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on Corporate Finance |
| By: | Matschke, Manfred Jürgen; Brösel, Gerrit |
| Abstract: | After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e. purpose-oriented) theory. The main body of the paper focusses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed. |
| Keywords: | Unternehmensbewertung; company valuation; decision function; subjective limit value; оценкa предприятий |
| JEL: | M20 G11 M40 G34 G31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4610&r=cfn |
| By: | Fousseni Chabi-Yo; Dietmar Leisen; Eric Renault |
| Abstract: | Asymmetric shocks are common in markets; securities' payoffs are not normally distributed and exhibit skewness. This paper studies the portfolio holdings of heterogeneous agents with preferences over mean, variance and skewness, and derives equilibrium prices. A three funds separation theorem holds, adding a skewness portfolio to the market portfolio; the pricing kernel depends linearly only on the market return and its squared value. Our analysis extends Harvey and Siddique's (2000) conditional mean-variance-skewness asset pricing model to non-vanishing risk-neutral market variance. The empirical relevance of this extension is documented in the context of the asymmetric GARCH-in-mean model of Bekaert and Liu (2004). |
| Keywords: | Financial markets; Market structure and pricing |
| JEL: | C52 D58 G11 G12 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:07-47&r=cfn |
| By: | Jia, Y. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper provides experimental evidence on how incentive compensation, peer-group behavior, and audit (team) effectiveness influence managerial reporting behavior. Results show that an increase in incentive compensation intensity induces subjects to report less truthfully. High level of peer honesty promotes truthful reporting; however, the effects are weaker when incentive compensation intensity is high. Audit (team) effectiveness shows no significant influence on reporting behavior. The results provide the first clear evidence that firms need to consider carefully the effect of incentive compensation as well as the influence of peer groups when designing contracts. Furthermore, without a credible penalty for untruthful financial report, increased audit (team) effectiveness will not promote honest reporting. |
| Keywords: | Managerial honesty; Incentive compensation intensity; Peer behavior; Audit effectiveness |
| JEL: | G30 J33 M41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200728&r=cfn |
| By: | Peer Zumbansen |
| Abstract: | Research in corporate governance and in labour law has been characterized by a disjuncture in the way that scholars in each field are addressing organizational questions related to the business enterprise. While labour has eventually begun to shift perspectives from aspirations to direct employee involvement in firm management, as has been the case in Germany, to a combination of 'exit' and 'voice' strategies involving pension fund management and securities litigation, it remains to be seen whether this new stream will unfold as a viable challenge to an otherwise exclusionary shareholder value paradigm. At the same time, recent suggestions made by Delaware Chancery Court Vice Chancellor Strine, to dare think about potentially shared commitments between management and labour - and UCLA's Stephen Bainbridge's response - underline the viability - and, the contestedness - of attempts at moving the corporate governance debate beyond the confines of corporate law proper. While such a wider view had already famously been encouraged by Dean Clarke in his 1986 treatise on Corporate Law (p. 32), mainstream corporate law does not seem to have endorsed this perspective. This paper takes the questionable divide between management and labour within the framework of a limiting corporate governance concept as starting point to explore the institutional dynamics of the corporation, hereby building on the theory of the innovative enterprise, as developed by management theorists Mary O'Sullivan and William Lazonick. Largely due to the sustained distance between corporate and labour law scholars, neither group has effectively addressed their common blind spot: a better understanding of the business enterprise itself. In midst of an unceasing flow of affirmations of the finance paradigm of the corporation on the one hand and 'voice' strategies by labour on the other, it seems to fall to management theorists to draw lessons from the continuing co-existence of different forms of market organization, in which companies appear to thrive. Exploring the conundrum of 'risky' business decisions within the firm, management theorists have been arguing for the need to adopt a more sophisticated organizational perspective on companies operating on locally, regionally and transnationally shaped, often highly volatile market segments. Research by comparative political economists has revealed a high degree of connectivity between corporate governance and economic performance without, however, arriving at such favourable results only for shareholder value regimes. Such findings support the view that corporate governance regimes are embedded in differently shaped regulatory frameworks, characterized by distinct institutions, both formal and informal, and enforcement processes. As a result of these findings, arguments to disassociate issues of corporate governance from those of the firm's (social) responsibility [CSR] have been losing ground. Instead, CSR can be taken to be an essential part of understanding a particular business enterprise. It is the merging of a comparative political economy perspective on the corporation with one on the organizational features, structures and processes of the corporation, which can help us better understand the distribution of power and knowledge within the 'learning firm'. |
| Keywords: | Corporate Governance, organizational theory, innovative enterprise, learning firm, employee involvement, corporate social responsibility, European/German corporate governance |
| JEL: | G23 K22 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp347&r=cfn |
