We show that higher institutional ownership causes firms to pay more dividends. Our identification relies on a discontinuity in ownership around Russell index thresholds. Our estimates indicate that ...a one-percentage-point increase in institutional ownership causes a $7 million (8%) increase in dividends. We also find differences in shareholder proposals and voting patterns that suggest that even nonactivist institutions play an important role in monitoring firm behavior. The effect of institutional ownership on dividends is stronger for firms with higher expected agency costs.
New industries sparked by technological change are characterized by high uncertainty. In this paper, we explore how a firm's conceptualization of products in this context, as reflected by product ...feature choices, is influenced by prior industry affiliation. We study digital cameras introduced from 1991-2006 by firms from three prior industries. We hypothesize and find that: (1) prior industry experience shapes a set of shared beliefs that results in similar and concurrent firm behavior; (2) firms notice and imitate the behaviors of firms from the same prior industry; and, (3) as firms gain experience with particular features, the influence of prior industry decreases. This study extends previous research on firm entry into new domains by examining heterogeneity in firms' framing and feature-level entry choices.
Why Are U.S. Stocks More Volatile? BARTRAM, SÖHNKE M.; BROWN, GREGORY; STULZ, RENÉ M.
The Journal of finance (New York),
August 2012, Letnik:
67, Številka:
4
Journal Article
Recenzirano
Odprti dostop
U.S. stocks are more volatile than stocks of similar foreign firms. A firm's stock return volatility can be higher for reasons that contribute positively (good volatility) or negatively (bad ...volatility) to shareholder wealth and economic growth. We find that the volatility of U.S. firms is higher mostly because of good volatility. Specifically, stock volatility is higher in the United States because it increases with investor protection, stock market development, new patents, and firm-level investment in R&D. Each of these factors is related to better growth opportunities for firms and better ability to take advantage of these opportunities.
Abstract Extant research in operations management has revealed divergent insights into the value potential of resource efficiency. While one view relates efficiency with good operations management ...and asserts that slack resources are a form of waste that should be minimized, the other view suggests that limited resource slack can impose heavy costs on firms by making them brittle. In this research, the authors build on these views to investigate the relationship of inventory, production, and marketing resource efficiency of firms with three metrics of financial performance (i.e., Stock‐Returns, Tobin's Q, and Returns‐on‐Assets). The authors evaluate the theoretical framework using secondary information on all U.S. based publicly‐owned manufacturing firms across the 16‐year time period of 1991–2006. Analysis utilizing a mixed‐model approach reveals that a focus on resource efficiency is positively associated with firm financial performance. However, findings also support the arguments favoring slack, indicating that the financial gains from resource efficiency exhibit diminishing returns.
I investigate the effect of improvements to the transportation infrastructure on changes in location patterns of population in Barcelona, Spain between 1991 and 2006. At a census tract level, I ...verify and extend the finding of Baum-Snow (2007a) that transportation improvements cause suburbanization: (1) improvements to the highway and railroad systems foster population growth in suburban areas; (2) the transit system also affects the location of population inside the central business district (CBD). To estimate the causal relationship between the growth of population (density) and transportation improvements, I rely on an instrumental variables estimation that uses distances to the nearest Roman road, the nearest 19th century main road, and the nearest 19th century railroad network as instruments for the 1991–2001 changes in distance to the nearest highway ramp and the distance to the nearest railroad station.
Empirical evidence has suggested that R&D investment is positively related to economic growth. This paper extends prior research by further examining the heterogeneous effects of R&D expenditures in ...the high-tech sector on economic growth. This study adopts a quantile regression approach to explore the marginal effect of R&D expenditures in the high-tech sector across different quantiles of the conditional GDP distribution for 23 OECD countries and Taiwan during 1991–2006. Empirical evidences show that the impacts of R&D expenditures in the high-tech sector are heterogeneous across levels of per capita income. High-tech industrial R&D spending has a strong positive effect on GDP per capita at the highest quantile of the distribution. However, all sectors' R&D spending relative to GDP is subject to significant negative returns only when considering the middle income countries. The study provides a more comprehensive understanding of the correlation between R&D investment and economic growth.
This paper estimates constant and dynamic hedge ratios in the New York Mercantile Exchange oil futures markets and examines their hedging performance. We also introduce a Markov regime switching ...vector error correction model with GARCH error structure. This specification links the concept of disequilibrium with that of uncertainty (as measured by the conditional second moments) across high and low volatility regimes. Overall, in and out-of-sample tests indicate that state dependent hedge ratios are able to provide significant reduction in portfolio risk.
The entry of foreign firms in India since the reforms forces domestic firms to undertake R&D activities or import technology so as to compete with them. This study examines the relationship between ...FDI and R&D of the domestic firms in the post-liberalization regime. The study uses unbalanced panel data for 1,843 Indian manufacturing firms operating during the period 1994–2005 and corrects for the self-selection problem by using a Heckman-two step procedure. The analysis involving full sample does not give a clear picture of the impact of FDI on the innovation strategies of domestic firms. Interesting results emerge, when analysis is carried out according to different sub-samples—based on foreign-ownership and technology intensity of the industry. FDI and R&D are found to be complements when sample is divided on the bases of equity ownership. FDI inflow induces foreign-owned firms in high tech industries and firms in minority ownership to invest in R&D.
China’s transition from a centrally planned to a market economy has substantially eroded governmental support for child care, raising the concern about how the change of child care provision may ...affect women’s labor market participation. This article examines the impact of child care availability and affordability on the employment and child care choices of urban Chinese women with preschool children during the transition. The analysis shows that the presence of day care in the community is positively associated with a mother’s labor force participation and labor hour supply and that the rising costs of hired caregivers reduce the mother’s labor hour supply. The analysis also finds that both the costs of hired caregivers and family income have important effects on the use of out-of-home care services. Simulations indicate that the decline in day care presence would account for 46% of the decrease in mothers’ labor force participation during the public-sector restructuring between 1997 and 2000.
Do households react to changes in the distribution of income in their localities by changing their charitable giving? The theoretical prediction of the effects of income inequality on giving is ...unclear. We study how changes in income inequality measured at the neighbourhood and municipality levels affect charitable giving by households in Canada between 1991 and 2006. We find that increases in inequality increase giving. Results are sensitive to the geographic dispersion of low-and high-income households in neighbourhoods within a municipality. The effect on donations is smaller in areas with high levels of inequality at both neighbourhood and municipality levels. Est-ce que l'inégalité des revenus accroît les dons de charité? Est-ce que les ménages réagissent aux changement dans la distribution des revenus dans leurs localités en modifiant leurs dons de charité? Les prédictions théoriques des effets de l'inégalité de revenus ne sont pas claires. On étudie comment les changements dans l'inégalité mesurée des revenus, au niveau du voisinage et de la municipalité, ont affecté les dons de charité des ménages au Canada entre 1991 et 2006. On découvre que l'accroissement de l'inégalité accroît les dons. Les résultats sont sensibles à la dispersion géographique des ménages à bas et hauts revenus dans les voisinages à l'intérieur des municipalités. L'effet sur les dons est faible dans les espaces où il y a hauts niveaux d'inégalité à la fois au niveau du voisinage et de la municipalité.
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