A note on assessing the relation between CEO characteristics and stock performance: Alpha Above Replacement

Many studies examine the relation between stock performance and CEO characteristics. We approach the topic in a different way, using the alphas generated by the Fama‐French three‐factor model as the dependent variable in a CEO characteristic model. We find several traits are significantly related to alpha. CEOs who are younger, own a larger fraction of firm equity and hold a graduate degree provide greater alphas. CEOs who are also the founder of the firm deliver larger alphas. Our results provide useful information for boards assessing the performance of CEOs and considering CEO succession.     

Why (not) cooperate? A cognitive model of farmers’ intention to join producer groups in Romania

After the breakdown of the communist regime in Romania, collective farms were replaced by a large number of small-scale private farms. Although cooperation seems to be a favourable choice for these smallholders, it did not develop as perhaps expected. This article explores the factors that determine the formation of the intention of Romanian vegetable farmers to join marketing cooperatives in the form of so called producer groups. Our theoretical framework refers to Ajzen’s Theory of Planned Behaviour, which we model with a structural equation model. We identified as main intention drivers the expectation for better prices and easier access to capital. Perceived family support is another significant factor. The level of distrust is high. Although our trust variable is not significant as a predictor of the intention to cooperate in the model, we find qualitative indications that trust plays a role when the intention is translated into actual behaviour.     

House Prices,Wealth and Consumption: New Evidence from Australia and Canada

Over the past two decades, a number of countries have experienced appreciation in house prices at the same time that aggregate consumption has increased. This paper tests alternative hypotheses for this phenomenon by using repeated household surveys from Australia and Canada to identify the transmission mechanism that links consumption and household wealth. The empirical analysis suggests that neither a direct wealth effect nor a common causal factor likely accounts for the observed correlation between wealth and consumption in these two countries. Rather, indirect factors such as collateral effects arising from relaxation of credit constraints are a more likely explanation.     

On the Incentive Effects of Sample Size in Monitoring Agents – A Theoretical and Experimental Analysis

When agents compete for a bonus and their productivity in each of several possible occasions depends stochastically on (constant) effort, the number of times this is checked to assign the bonus affects the level of uncertainty in the selection process. Uncertainty, in turn, is expected to increase the effort made by competing agents (Cowen and Glazer, 1996; Dubey and Haimanko, 2003; Dubey and Wu, 2001). Theoretical predictions are derived and experimental evidence is collected for two competing agents, with the bonus awarded to that agent who outperforms the other. Sampling occasions (1 or 3), cost of production (high or low), cost symmetry (asymmetric or symmetric), and piece‐rate reward are manipulated factorially to test the robustness of the effects of uncertainty. For control, a single‐agent case is included. Results indicate that, for tournaments, greater uncertainty does indeed lead to greater than expected effort and lower average variable costs.     

Does trade liberalization harm the environment? A new test

Some believe that relatively lenient environmental standards give developing countries a comparative advantage in pollution–intensive goods. Thus, freer trade will harm their environment. This paper brings together the literature on openness and growth, and on the environmental Kuznet’s curve, to demonstrate that the opposite may be true. A simultaneous–equations system is derived which incorporates multiple effects of trade liberalization on the environment. Estimation using pooled provincial data on Chinese water pollution, suggests that freer trade aggravates environmental damage via the terms of trade, but mitigates it via income growth. Simulations suggest that the net effect in China was beneficial. JEL Classification: Fl3, Q28, 0l9 Est–ce que la libéralisation du commerce est nuisible pour l’environnement? Un nouveau test. Certains croient que des normes environnementales relativement peu contraignantes donnent un avantage comparatif aux pays en voie de développement dans la production de biens qui polluent intensivement. Donc, un commerce plus libre contribuera à nuire à l’environnement. Ce mémoire synthétise la littérature spécialisée sur l’ouverture des marchés et la croissance, ainsi que sur la courbe de Kuznets, pour montrer que l’inverse est vrai. On dérive un système d’équations simultanées qui incorpore les multiples effets de la libéralisation du commerce sur l’environnement. La calibration de ce système, en utilisant de manière intégrée les données provinciales de pollution de l’eau en Chine, suggère qu’un commerce plus libre aggrave l’état de l’environnement par le truchement du jeu des termes d’échange, mais que cet effet est mitigé par l’effet de croissance des revenus. Des simulations suggèrent que l’effet net en Chine est positif.     

How useful are signals? A micro-structure analysis

We analyze how the market processes a signaling event by studying a sample of self-tender offers, events often viewed as signals of firm value. By examining changes in the degree of informed trading, we find asymmetric information costs fall at announcement, remain low throughout the event, and increase at offer expiration. By one month following expiration, informed trading returns to a level not significantly different from that prior to the offer. Higher risk firms have significantly larger declines in information asymmetry during the offer. Increases in information asymmetry persist one month following expiration for firms with lower pre-offer informed trading. (JEL G14, G32)     

Wenn der Bauch über den Kopf entscheidet

So schwer ist Therapietreue — Menschen, bei denen eine der typischen Volkskrankheiten diagnostiziert wurde, tun sich schwer, Verhaltensweisen zu entwickeln, zu denen ihr Arzt (und auch ihre Vernunft) ihnen r?t. Ern?hrungsregeln, wie sie beispielsweise Diabetikern empfohlen werden, werden entweder nur in Ausnahmef?llen eingehalten oder in stark abgeschw?chter Form. Aber warum ist das so?     

Children aged 9-14 living in disadvantaged areas in England: Opportunities and barriers for cycling

The aim of this paper is to take a holistic perspective to explore levels of cycling and opportunities and barriers to increase children’s safer cycling in disadvantaged areas in England. The study was one part of a larger study which explored the factors underlying the high level of road traffic casualties especially among children in the most disadvantaged areas of England and to explore how this impacts on mobility and quality of life. The methods involved a cross sectional survey comprising school based questionnaire surveys with children aged 9-14 and focus groups with parents who had children within this age range. The surveys were conducted in 2007 and the focus groups during 2008. 4286 children completed the survey and eight focus groups were held. Bike ownership (77%) was high, use in previous week moderate (39%) but only 2% cycled to school. Ownership was significantly lower in minority ethnic groups. Despite young children’s strong preference to travel by cycle (30%) than walk or go by car, most parents felt it was too hazardous. It is unlikely that these findings would be any different from the rest of England, however the combination of environmental and social factors may elevate the risks for young cyclists in these areas. This paper concludes that a number of barriers exist to increasing levels of cycling among children living in disadvantaged areas particularly amongst ethnic groups. These barriers could be addressed by environmental modifications to reduce speeds and by reducing the levels of antisocial driving and riding in residential areas and around destinations where children travel, by providing cycle training to improve children’s skills and parent’s confidence, and by providing secure storage facilities for bikes. Until these barriers are addressed it is unlikely that cycling will increase despite the strong preferences children have to travel by bike. Such preferences to cycle provide an opportunity for local authorities to act on.