Finance and Financial Management Commons^™

Economic Consequences Of Speculative Side Bets: The Case Of Naked Credit Default Swaps, Yeon-Koo Che, Rajiv Sethi

Yeon-Koo Che

We examine the effects of “naked” credit default swaps on equilibrium debt contracts, pro ject choice, and the likelihood of default when investors have heterogeneous beliefs about the future revenues of the borrower. Although such contracts are zero sum side bets, their existence can have important economic consequences. They induce investors who are most optimistic about the future revenues of borrowers, and would therefore be natural purchasers of debt, to sell credit protection instead. This diverts their capital away from potential borrowers and channels it into collateral to support speculative positions. The resulting shift in the terms of lending against …

Media Attention & Executive Pay In The Netherlands, Jordan Otten

Jordan Otten

This report is centered around three research questions on newspaper coverage and executive compensation in The Netherlands. 1) How has the coverage developed over the years? 2) How selective are newspapers in their coverage? And 3) What are the influences of newspaper coverage on executive compensation?

Based on the articles that have appeared in the period 1998- mid 2009, it can be concluded that the attention by newspapers is not only of the most recent years. Newspapers do not systematically focus on the better or worse performing companies and do also not focus on the higher or highest paid executives. …

International Diversification: A Copula Approach, Lorán Chollete, Victor De La Pena, Ching-Chih Lu

Lorán Chollete

No abstract provided.

Treasury Factor Fundamentals, Yogendra Sisodia

Yogendra Sisodia

Treasury Operations and Fundamental Factors

Incentive Effect Of Piece Rate Contracts: Evidence From Two Small Field Experiments, Lan Shi

Lan Shi

No abstract provided.

Adjustment Costs, Errors In Risk Weights, And Banks' Balance Sheets: The 1988 Basel Accord Revisited, Kevin T. Jacques, Elva Coadari, John Thornton

Kevin T Jacques

In the context of a profit-maximization model that recognizes both non-homogeneous adjustment costs and errors in risk weights, this paper examines the question of why different banks exhibited different responses to implementation of the 1988 Accord.

Procyclicality, Bank Lending, And The Macroeconomic Implications Of A Revised Basel Accord, Kevin T. Jacques

Kevin T Jacques

No abstract provided.

The Defense-Growth Relationship: An Economic Investigation Into Post-Soviet States, Bruce D. Mcdonald Iii, Robert J. Eger Iii

Bruce D. McDonald, III

An important question stemming from the collapse of the Soviet Union is how defense spending has influenced the economic performance of the 15 member states since their establishment as market economies. This study furthers the understanding of the relationship between defense spending and economic growth using data from the states of the former Soviet Union from 1992 to 2007. A nonlinear production function was used for direct effects, and models of investment and employment were employed for indirect effects. Contrary to expectations, the findings show that continued reliance on the defense sector in post-Soviet states has helped overall economic growth. …

Using Actual Betting Percentages To Analyze Sportsbook Behavior: The Canadian And Arena Football Leagues, Rodney Paul, Andrew P. Weinbach, Kristin K. Paul

Rodney J. Paul

Sportsbook behavior is tested for the Canadian and Arena Football Leagues using real sportsbook betting percentages from on-line sportsbooks. The balanced book hypothesis of the traditional sportsbook models does not appear to hold for these leagues, as favorites and overs attract more than 50 percent of the betting dollars. Although there is some slight evidence toward shading the line in these directions, there is also no overwhelming evidence supporting the Levitt (2004) hypothesis, as sportsbooks do not appear to be actively pricing to maximize profits. In general, the results seem more consistent with the sportsbook pricing as a forecast, content …