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Subprime crisis and board (in-)competence : private vs. public banks in Germany
Hau, Harald; Thum, Marcel - 2009
We examine evidence for a systematic underperformance of Germany's state-owned banks in the current financial crisis and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the biographical background of 593 supervisory board members in the 29...
Persistent link: https://www.econbiz.de/10010276835
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Monitoring a common agent : implications for financial contracting
Khalil, Fahad; Martimort, David; Parigi, Bruno Maria - 2005
We study the problem of multiple principals who want to obtain income from a privately informed agent and design their contracts non-cooperatively. Our analysis reveals that the degree of coordination between principals has strong implications for the shapes of contracts and the amount of...
Persistent link: https://www.econbiz.de/10010261310
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Diversification and ownership concentration
Parigi, Bruno Maria; Pelizzon, Loriana - 2005
We consider a mean-variance general equilibrium economy where the expected returns for controlling and non-controlling shareholders are different because the former are able to divert a fraction of the profits. We find that when investor protection is poor, asset return correlation affects...
Persistent link: https://www.econbiz.de/10010261366
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Reconciling the Original Schumpeterian Model with the Observed Inverted-U Relationship between Competition and Innovation
Bonfatti, Roberto; Campodonico, Luis A. Bryce; Pisano, Luigi - 2018
Empirical studies have uncovered an inverted-U relationship between product-market competition and innovation. This is … inconsistent with the original Schumpeterian Model, where greater competition reduces the profitability of innovation. We show that … the model can predict the inverted-U if the innovators’ talent is heterogenous, and privately observable. With competition …
Persistent link: https://www.econbiz.de/10011815841
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Fundamentals, misvaluation, and investment: the real story
Chirinko, Robert S.; Schaller, Huntley - 2007
Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama-MacBeth regressions to determine whether overinvestment...
Persistent link: https://www.econbiz.de/10010264073
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Optimum taxation of life annuities
Brunner, Johann K.; Pech, Susanne - 2006
The market for private life annuities is characterised by adverse selection, that is, contracts offer lower than fair payoffs to individuals with low life expectancy. Moreover, life expectancy and income have been found to be positively correlated. The paper shows that a linear tax on annuity...
Persistent link: https://www.econbiz.de/10010261401
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Noise vs. news in equity returns
Chirinko, Robert S.; Foad, Hisham - 2006
What role does noise play in equity markets? Answering this question usually leads immediately to specifying a model of fundamentals and hence the pervasive joint hypothesis quagmire. We avoid this dilemma by measuring noise volatility directly by focusing on the behavior of country closed-end...
Persistent link: https://www.econbiz.de/10010263989
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Real options and human capital investment
Jacobs, Bas - 2007
This paper extends the standard human capital model with real options. Real options influence investment behavior when risky investments in human capital are irreversible and individuals can affect the timing of the investment. Option values make individuals more reluctant to invest in human...
Persistent link: https://www.econbiz.de/10010264119
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Do differences in institutional and legal environments explain cross-country variations in IPO underpricing?
Hopp, Christian; Dreher, Axel - 2007
We empirically analyze the determinants of Initial Public Offering (IPO) underpricing using panel data for 29 countries over the period 1988-2005. Our hypotheses stress the importance of institutional and legal factors in explaining cross-country variations. We find that increased protection of...
Persistent link: https://www.econbiz.de/10010264196
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Equity fund ownership and the cross-regional diversification of household risk
Becker, Sascha O.; Hoffmann, Mathias - 2008
We explore the link between portfolio home bias and consumption risk sharing among Italian regions using aggregated household level information on consumption, income and portfolio holdings. We propose to use data on equity fund ownership to proxy for regional home bias: equity funds are...
Persistent link: https://www.econbiz.de/10010264295