Dividend sensitivity to economic factors,stock valuation,and long-run risk

In this paper, we develop a theoretical stock valuation model that takes into account the long-run sensitivity of dividends to various economic factors. Our valuation process integrates the multidimensionality of uncertainty, as well as the long-run concept of risk (recently proposed in the literature). More precisely, we demonstrate that a stock’s long-run dividend growth is negatively related to its current dividend–price ratio and linearly related to N sensitivity coefficients, given by the long-run sensitivity between dividends and economic factors. Then, we show that the equilibrium price of a stock is a function of its current dividend, long-run dividend growth, and N risk parameters.     

International Cross‐Listings and Subsequent Security‐Market Choices: Evidence from ADRs

We study the link between the attributes of American depositary receipt (ADR)‐listed firms and their post‐listing security‐market choices. We find that developed market firms are more likely to issue equity and debt than their emerging market counterparts. Furthermore, we find that large firms are more likely to issue debt and less likely to issue equity. When we examine locations where ADR firms raise their capital, we find that firms originating from countries where the protection of minority shareholders is weak are more likely to issue debt on their home markets and less likely to issue debt on international markets (excluding U.S. markets). Furthermore, ADR firms originating from developed (emerging market) countries are more (less) likely to issue their equity on their domestic markets and less (more) likely to issue equity on international markets (excluding U.S. markets).     

Measuring entrepreneurship at the country level: A review and research agenda

The measurement of entrepreneurial activity across national contexts is a relatively recent and under-represented area of study. There was very little research carried out for comparable indicators of entrepreneurship until the end of the 1990s, when the Global Entrepreneurship Monitor Consortium launched its annual surveys. In the last decade, other indexes and databases have been created, such as the EIM COMPENDIA database and the World Bank Group Entrepreneurship Survey dataset. The first objective of this paper is to review and analyse the existing entrepreneurship indexes with respect to their conceptual and methodological dimensions. This review shows that the conceptual foundations of most of the indexes are insufficiently developed. The second objective is to integrate and compare the indexes on 21 Organization for Economic Co-operation and Development countries for which complete data is available. Strong convergence was found between the indicators of venture creation, business ownership and growth, while noticeable divergences were observed between these indicators and those concerning innovation. This was further explored through cluster analysis, which indicated that the 21 sampled countries could be classified into three distinct entrepreneurial profiles. The paper concludes by offering research directions and debating the use of unitary or composite measures of entrepreneurship in comparison to the analysis of multiple dimensions as exemplified in this paper.     

How many karats is gold: Welfare effects of easing a denomination standard

Most consumers benefit from a lowering of the required amount of aurous metal which jewellers must include in products sold as gold. However, profits of producers of gold-plated adornments fall. The net welfare effect depends on whether the principal difference between consumers is their appreciation of the gold content, or their valuation of designation gold or gold-plate.     

Incentives and incomplete information

The problem of incentives for correct revelation in a collective decision model is presented as a game with incomplete information. Two approaches to incomplete information are used, a first where the individual beliefs are not introduced and a second where they are. In the first approach it is recalled that the mechanisms for which the solution to the incentive problem is in dominant strategies lead in general to a budgetary problem for the central agency. For these mechanisms a uniqueness property is demonstrated. In the second approach it is shown that if a compatibility condition is imposed on the individual beliefs and if a Bayesian solution is given to the incentive problem, then it is possible to avoid the budgetary problem.     

Leaving the market or reducing the coverage? A model-based experimental analysis of the demand for insurance

This study develops a theoretical, and experimental analysis addressing the issue of premium variations on the demand for insurance. Accounting for risk attitudes, our contribution disentangles the decision to buy insurance from the conditional demand (the non-null demand for insurance). Partially validating our theoretical predictions, our experimental results show that, when it has an effect, a non-massive increase in the premium (either in the unit price or the fixed cost) exclusively results in an exit from the insurance market (the risk lovers first, then the risk averters). Moreover, our study highlights a key feature of risk-seeking agents' behavior; they exhibit behavior consistent with gambling and opportunism rather than a lack of interest in insurance.     

Convergence of Euro area inflation rates

We study the behavior of inflation rates among the 12 initial Euro countries in order to test whether and when the group convergence initially dictated by the Maastricht treaty and now by the ECB, occurs. We also assess the impact of events such as the advent of the Euro and the 2008 financial crisis. Due to the small size of the estimation sample, we propose a new procedure that increases the power of panel unit root tests when used to study group-wise convergence. Applying this new procedure to Euro area inflation, we find strong and lasting evidence of convergence among the inflation rates soon after the implementation of the Maastricht treaty and a dramatic decrease in the persistence of the differential after the occurrence of the single currency. After the 2008 crisis, Euro area inflation rates follow the ECB's price stability benchmark, although Greece reports relatively higher inflation.     

The lack of loan aversion among Canadian high school students

Evidence is presented on the factors that influence take‐up for postsecondary education financing (loans or grants) for high school students. Results show several factors influence the students' decisions about taking loans or grants but the most prominent influence was the price of educational subsidy. A total of 1,248 high school students across Canada participated. Prices for the grants and loans overlapped substantially in order to more clearly distinguish the impact of loan aversion on the decision to take up financial assistance to pursue PSE. The study featured paid experimental decisions (ranging from $25 to $700 in cash and from $500 to $4,000 in education financing), a numeracy assessment, a student survey and a parental telephone survey. The targeted sample included at‐risk high school students: low SES levels, First Nations and first generation students. Participants were marginally sensitive to the form of financing (grant or loan), with no evidence of systematic loan aversion being detected.     

Political uncertainty and stock market returns: evidence from the 1995 Quebec referendum

Abstract.  In this study, we investigate the short run effect of the 30 October 1995 Quebec referendum on the common stock returns of Quebec firms. Our results show that the uncertainty surrounding the referendum outcome had an impact on stock returns of Quebec firms. We also find that the effect of the referendum varied with the political risk exposure of Quebec firms, that is, the structure of assets and principally the degree of foreign involvement. JEL classification: G14, G15     

R&D personnel and human resource management in multinational companies: between homogenization and differentiation

This paper discusses the impact of globalization processes on models of R&D personnel management in multinational companies operating in Europe. Existing literature focuses on the globalization of R&D activity, on the one hand, and on national systems of innovation, on the other. By contrast, there are few studies of the linkage between the globalization of R&D and its impact on HRM. Drawing on the practices of multinationals in four sectors (pharmaceuticals, chemicals, computer hardware and software), the paper examines whether the hold of national differences in the area of HRM has been significantly weakened in the face of new models of competitiveness and management in multinationals. It focuses on two dimensions: recruitment and mobility. The studies highlight two major trends. The ‘internationalization’ of R&D clearly has effects on HRM models but not as great as might be expected. HRM policies such as recruitment and pay systems continue to be nationally based, reflecting legal and institutional differences. At the same time, in conjunction with new forms of R&D organization such as projects, the standardization of HRM tools may be observed. But this is partial and affects only a limited number of tools, notably individual evaluation.