The measure of blocking coalitions in differential information economies

We provide an evaluation of the measure of privately blocking coalitions in differential information economies. In the case of atomless economies, it is proved that for a Pareto optimal allocation that is not a Walrasian expectations equilibrium, to any symmetric profile there corresponds a ball such that "almost half” of the profiles it contains are privately blocking. Analogous results are proved in the case of finite differential information economies for generalized coalitions and social coalition structures. From a different point of view, the paper can be considered as a contribution showing private core equivalence theorems under restrictions on coalition formation. We thank an anonymous referee for observations and comments improving an earlier version of the present paper.     

The logic behind foreign market selection: Objective distance dimensions vs. strategic objectives and psychic distance

The aim of this paper is to highlight the importance of the firm’s strategic objectives regarding the choice of countries for foreign expansion, complementing the existing literature on the internationalisation process. Through a multiple case study methodology, we conduct a comparative analysis of three Brazilian ventures that have internationalised in Italy, and three Italian firms that have internationalised in Brazil, seeking to investigate the firms’ decisions on the selection of foreign markets. We consider jointly the objective aspects of distance, the overall perceptions of the decision-makers in relation to the differences between the domestic and (potential) host countries, and the firm’s strategic objectives. This research contributes to International Business studies by revealing the role of firm-specific strategic objectives as determinants of foreign market selection, in addition to, or even on top of, the dimensions of objective distance and psychic distance.     

Time and Risk Diversification in Real Estate Investments: Assessing the Ex Post Economic Value

Welfare gains to long-horizon investors may derive from time diversification that exploits nonzero intertemporal return correlations associated with predictable returns. Real estate may thus become more desirable if its returns are negatively serially correlated. While it could be important for long-horizon investors, time diversification has been mostly investigated in asset menus without real estate and focusing on in-sample experiments. This article evaluates, ex post, the out-of-sample gains from diversification when equity real estate investment trusts (REITs) belong to the investment opportunity set. We find that diversification into REITs increases both the Sharpe ratio and the certainty equivalent of wealth for all investment horizons and for both classical and Bayesian (who account for parameter uncertainty) investors. The increases in Sharpe ratios are often statistically significant. However, the out-of-sample average Sharpe ratio and realized expected utility of long-horizon portfolios are frequently lower than that of a one-period portfolio, which casts doubt on the value of time diversification.     

Coordination and Information in Critical Mass Games: An Experimental Study

We present experimental results on a repeated coordination game with Pareto-ranked equilibria in which a payoff from choosing an action is positive only if a critical mass of players choose that action. We design a baseline version of the game in which payoffs remain constant for values above the critical mass, and an increasing returns version in which payoffs keep increasing for values above the critical mass. We test the predictive power of security and payoff-dominance under different information treatments. Our results show that convergence to the payoff-dominant equilibrium is the modal limit outcome when players have full information about others' previous round choices, while this outcome never occurs in the remaining treatments. The paths of play in some groups reveal a tacit dynamic coordination by which groups converge to the efficient equilibrium in a step-like manner. Moreover, the frequency and speed of convergence to the payoff-dominant equilibrium are higher, ceteris paribus, when increasing returns are present. Finally, successful coordination seems to crucially depend on players' willingness to signal to others the choice of the action supporting the efficient equilibrium.     

Environmental and Social Matters in Mandatory Corporate Reporting: An Academic Note

This note provides an overview of mandatory corporate reporting for environmental and social matters in Canada, the United States and the EU. When researchers and educators consider reporting on these matters, they often look to voluntary corporate reporting. However, we argue that a lot of related information exists in companies’ mandatory reports, either in the disclosures dictated by securities regulators, or via other required channels. Our objective is threefold. First, to describe what currently exists regarding mandatory reporting on environmental and social matters (to inform). Second, to discuss several of the current ongoing debates regarding such reporting (to encourage discourse). Third, to encourage research into the mandatory reporting of environmental and social matters.     

ARV Treatment and Time Allocation to Household Tasks: Evidence from Kenya

Using longitudinal survey data collected over a period of two years, this paper examines the impact of antiretroviral (ARV) treatment on the time allocated to various household tasks by treated HIV-positive patients and their household members. We study outcomes such as time devoted to housework, firewood and water collection, as well as care-giving and care-seeking. As treatment improves the health and productivity of patients, we find that female patients in particular are able to increase the amount of time they devote to water and firewood collection. This increased productivity of patients coupled with large decreases in the amount of time they spend seeking medical care leads to a reduced burden on children and other household members. We find evidence that boys and girls in treated patients' households devote less time to housework and other chores. These results suggest that the provision of ARV treatment generates a wide variety of benefits to households in resource-poor settings.     

A trade-off theory of ownership and capital structure

This paper determines the optimal ownership share held by a unit into a second unit when both face a tax-bankruptcy trade-off. Full ownership is optimal when the first unit has positive debt, because dividends help avoid its default. Positive debt is, in turn, optimal when its corporate tax rate exceeds a threshold, and/or thin capitalization rules place an upper limit on the debt level in the second unit, and/or the Volcker Rule bans bailout transfers to the second unit. Full ownership is no longer optimal only if there is a tax on intercorporate dividend. This theory rationalizes observations on multinationals, financial conglomerates, and family groups.     

The Role of Critical Evaluation in Finance Education: Insights from an MSc Programme

This paper explores how prepared MSc in Finance students at a British university were for a research-based dissertation; how much they knew about independent research prior to starting the dissertation; and how the university assisted them during this research work. Three changes were carried out within the programme with the aim of immersing students in research practices. Students were provided with the opportunity to discuss and evaluate critically the methodologies and findings of real research studies in Finance. Thus, the study provides practical suggestions on how to support the students' experience of dissertation work. Furthermore, this paper contributes to the literature on what constitutes research in Finance and on how students can learn about standards of academic validation, by offering a subject-specific perspective on information literacy.     

Vertical disintegration and training: evidence from a matched employer–employee survey

The mechanism through which outsourcing favourably impacts on workplace performance, particularly productivity, is still unclear. I explore the hypothesis that it does so by impacting workers?? training. I use AWIRS-1995, a matched employer?Cemployee survey that reports ample information on the extent of technology and organizational change in Australian workplaces. I find that there is a positive and significant impact of outsourcing on training when I do not control for the correlation between ununobservable factors in these two binary outcomes. However, once I control for this correlation using a bivariate probit estimator, the training impact of outsourcing becomes negative. I then assess the sensitivity of the outsourcing effect to endogeneity by using the method advocated by Altonji et?al. (J Polit Econ 113(1):151?C184, 2005) to find that this latter result persists even in the presence of a low correlation between unobservables.