| By: | Bonnie Wilson (Department of Economics, Saint Louis University); Dennis Coates (Department of Economics, University of Maryland Baltimore County); Jac Heckelman (Department of Economics, Wake Forest University) |
| Abstract: | It is widely recognized that interest groups affect both microeconomic and macroeconomic outcomes. However, few researchers have attempted to discern empirically the factors that contribute to interest group activity. This paper provides a test of several theories of group formation in a panel setting. A nation’s stability, socioeconomic development, political system, size, and diversity all appear to contribute to interest group formation, as predicted by theory. |
| Keywords: | special interest groups, institutional sclerosis, stock returns, volatility |
| JEL: | D7 G1 G2 L5 O16 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:slu:wpaper:2007-03&r=cfn |
| By: | Yaya Koloma (GED, Université Montesquieu Bordeaux IV) |
| Abstract: | Ce papier a pour but de décrire les faits marquants du secteur de la microfinance au Mali : son contexte, ses caractéristiques, et son articulation avec les politiques publiques de réduction de la pauvreté et des inégalités, notamment de genre. Les nouvelles orientations du financement du développement ont conduit le Mali à considérer le secteur de la microfinance comme l’un des outils majeurs des politiques publiques de lutte contre la pauvreté, en instaurant un cadre réglementaire et une politique nationale de microfinance. Elle toucherait 6,5% de la population totale estimée à 11,6 millions en 2005. Ce taux aurait connu un accroissement de 27,7% entre 2003 et 2005. Sur 1,9 millions de familles maliennes en 2005, la proportion de familles touchées par les services microfinanciers s’élèverait à 38,8%. Les femmes représenteraient 40,3% de la clientèle des institutions de microfinance. Les controverses théoriques et empiriques ont conduit à revoir l’espoir tant suscité de l’efficacité des services de la microfinance en termes de lutte contre la pauvreté et les inégalités de genre. L’étude du cas du Mali, à travers les quelques rares évaluations d’impact qui ont été réalisées, permet de constater que, même si une amélioration certaine des conditions de vie de certains clients ou clientes bénéficiaires des services n’est pas à écarter, une réduction certaine de la pauvreté peut paraître difficile. The purpose of this paper is to describe the outstanding facts of the microfinance’s sector in Mali, its context, its characteristics, and its articulation with the public policies of poverty reduction, and in particular the gender inequalities. The new directions of financial development led Mali to consider the microfinance sector as one of the major tools of the public policies to fight against poverty, and also found a coherent lawful framework and a national microfinance policy. The microfinance (credit and/or saving) touched 6.5% of a global population estimated to 11.6 millions persons in 2005. This rate increased by 27.7% from 2003 to 2005, 1.9 million Malians families in 2005, the proportion of family accessing to the microfinance services would be 38.8%. Women would represent 40.3% and they seem to be the privilege target group of microfinance. The theoretical and empirical controversies should permit to re-examine the so high hope raised by microfinance concerning its effectiveness to reduce poverty and gender inequalities. Through the few evaluations of impact, the Mali’s case study, made it possible to note that even if an incontestable improvement of living conditions of some beneficiaries is not to draw aside, a real reduction of poverty could appears difficult. (Full text in french) |
| JEL: | G21 G39 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:mon:ceddtr:138&r=cfn |
| By: | Matschke, Manfred Jürgen; Brösel, Gerrit |
| Abstract: | After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e. purpose-oriented) theory. The main body of the paper focusses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed. |
| Keywords: | Unternehmensbewertung; company valuation; decision function; subjective limit value; waluacja przedsiębiorstwa |
| JEL: | G13 M20 G11 M40 G34 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4621&r=cfn |
| By: | Reggiani, Tommaso |
| Abstract: | This article proposes to analyze Grameen Bank operational system and its own evolution, illustrating the values that support this economics theory and the innovations that microcredit brings to the understanding of economics and banking phenomena. |
| Keywords: | Microcredit; Grameen Bank; Poverty; Yunus; Ethics in Economics |
| JEL: | R51 G21 |
| Date: | 2007–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4624&r=cfn |
| By: | Kris James Mitchener (Assistant Department of Economics, Santa Clara University (E-mail:kmitchener@scu.edu)); nd Mari Ohnuki (Institute for Monetary and Economic Studies, Bank of Japan (E-mail: mari.oonuki@boj.or.jp)) |
| Abstract: | We construct new quarterly estimates of lending rates for 47 Japanese prefectures for the period 1886-1922, and test the extent to which regional capital markets integrated during this period. We analyze whether the capital market was efficient, estimate the speed of convergence among the rates, and assess the degree to which different regions were integrated with the main financial centers of Japan. Interest-rate differentials between the financial centers of Japan and other regions do not follow a random walk, and hence are suggestive of market efficiency ? in the sense that arbitrage opportunities did not persist. Results from cointegration tests suggest that the integration in Japan is characterized by multiple stochastic elements. We find the existence of four long-run cointegrating relationships. We also find evidence that shocks occurring in a financial center, such as the Kanto region, were transmitted to outlying regions and had permanent, but small effects on their rates. |
| Keywords: | Financial Market Development, Capital Market Integration, Economic Integration, Japanese Banks |
| JEL: | F21 G21 N25 O16 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:07-e-17&r=cfn |