How interethnic marriages affect the educational attainment of children: Evidence from a natural experiment

The allocation of Moluccan immigrants across towns and villages at arrival in the Netherlands and the subsequent formation of interethnic marriages resemble a natural experiment. The exogenous variation in marriage formation allows us to estimate the causal effect of interethnic marriages on the educational attainment of children from such marriages. We find that children from Moluccan fathers and native mothers have a higher educational attainment than children from ethnic homogeneous Moluccan couples or children from a Moluccan mother and a native father.     

The impact of diversity and equality management on firm performance: Beyond high performance work systems

This article demonstrates that a diversity and equality management system (DEMS) contributes to firm performance beyond the effects of a traditional high‐performance work system (HPWS), which consists of bundles of work practices and policies used extensively in high‐performing firms. A DEMS typically includes diversity training and monitoring recruitment, pay, and promotion across minority or other disadvantaged groups. Our analysis of quantitative data from service and manufacturing organizations in Ireland confirms that HPWS practices are associated with positive business performance and finds specifically that DEMS practices are positively associated with higher labor productivity and workforce innovation and lower voluntary employee turnover. © 2010 Wiley Periodicals, Inc.     

Testing the CAPM revisited

This paper re-examines the tests of the Sharpe–Lintner Capital Asset Pricing Model (CAPM). The null that the CAPM intercepts are zero is tested for ten size-based stock portfolios and for twenty five book-to-market sorted portfolios using five-year, ten-year and longer sub-periods during 1965–2004. The paper shows that the evidence for rejecting the CAPM on statistical grounds is weaker than the consensus view suggests, and highlights the pitfalls of testing multiple hypotheses with the conventional heteroskedasticity and autocorrelation robust (HAR) test with asymptotic P-values. The conventional test rejects the null for almost all sub-periods, which is consistent with the evidence in the literature. By contrast, the null is not rejected for most of the sub-periods by the new HAR tests developed by Kiefer et al. (2000), Kiefer and Vogelsang (2005), and Sun et al. (2008).     

Acquisitions in the biopharmaceutical IPO market: Collaboration,competition and co‐opetition

The present paper explores the little studied area concerning the acquisition of recent biopharmaceutical initial public offering firms. We examine the nature of the relationship between the acquiring firm and the acquired initial public offering firm prior to the acquisition and from the perspective of the resource‐based view. We find to some extent that firm specific‐resources affect the prospect that the firm will be acquired. Furthermore, our findings show that firms with more of these types of resources are likely to be acquired by firms engaged in co‐opetition rather than by firms engaged solely in collaboration, competition, or (to a limited extent) with no prior relationship.     

Asset pricing under quantile utility maximization

“Focus on the downside, and the upside will take care of itself” is a famous quote among professional investors. By considering an agent who follows this advice, we reproduce the first and second moments of stock returns, risk-free rate and consumption growth. The agent's behavior toward risk is analogous to a relative risk aversion of about 3 under expected utility, the elasticity of intertemporal substitution is about 0.5 and the time discount factor is below 1. In particular, the proposed model separates time and risk preferences in an innovative way.     

The broadband bonus: Estimating broadband Internet's economic value

How much economic value did broadband Internet create? Despite the importance of this question for national policy, no research has estimated broadband's incremental contribution to U.S. GDP by calibrating against historical adoption and incorporating counterfactuals. This study provides benchmark estimates for 1999 through 2006 and finds that broadband accounts for $28 billion of the $39 billion observed in 2006. Depending on the estimate, households generated $20-$22 billion of broadband revenue and approximately $8.3-$10.6 billion was additional revenue created between 1999 and 2006. Consumer surplus accounted for $4.8-$6.7 billion of this amount, which is not measured in GDP. An Internet-access Consumer Price Index would have to decline by 1.6-2.2% per year for it to reflect this unmeasured value. These estimates differ from existing benchmarks by an order of magnitude and relate to several policy debates.     

Accounting-based regulation in emerging markets: The case of China's seasoned-equity offerings

In China, listed companies are required to achieve a minimum return on equity (ROE) before they can apply for permission to issue additional shares through seasoned-equity offerings (SEO). We document two benefits of this accounting-based regulation in China. First, this regulation limits the increase in the supply of shares and the dilution of existing share prices. The Chinese stock market reacted positively to the announcement of this accounting-based regulation. Moreover, investors' reactions to SEO, announcements are less negative since the accounting-based regulation was introduced than before the regulation was enacted. The second benefit is that the regulation reduces adverse selection in SEO, as shown by the finding that prior to this regulation, firms below the ROE threshold underperformed the market after their SEO, much like what has been observed in other markets; while those above the threshold outperformed the market. Thus, although positive accounting theory predicts that regulations based on accounting numbers create incentives for managers to manipulate their accounting numbers, accounting-based regulations in China seem to serve some useful purposes.