72,484 research outputs found
Evaluating the effectiveness of entrepreneurial leadership coaching
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The Effects of Human Resource Management Decisions on Shareholder Value
Get PDFWe examine the effects of selected human resource management decisions on the abnormal change in total shareholder return. Announcements of human resource decisions are classified into five types--general HR system announcements, compensation and benefits, staffing, shutdowns and relocations, and miscellaneous. Using an event study methodology we investigate whether any of these HR decisions had a discernible effect on either the level or variation of abnormal total shareholder return. We find no consistent pattern of increased or decreased valuation in response to the different types of HR announcements, even after controlling for the likely effect of such announcements on total compensation costs. We do find substantially increased variation in abnormal total shareholder return around the announcement date, which indicates that HR decisions do provide information to the stock market. The events associated with increased variation in total shareholder value are permanent staff reductions and shutdown/relocations. The absence of consistent valuation effects combined with the evidence of increased variation in shareholder value may be attributed to uncontrolled firm-specific factors, the categorization of the HR events or, simply, to the unique interpretations the market placed upon these events
Middlemen versus Market Makers: A Theory of Competitive Exchange
Get PDFWe present a model in which the microstructure of trade in a commodity or asset is endogenously determined. Producers and consumers of a commodity (or buyers and sellers of an asset) who wish to trade can choose between two competing types of intermediaries: 'middlemen' (dealer/brokers) and 'market makers' (specialists). Market makers post publicly observable bid and ask prices, whereas the prices quoted by different middlemen are private information that can only be obtained through a costly search process. We consider an initial equilibrium where there are no market makers but there is free entry of middlemen with heterogeneous transactions costs. We characterize conditions under which entry of a single market maker can be profitable even though it is common knowledge that all surviving middlemen will undercut the market maker's publicly posted bid and ask prices in the post-entry equilibrium. The market maker's entry induces the surviving middlemen to reduce their bid-ask spreads, and as a result, all producers and consumers who choose to participate in the market enjoy a strict increase in their expected gains from trade. We show that strict Pareto improvements occur even in cases where the market maker's entry drives all middlemen out of business, monopolizing the intermediation of trade in the market.
Econometric Methods for Endogenously Sampled Time Series: The Case of Commodity Price Speculation in the Steel Market
Get PDFThis paper studies the econometric problems associated with estimation of a stochastic process that is endogenously sampled. Our interest is to infer the law of motion of a discrete-time stochastic process {p_t} that is observed only at a subset of times {t_1,...,t_n} that depend on the outcome of a probabilistic sampling rule that depends on the history of the process as well as other observed covariates x_t. We focus on a particular example where p_t denotes the daily wholesale price of a standardized steel product. However there are no formal exchanges or centralized markets where steel is traded and pt can be observed. Instead nearly all steel transaction prices are a result of private bilateral negotiations between buyers and sellers, typically intermediated by middlemen known as steel service centers. Even though there is no central record of daily transactions prices in the steel market, we do observe transaction prices for a particular firm -- a steel service center that purchases large quantities of steel in the wholesale market for subsequent resale in the retail market. The endogenous sampling problem arises from the fact that the firm only records p_t on the days that it purchases steel. We present a parametric analysis of this problem under the assumption that the timing of steel purchases is part of an optimal trading strategy that maximizes the firm's expected discounted trading profits. We derive a parametric partial information maximum likelihood (PIML) estimator that solves the endogenous sampling problem and efficiently estimates the unknown parameters of a Markov transition probability that determines the law of motion for the underlying {p_t} process. The PIML estimator also yields estimates of the structural parameters that determine the optimal trading rule. We also introduce an alternative consistent, less efficient, but computationally simpler simulated minimum distance (SMD) estimator that avoids high dimensional numerical integrations required by the PIML estimator. Using the SMD estimator, we provide estimates of a truncated lognormal AR(1) model of the wholesale price processes for particular types of steel plate. We use this to infer the share of the middleman's discounted profits that are due to markups paid by its retail customers, and the share due to price speculation. The latter measures the firm's success in forecasting steel prices and in timing its purchases in order to "buy low and sell high'." The more successful the firm is in speculation (i.e., in strategically timing its purchases), the more serious are the potential biases that would result from failing to account for the endogeneity of the sampling process.Endogenous sampling, Markov processes, Maximum likelihood, Simulation estimation
Government expenditure and economic growth: Evidence from trivariate causality testing
Get PDFThis paper seeks to examine if the relative size of government (measured as the share of total expenditure in GNP can be determined to Granger cause the rate of economic growth, or if the rate of economic growth can be determined to Granger cause the relative size of government. For this purpose, we first use a bivariate error correction model within a Granger causality framework, as well as adding unemployment and inflation (separately) as explanatory variables, creating a simple ‘trivariate’ analysis for each of these two variables. The combined analysis of bivariate and trivariate tests offers a rich menu of possible causal patterns. Using data on Greece, UK and Ireland, the analysis shows: i) government size Granger causes economic growth in all countries of the sample in the short run and in the long run for Ireland and the UK; ii) economic growth Granger causes increases in the relative size of government in Greece, and, when inflation is included, in the UK.public sector growth, economic growth, bivariate and trivariate causality tests, error correction modeling
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