COMMENTS CONCERNING “ON THE PARK-THUESEN INDEX AND THE VALUE OF EARLIER UNCERTAINTY RESOLUTION”

Surveys find that the majority of firms utilize credit limits. However, most trade-credit models show a dichotomous result: either credit is granted or it is refused. In this paper, a single-period model of the trade credit-granting decision is developed which incorporates the portfolio effects of credit granting on the seller's cash inflows and therefore on its probability of cash stockout. In this model, the credit limit serves as a mechanism to control these portfolio effects and thus hedge against such stockouts.     

Relationship between Organizational Change and Failure in the Wine Industry: An Event History Analysis

Whether organizational change is adaptive or disruptive has been an issue among organization researchers. This paper examines the effect of organizational change on organizational failure and compares the result to previous findings. To increase comparability, we replicated Delacroix and Swaminathan’s (1991) format of the California wine industry study using Missouri wine industry data. Event history analysis is used to cover time-varying variables and censoring problems. Following an organizational ecology perspective, our result supports the finding that organizational change is not related to organizational failure     

The effects of the external debts of Mexico,Brazil, Argentina,Venezuela, and the Philippines on the United States

The external debts of developing countries have become a major issue recently, prompting debate among both academicians and policy markers. In this paper, the author describes the origins and history of debt problem, summarizes proposals for policies for creditor nations, and estimates the effects of debt-related austerity in five major debtor nations on US imports, exports, net exports, and output in 1985. He concludes that debt-related austerity was responsible for 11.0% of the US merchandise trade deficit in that year, caused decreases in US net trade in 40 to 61 non-service industries studied and decreases in output in 46 industries, and caused a decrease of 0.5% in GNP.

Neither a borrower nor a lender be;

For loan oft loses both itself and friend,

And borrowing dulls the edge of husbandry.

William Shakespeare (Hamlet, I. iii. 75)     

Behavioural Finance and Investor Protection Regulations

The article deals with behavioural assumptions in legal norms, in particular with regard to investor protection norms in Europe and Germany as well as court rulings. Whereas traditional legal norms are based on the assumption of rationale behaviour, the financials crisis has demonstrated the pitfalls of the classical notions of economics, thus leading to new insights of behavioural economics. However, it is still unclear how behavioural economics may serve as a means to improve legal protection of investors. Neither a strong paternalism nor a simple extension of information obligation may suffice in the future.