Equity‐Based Compensation for Employees: Firm Performance and Determinants

I examine the effect of employee equity‐based compensation (EBC) on firm performance and the determinants of EBC. Using two samples, I find that firms have come to rely more heavily on EBC than in the past. For both samples, I document a significant, positive relation between Tobin's q and the percentage of employee compensation that is equity based. For accounting returns, I find a positive relation with the earlier sample. However, for the later sample I find that greater use of EBC leads to lower levels of future accounting returns. I also find that the determinants of the proportion of EBC are different between the two samples.     

Fiscal Decentralisation and Economic Growth in High‐Income OECD Countries

Among the majority of high–income OECD countries, the degree of fiscal decentralisation has converged over the last 30 years towards an intermediate level. The theoretical arguments for and against fiscal decentralisation point to explanations for this tendency, because both extreme decentralisation and extreme centralisation are associated with disadvantages for economic growth. Hence, the observed trend of convergence would be growth–promoting. The paper analyses the long–run empirical relationship between per capita economic growth, capital formation and total factor productivity growth, and fiscal decentralisation for the high–income OECD countries. The evidence supports the view that the relationship is positive when fiscal decentralisation is increasing from low levels, but then reaches a peak and turns negative. A policy implication is that policy–makers in several countries with relatively low degrees of fiscal decentralisation could possibly mobilise growth reserves by increasing it.     

Moore's Law and the Semiconductor Industry: A Vintage Model*

In this paper we develop a vintage model to gain a better understanding of the semiconductor industry and its role in recent U.S. productivity gains. Unlike previous work, in our model the observed price declines of individual chips are driven by the introduction of better vintages rather than by learning economies. Dominated chips, nonetheless, continue to be produced, for a time, due to sunk investments in chip‐specific production equipment. The model lends partial support to Jorgenson's hypothesis that an exogenous increase in Moore's Law could have generated the more rapid price declines, and faster productivity growth, seen after 1995.     

Are Venture Capitalists a Catalyst for Innovation?

In this paper we test two hypotheses concerning the presence of innovation in venture capital investments and the growth of innovative venture backed firms. To examine these hypotheses we considered sample of 37 Italian venture backed firms that went public on the Italian Stock Exchange between 1995 and 2004 and by a statistical matching procedure we picked 37 twin firms among the non‐venture backed IPOs for the same period. Our evidence shows that innovation is an important factor during the selection phase but once the investment is made, the company does not promote continued innovation and concentrates all efforts to improve other economic and managerial aspects.     

What motivates a subprime borrower to default?

This paper uses a real options approach to analyse the exercise of the default option embedded in mortgages. In particular, it examines a subprime household who borrows at a premium, but hopes to refinance at prime rates if their house appreciates. We show how these optimal default decisions can be used to calculate probabilities of default – an important input for risk management and pricing purposes. Numerical examples are provided, calibrated to US data. In a low interest rate environment, the credit-upgrade potential may discourage subprime borrowers from defaulting. However, default probabilities are highly sensitive to changes in interest rates and house prices. This provides a rational explanation for the prevalence of adjustable rate mortgages among subprime borrowers, and the subsequent large numbers of defaults, when interest rates rose and house prices declined.     

Strategic participation and the median voter result

In a seminal paper on electoral equilibrium under majority rule, Ledyard (1984) demonstrates that strategic participation by voters results in an electoral equilibrium at the proposal that maximizes the utility of a randomly selected voter. Palfrey and Rosenthal (1985) limit the usefulness of this result by showing that strategic participation rates are miniscule in large electorates, and that the incentive to participate vanishes completely as the electorate grows without bound. The most reasonable modification of Ledyard’s approach that circumvents these criticisms is to allow for a negative cost of voting. We show that when voters can have even an arbitrarily small negative cost of voting, there is an electorate sufficiently large so that any proposal is defeated or tied by the median proposal. This observation raises questions about the existence of electoral equilibrium under strategic participation, and is relevant to the efficiency of elections.     

Valuing the Option to Purchase an Asset at a Proportional Discount

I analyze the value of a nonstandard call option that allows the holder to purchase an underlying asset at a discount proportional to the asset's market price. Several applications for this type of option exist, including its use in employee compensation contracts. I derive the value of this option for a dividend-paying asset and for an option whose exercise price reflects a time-varying discount factor. The derived value incorporates the optimal time at which the option should be exercised. One application of this option relates to a residential real estate program in China.     

供应链是价值链的一种表现形式

先介绍了企业关系的演变和发展 ,概述了供应链/价值链产生和发展的背景、供应链/价值链研究的发展。然后从哲学的角度深入分析供应链/价值链之间的关系和区别 ,首次得出“供应链是价值链的一种表现形式 ,两者是内容和形式的哲学关系”的结论。弄清两者的关系 ,对供应链/价值链的研究和应用有很大的现实指导意义。价值链管理应注重宏观、战略、定性等方面的研究和应用 ,而供应链管理则应更加注重微观操作、运行管理、定量等方面的研究和应用。     

多重关联下PE/VC持股对公司财务风险影响的传导效应

在资本结构、股权结构及市场价值三类多重关联关系下,研究了我国PE/VC持股对公司财务风险影响的多重传导效应。实证检验表明：我国PE/VC的介入会加剧其持股公司发生财务风险的危机,且在该影响过程中,资本结构波动和市场价值波动会增加公司财务风险,而股权结构波动可抑制公司财务风险发生。同时,股权结构波动的遮掩效应最为显著,资本结构波动次之,而市场价值波动的遮掩效应最弱。此外,这三类潜变量在该影响过程中的多重传导效应存在上市板块差异。     

The effect of a currency union on trade: Lessons from the Irish experience

This paper studies the introduction of an exchange rate between Ireland and the UK in 1979 to shed light on the effects of a common currency on the composition of international trade. No evidence is found from time series or panel regressions that the change of exchange rate regime had a significant effect on Anglo-Irish trade. This finding is consistent with previous studies of currency unions between larger, developed countries but conflicts with findings based on more heterogeneous country groupings. The reasons for this discrepancy are discussed.