agriculture in Australia.     

Impact of Graduating with Honours on Entry Wages of Economics Majors*

Employers use various proxies to predict the future labour productivity levels of the job applicants. Success in school, especially in high-level coursework, is among the most widely used proxies to screen entry-level candidates. We estimate the causal effect of graduating with honours (i.e. with a grade point average of 3.00 and above out of 4.00) on the starting wages of economics majors in Türkiye. Using comprehensive micro data on all economics majors between 2014 and 2018, matched with administrative records about their first jobs, we implement a regression discontinuity analysis to investigate whether there is any statistically significant jump in the starting wages at the honours-degree cutoff. We find that graduating with honours increases the wages of males, while there is no impact on females. We further document that the impact on males is almost entirely driven by the graduates of non-elite universities. In particular, graduating with an honours degree increases the entry wages of males from non-elite universities by about 4%, on average. We provide an explanation for these patterns using the theory of statistical discrimination. We discuss the potential reasons behind the heterogeneous signal value of graduating with honours between males vs. females and elite versus non-elite university graduates.     

Investor interest, trading volume, and the choice of IPO mechanism in France

This paper investigates the relationship between underpricing and investor interest level prior to and after the IPO date. Empirical tests show a significant 3-day buy-and-hold abnormal return of 19.15%. It is positively related to the share demand-to-offer ratio in the pre-market period and to trading volume in the aftermarket. Despite a high initial underpricing for some book-built issues, the book-building procedure allows for more effective pricing and a lower divergence of opinion among investors in the aftermarket than the auction-like procedure.     

Differential Interpretations,Private Information and Trading Volume Around French Firms' Good News vs. Bad News Preliminary Announcements

ABSTRACT

This study provides new evidence that both differential interpretations and private information production spur trading volume for a sample of 144 preliminary earnings announcements in the French markets. After partitioning the sample into preliminary announcements that convey good news versus bad news, I find that good news stimulates more production of private information, whereas bad news leads to more differential interpretations. I further find that increased production of private information (but not differential interpretations) helps explain trading volume around good news preliminary earnings announcements. In contrast, differential interpretations (and not private information) help explain trading volume around bad news preliminary earnings announcements.     

Christian roots of capitalist civilization

A conceptual argument is offered for the centrality of religion to the structure of capitalist civilization. This centrality is documented by examples of the role of Christianity in European civilization.