The Global Financial Crisis and Stock Market Reaction to Bank Loan Announcements

This study investigates how equity investors react to bank loan announcements in China using an event study methodology. By estimating the average Cumulative Abnormal Returns (CARs) over the event period and controlling for the impact of other factors such as borrower, lender and loan characteristics, we find that the overall reaction is negative. However, the results for the two sub-sample periods are different. After the onset of the Global Financial Crisis, the average CARs are no longer statistically different from zero, indicating higher lending standards and improvement in the quality of credit analysis of Chinese banks.     

The effect of social dynamics in online review voting behavior

This study extends the unidimensional view of review helpfulness into a bidimensional one by conceptualizing review helpfulness and unhelpfulness as two distinct constructs, and draws on the lens of social learning theory to examine the effects of review helpfulness and unhelpfulness on subsequent voting behavior. We innovatively adopt the latent change score modeling to analyze a longitudinal review dataset from Amazon. com. Our empirical results indicate that prior helpfulness of a review will be positively related to its subsequent increase in helpfulness and unhelpfulness, while prior unhelpfulness of a review will be negatively related to its subsequent increase in helpfulness and unhelpfulness. The results also indicate that, at the aggregate level, the increases in review helpfulness and unhelpfulness decelerate over time. This research contributes to the literature by unravelling the dynamic reciprocal relationship between review helpfulness and unhelpfulness and sheds light on the design of review voting systems.     

On the Closeness Aspect of Three Voting Rules: Borda – Copeland – Maximin

This paper provides a comparison of three voting rules, the Borda rule, the Copeland rule and the maximin rule. Our analysis based on the rankings derived from those voting rules will shed new light on existing comparisons based on “closeness” between the three voting rules under investigation. In particular it will be shown that both, the rankings derived from the Borda rule and the maximin rule and the rankings derived from the Copeland rule and the maximin rule, will be exactly the opposite for certain preference profiles.     

A Note on the Probability of Having a Strong Condorcet Winner

In an election, a strong Condorcet winner is a candidate who is top-ranked by more than 50% of the voters. The purpose of this note is to provide some algebraic representations for the probability of having a strong Condorcet winner in three-candidate elections. Three alternative procedures for generating voting situations are considered: the Impartial Culture condition, the Impartial Anonymous Culture condition and the Maximal Culture condition. It turns out that the conclusions we obtain strongly depend on the way for generating voting situations.     

Similarly traded securities: Greek common vs. preferred stock

This paper examines the price spread between voting (common) and non‐voting (preferred) stocks during the period 1990–95 for a sample of 55 Greek companies. Because in Greece preferred stocks are not essentially different from common stocks, a number of hypotheses were tested to explain the observed differences. The data reveal an average spread of 27.5% for the entire period which, however, varies across years considerably. In cross‐sectional regressions it was found that the volatility of common stock returns, the liquidity of common shares relative to preferred shares, the ownership concentration, and the minimum dividend yield guaranteed to preferred stockholders explain a significant portion of the spread.     

Influence Allocation Methods in Group Decision Support Systems

Influence allocation processes are voting and opinion aggregating methods that allow members to distribute some or all of their decision making influence to others in the group in order to exploit not only the group's knowledge of the alternatives, but its knowledge of itself. Only with the common use of group decision support systems (GDSS) has their use become practical. In this paper we reconsider SPAN, an influence allocation process introduced by MacKinnon (1966a). Experimental comparison shows SPAN to be significantly better at selecting a correct option from a set of options than two common voting methods. An alternative influence allocation process that we call RCON (Rational Consensus), is based on a weighting method proposed by DeGroot (1974) and has been explicated as a normative standard for combining opinion by Lehrer and Wagner (1981). The judgmental inputs to SPAN would appear to be logically related to those for RCON. Submitting the SPAN inputs from the experiment, transformed in this logical way, to the RCON process results in somewhat better performance than with SPAN. However, evidence indicated that the two methods are conceptually and psychologically sufficiently different that an experimental comparison is needed between them.     

Measuring voting power in an international institution: the United States and the inter-American development bank

This paper applies a measure of relative voting power to the weighted voting system of the Inter-American Development Bank (IADB). Almost all assessments of internal governance of the IADB and other international financial institutions make reference to members' votes as a proxy for relative influence. But as this paper demonstrates, voting weights are misleading. The number of votes a country has in a weighted voting system does not necessarily denote its ability to affect outcomes. The conventional wisdom holds that the United States is omnipotent in the IADB because it has a large number (over 30 percent) of all the votes. This paper reveals that the U.S. obtains much more control over outcomes than originally intended by the institutions' designers. Received: September 2000 / Accepted: October 2001     

Compensation of owner managers in Canadian family‐owned businesses: expropriation of minority shareholders

The aim of this paper is to test the hypothesis of owner managers expropriating minority shareholders by receiving excessive compensation. Using a sample of Canadian family firms, we found that when there is divergence between voting rights and cash flow rights, owner CEOs receive higher compensation than non‐owners. The higher the divergence between voting rights and cash flow rights, the higher the excess compensation. Further analysis shows that only poorly governed firms are affected by the expropriation problem. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

ERRATUM TO “BEHAVIORAL PORTFOLIO SELECTION IN CONTINUOUS TIME”

We fill a gap in the proof of a (rather critical) lemma, Lemma B.1, in Jin and Zhou (2008: Math. Finance 18, 385–426). We also correct a couple of other minor errors in the same paper.     

Leadership in agricultural machinery circles: experimental evidence from Tajikistan

Leadership is critical for the viability of rural groups. The way in which leadership is legitimised can mediate leader and group member behaviour in the face of social dilemmas. Yet there has been scant research on leader‐follower dynamics in naturally occurring groups. Highlighting the case of agricultural machinery circles in Tajikistan, the effect of leading by example on investments to a collective good is studied in a framed field experiment. To increase realism, and contrary to standard economic experiments, this investment is a voucher allowing the group to make a real‐world machinery purchase at reduced costs. Two treatments manipulate leaders’ legitimisation. Elected leaders achieve 30 per cent higher contributions to the collective investment against a baseline version without a leader. Contributions remain, on average, relatively stable over the course of the game. The results are discussed with reference to the debate on external intervention in agricultural producer organisations.