Equity‐Based Compensation of Outside Directors and Corporate Disclosure Quality

We examine the relationship between a firm's disclosure quality and equity‐based compensation of independent members of the board of directors. The dimensions of disclosure quality we focus on are management's earnings guidance and information flowthrough financial analysts. Using both levels and changes specifications, we find the average ratio of equity‐based pay to total pay of independent board members to be positively related to a firm's disclosure quality. Our findings are robust to the inclusion of management's equity‐based compensation, other governance measures, and financial controls, and robust to instrumental variable tests of endogeneity. Furthermore, we find directors’ equity‐based compensation to be negatively associated with the firm's cost of equity capital. Our results are consistent with equity‐based compensation providing incentives to independent directors to push for better disclosure quality.     

Strategic Manipulation and Information Market Microstructure

This paper presents a model of strategic manipulation in the context of an informational duopoly. The fact that market manipulation by these duopolists may affect their cost and demand structures implies that they can strategically manipulate the market in order to influence the information market equilibrium. This paper derives an equilibrium manipulation and establishes important comparative-static properties that may characterise such markets. The informational duopoly is beset with two types of inefficiency: first, market imperfections drive a wedge between the marginal cost and the market price leading to the usual deadweight loss. Secondly, an act of manipulation raises the marginal cost of production and, thereby, causes further welfare loss in such markets. We provide a complete characterisation of an optimal mechanism that can stem the welfare loss in informational markets.     

Deprivation and Incidence of Urban Public Services: A Tale of Three Cities

We approach the problem of deprivation and incidence of urban public services by quantifying the extent of deprivation of different income groups in relation to both desired and minimum levels. Three types of deprivation are clearly established. First, deprivation in both Bombay and Calcutta is higher than that of Delhi. Second, there is a serious concern for primary health and education because it is established that the lack of these local services is the major source of deprivation among urban settlers. Finally, we report how well different income classes are served in these cities: the rich are worst-off in Calcutta and best-off in Bombay. Middle income and poor citizens are best-off and worst-off in Delhi and Bombay, respectively.     

The nation in heterogeneous time

Following a critique of homogenous time, one that is so central to Benedict Anderson's reading of social history, the paper builds on the notion of heterogeneous time, with particular reference to governmentality, in the narrativization of the nation. The examples of B.R. Ambedkar and the fictional character of Satinath Bhaduri's Dhorai are then brought in to show the continuing tension between the utopian dimension of the homogeneous time of capital and the real space constituted by the heterogeneous time of governmentality and the effects produced by this tension on efforts to narrativize the nation. The paper ends with the claim that it is morally illegitimate to uphold the universalist ideals of nationalism without simultaneously demanding that the politics spawned by governmentality be recognized as an equally legitimate part of the real time-space of the modern political life of the nation.     

Asset specificity,capital intensity and capital structure: An empirical test

Capital investment and capital financing decisions interact. To resolve current controversies in investment-leverage-growth relationships requires an integrated industrial organization/financial economics empirical model of profit margins, capital investment intensity, leverage and risk. Using cumulative future losses in discontinued operations to measure the asset specificity of the firm's investments, empiricai results support a complementary (positive) relationship between debt and investment, the debt financing of verifiable contemporaneous growth, equity financing of future growth and the debt financing of specific assets. This evidence rejects the transactions cost theory of capital structure in Fortune 500 firms.     

RISK-RETURN SEASONALITY AND MACROECONOMIC VARIABLES

In this paper I examine seasonality in the pricing of the Chen, Roll, and Ross (1986) macroeconomic variables. January seasonality is observed in the risk premia from 1932 to 1990. Examination of the 1932–57 period indicates nonstationary seasonals in the risk premia. The results cannot be attributed to the previously documented firm size effect. Residual risk is priced, and a strong January seasonality is observed in the residual risk premia. The market portfolio is not priced in the presence of the other variables. Trading volume is not priced in the individual months, but appears significant when all months are considered together.