Information Opacity,Credit Risk,and the Design of Loan Contracts for Private Firms

This paper examines the structure and cost of a large sample of bank loans to private firms. Compared to public firms, private firms are more informationally opaque and riskier. The results suggest that the design of a loan to a private firm is significantly different from that to a public firm. Bank loans to private firms are more likely to be by a sole lender, collateralized, and have sweep covenants than loans to public firms. The cost of borrowing is higher for a private firm than for a public firm, even after holding constant firm and loan characteristics.     

Controlling nitrate pollution: An integrated approach

The introduction of the EU Water Framework Directive requires policy to address non-point source pollution as part of an overall integrated strategy to improve the ecological status of water bodies. In this paper, we combine an economic optimisation framework with a dynamic simulation model of N transport in the Kennet Catchment to link decisions taken at the farm level to reductions in nitrate concentrations in the River Kennet. We examine a variety of policies targeted at reducing fertiliser use and changing the way in which farm land is used. We find that a tax on nitrogen emerges as the best policy both in terms of cost- and environmental effectiveness. Such a policy involves a considerable reduction in fertiliser use, as well as, a restructuring of land-use away from arable towards increased use of set-aside. Budgetary implications of such a radical move towards set-aside would be huge and hence unlikely to be politically palatable given the objective of reducing the EU budgetary allocation to agriculture. Additionally, the current rise in world demand for food may also mitigate calls for increasing the proportion of land taken out of agricultural production. Although the study succeeds in establishing a link between actions on the farm and nitrate concentrations in the stream water, further work is required to explore the effect of the retention of nitrates in the unsaturated zone and groundwater on this link.     

工作郁闷的三座大山

管理层的本质就是让人们去做自己不愿意做的事情。所以改善下属的生活即使不是完全不可能，也是相当困难的。     

年度商业废话奖

每年的大约这个时候,我都会对来年进行预测.每年的预测都相同,但结果都不准.……     

Jealous Monopolists? British Banks and Responses to the Macmillan Gap during the 1930s

By the end of World War I successive merger waves had producedan oligopolistic, tightly cartelized, English banking system,which was widely viewed as having restricted lending to small-medium-sizedfirms—the famous ‘Macmillan Gap’ in industrialfinance. We explore the reasons behind the failure of marketentry to bridge this gap. The clearing banks are shown to haveacted as ‘jealous monopolists’, obstructing theactivities of the Credit for Industry Ltd (CFI), the only significantfirm established to breach the gap (rather than narrow its upperlimit). By poaching many clients it had vetted and approved,the banks blocked CFI's growth, deterring further market entry,and thus, preserving their monopoly position.     

An Experimental Investigation of Asset Pricing in Segmented Markets

This article reports the results of experimental asset markets in which participants trade two assets with distinct dividend claims. Some traders are able to transact in the markets for both assets, whereas others can trade in only one market. When some are restricted from transacting in one market, the ineligible asset that cannot be traded by all commands a super risk premium. Without this premium, unrestricted investors would not hold all the available shares of the ineligible asset. In addition, we find that although unrestricted traders have the opportunity to remove all risk, few take advantage of this hedging opportunity.     

INCORPORATION OF TAX CONSIDERATIONS INTO THE COMPUTATION OF DURATION

In this paper, the immunization process is extended to protect after-tax income, and the duration indices for after-tax immunization are derived. Selection of the appropriate index depends on individual investor differences in tax regulations. Attention is focused on the mutually exclusive decisions to amortize or not to amortize premia or discounts.