A Comparison of Bond Ratings from Moody's S&P and Fitch IBCA

Previous research has found that the bond market values the ratings of Moody's and Standard & Poor's. This paper extends earlier research by comparing the ratings of Moody's, Standard and Poor's, and Fitch IBCA. The authors examine a very large database with monthly observations of bonds and bond ratings over a five‐year time period. The analysis focuses on comparing rating levels, rating changes, and the impact of ratings on bond yields. The results show that firms with publicly available Fitch IBCA ratings have higher ratings from Moody's and S&P than firms without Fitch IBCA ratings. The typical firm releasing a Fitch IBCA rating has a lower yield (controlling for Moody's and S&P rating), a more stable rating, and is more likely to receive an upgrade. For split‐rated bonds (Moody's vs. S&P), Fitch IBCA serves as a tiebreaker. This evidence is consistent with the bond market valuing the ratings of all three raters—Moody's, Standard & Poor's, and Fitch IBCA.     

Political Risk and Purchases of Privatized State‐Owned Enterprises

We assess the valuation effects and risk for acquirers of privatized state‐owned enterprises (SOEs). The valuation effects of purchasers are positive and significant; they increase for purchasers that have recent high performance, better access to capital, and have engaged in larger acquisitions. The acquirer valuation effects are lower when the selling government is more corrupt, more bureaucratic, and a weaker financial performer. Acquirer's total and unsystematic risk increases, indicating that purchasers of SOEs realize diversification benefits. Systematic risk increases for purchasers when the government is characterized by high political risk.     

退耕农户长期生计分析

以陕西、青海两省4个县15个村400个退耕农户为研究对象,通过20年的成本效益分析,探讨了退耕还林对农户生计的长期影响,预测了退耕后林草产品的产出、价格和农产品产量,分析了样本农户退耕前后在土地利用、种植结构、收入和成本结构等方面的变化,对林草产品价格、退耕补助、毁林复耕等因素进行了敏感性分析。结果表明:在预测的价格和产出水平上,退耕提高了样本农户的收入水平。从长期看,退耕农户面临自然、技术和市场风险。要实现中国政府的生态建设目标,决策者应关注退耕农户尤其是退耕地比例高的农户的长期生计。     

Environmental Management and the Competitiveness of Nature-Based Tourism Destinations

Environmental management at nature-basedtourism destinations includes a private and apublic component. The former refers tovoluntary environmental protection activitiescarried out by individual (and groups of)tourism operators. These activities aremotivated by the dependence of the productprovided by the tourism industry on the qualityof the natural environment. Public sectormanagement, on the other hand, refers to theenvironmental regulations imposed on tourismbusinesses. The overall environmentalmanagement structure has a dual effect on thecompetitiveness of the tourism industry atnature-based tourism destinations. While theindustry may benefit from environmentalmanagement through demand stimulation, thetourism businesses also incur the associatedmanagement related costs. In this paper, theoverall effect of environmental management oncompetitiveness, as measured by aggregatetourism industry profitability, is estimated ina case study of Tropical North Queensland.     

Specialization,product development,evolution of the institution of the firm,and economic growth

This paper considers the effects of the division of labor on economic growth and welfare in a general equilibrium environment where changes in individual specialization and product development can proceed simultaneously. The nature of the dynamic equilibrium is shown to depend on the interaction of transaction efficiency, economies of specialization, and economies of complementarity. Where the dynamic equilibrium involves evolution in the division of labor, this will be associated with increased per capita real income and hence economic growth. It is also shown that the emergence of firms is an aspect of the evolution of division of labor if transaction efficiency for a producer good is lower than that for labor used to produce this good.     

Perceived environmental turbulence and its effect on selected entrepreneurship,marketing, and organizational characteristics in industrial firms

Entrepreneurship and marketing are approached as proactive corporate responses to an increasingly dynamic, threatening, and complex external environment. Both represent organizational orientations built around creativity, innovativeness, flexibility, and risk-taking. A conceptual model is proposed relating the levels of entrepreneurship, marketing activity, and marketing-related structure of a firm to the degree of perceived environmental turbulence confronting the firm. Results of a survey involving personal interviews with managers in 93 firms representing six industries are reported. Turbulence is found to have a significant causal impact on both the levels of entrepreneurship and the marketing orientation of the firm, but not on structural variables.     

The economic benefits of FASB's recommended disclosures: Evidence from the pharmaceutical industry

Prior research has documented an association between disclosure quality and various economic benefits, most notably between the cost of equity capital and market liquidity. We extend this literature by investigating whether pharmaceutical firms that comply with recommended voluntary disclosures of the Financial Accounting Standards Board (FASB) exhibit lower bid-ask spreads, greater market depth, and lower cost of equity capital. Cross-sectional analysis using pharmaceutical firms reveals a negative association between disclosure quality and bid-ask spreads (both the total spread and its adverse-selection component), but no association between disclosure quality and either market depth or the ex ante cost of equity capital. Overall, our findings provide some evidence of benefits accruing to pharmaceutical firms that comply with the FASB's recommended voluntary disclosures under the assumption that lower bid-ask spreads reduce the cost of capital and strong evidence that complying with FASB's recommended disclosures provide a direct benefit to small investors, those who bear the entire weight of bid-ask spreads.     

The New CFS Divisia Monetary Aggregates: Design, Construction, and Data Sources

The Center for Financial Stability (CFS) has initiated a new Divisia monetary aggregates database, maintained within the CFS program called Advances in Monetary and Financial Measurement (AMFM). The Director of the program is William A. Barnett, who is the originator of Divisia monetary aggregation and more broadly of the associated field of aggregation-theoretic monetary aggregation. The international section of the AMFM web site is a centralized source for Divisia monetary aggregates data and research for over 40 countries throughout the world. The components of the CFS Divisia monetary aggregates for the United States reflect closely those of the current and former simple-sum monetary aggregates provided by the Federal Reserve. The first five levels, M1, M2, M2M, MZM, and ALL, are composed of currency, deposit accounts, and money market accounts. The liquid asset extensions to M3, M4-, and M4 resemble in spirit the now discontinued M3 and L aggregates, including repurchase agreements, large denomination time deposits, commercial paper, and Treasury bills. When the Federal Reserve discontinued publishing M3 and L, the Fed stopped providing the consolidated, seasonally adjusted components. Also the Fed no longer provides the interest rates on the components. With so much of the needed component quantity and interest-rate data no longer available from the Federal Reserve, decisions about data sources needed in construction of the CFS aggregates have been far from easy and sometimes required regression interpolation. This paper documents the decisions of the CFS regarding United States data sources at the present time, with particular emphasis on Divisia M3 and M4.