The Vote Is Cast: The Effect of Corporate Governance on Shareholder Value

This paper investigates whether improvements in the firm's internal corporate governance create value for shareholders. We analyze the market reaction to governance proposals that pass or fail by a small margin of votes in annual meetings. This provides a clean causal estimate that deals with the endogeneity of internal governance rules. We find that passing a proposal leads to significant positive abnormal returns. Adopting one governance proposal increases shareholder value by 2.8%. The market reaction is larger in firms with more antitakeover provisions, higher institutional ownership, and stronger investor activism for proposals sponsored by institutions. In addition, we find that acquisitions and capital expenditures decline and long‐term performance improves.     

Measurement Bias in the HICP: What do we know and What do we need to know?

Abstract. The Harmonized Index of Consumer Prices (HICP) is the primary measure of inflation in the euro area, and plays a central role in the policy deliberations of the European Central Bank (ECB). The ECB defines its Treaty mandate of price stability as '… a year‐on‐year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%[…] to be maintained over the medium term.' Among the rationales given for defining price stability as prevailing at some positive measured inflation rate is the possibility that the HICP as published incorporates measurement errors of one sort or another that may cause it to systematically overstate the true rate of inflation in the euro area. This paper reviews what currently is known about the scope of measurement error in the HICP. We conclude that given the vague conceptual framework of the HICP, the scant research on price measurement issues in the EU and the ongoing improvements in the HICP, there is very little scientific basis at this time for a point (or even an interval) estimate of a positive bias in the HICP.     

A chance-constrained multiobjective model for mental health services planning.

Mental health services planning, and particularly the planning for deinstitutionalization, is a very complex problem. This paper suggests a chance-constrained goal programming (CCGP) approach to mental health services planning. The CCGP approach is based on the sequential solution of a linear programming formulation, allowing efficient solution of large-scale planning problems using commercially available linear programming computer codes. The procedure is demonstrated with a case example and implementation of the approach is discussed.     

Participatory and incremental development in an African local government accounting reform

Despite significant donor funding, government accounting reforms seeking transparent and effective management of public resources often fail or have limited success, especially in Africa, prompting questions about donors’ implementation approach and calls for studies of successful reforms. This paper investigates a local government accounting reform in Benin supported by a German development agency–perceived as successful due to the participatory, pragmatic, and incremental approach reinforced by conditionalities in the face of neo‐patrimonial leadership.     

The European Banking Market - Post-1992

Though moves towards establishing a single European market in 1992 have received much attention, nevertheless the reality is that the European financial market will continue to evolve in response to these developments well into the next decade.This article examines possible scenarios for the )inuncial services industry suggesting there is a need for financial institutions to develop corporate plans for the single market well in advance of 1992.     

Profitability and Employment in United Kingdom Financial Services 1971–1981

The article examines changes in employment and profits in the UK financial services sector between 1971 and 1981. The conclusions are that, despite the severe recession, both indicators have risen — employment by just under 30 per cent, and profits by around 15 per cent. What is even more significant is that in every single region of Great Britain there has been an increase in service employment so that there are now more people employed in services in every region than in all other categories put together. This fact, it is felt, is not fully appreciated.     

Keynote Speech: Federal Reserve Policy in the Post-Crisis Period

The Federal Open Market Committee (FOMC) engaged in a series of extraordinary monetary policy actions in the wake of the Global Financial Crisis of 2007–2008 to support economic activity in the United States. Interest rates were lowered to their effective lower bound and the Fed’s balance sheet was greatly expanded through a series of large-scale asset purchase programs. As the U.S. economy has recovered, “normalization” of monetary policy (which will be data-dependent) has drawn closer. This article reviews some factors that may impact the post-normalization course of monetary policy.     

America's New Era

In this article, Wynne Godley and Bill Martin examine the growing imbalances in the American economy and the threat they pose to continued growth. They argue that America's expansion has been, and, on present policies, will continue to be overly reliant on a rising stock market and falling private net saving. This process is unsustainable. Other countries which have experienced asset price bubbles and abnormally low and falling private saving have all been severely damaged when the process unwound with net savings rising back to and then above their historic norm. Faced with that type of shock, the same fate could easily await the United States unless its policy toward the dollar and the budget responded in a quite remarkable fashion.     

An empirical analysis of factors affecting the growth of small-scale poultry enterprises in KwaZulu-Natal

Small-scale commercial poultry enterprises are often promoted and used by the government and non-governmental organisations in development projects to generate income and to improve food self-sufficiency and alleviate malnutrition, as poultry is an excellent source of protein. This study shows that the majority of small-scale commercial poultry producers in KwaZulu-Natal come from previously disadvantaged communities and have significantly lower enterprise growth rates than larger poultry producers. The results of a block-recursive regression analysis of data gathered from a sample of 123 poultry farmers in the province indicate that enterprise growth rate is constrained by poor access to credit, high transaction costs and unreliable local markets. Government policies should focus on reducing transaction costs by improving education and physical infrastructure, sponsoring training and mentoring services for small-scale commercial poultry producers, and helping these emerging entrepreneurs to formalise the business institutions needed to manage co-owned resources and to market products collectively.