Financial institutions use quantitative risk models not only to manage their risks, but also to communicate information. The Basel regulation in particular uses banks’ own estimates to make capital requirements more sensitive to each bank’s risks, and both the models and the regulation have been blamed for their over-optimism. I link over-optimism to a hidden information problem between a regul...

This paper uses SSBF data to better understand how the owners of small firms use decisions about legal organization, firm size, capital structure, and owner investment in the firm to manage firm risk. The main findings are: Firms with unlimited liability are smaller, both when measured by assets and number of employees, and tend to be less leveraged than those whose owners limit their personal ...

Fujimiya, Mineko, Etsuro Itoh, Naoki Kihara, Ikuo Yamamoto, Masaki Fujimura, and Akio Inui. Neuropeptide Y induces fasted pattern of duodenal motility via Y2 receptors in conscious fed rats. Am. J. Physiol. Gastrointest. Liver Physiol. 278: G32–G38, 2000.—Neuropeptide Y (NPY), a 36-amino acid peptide abundantly expressed in the brain, has been implicated in the regulation of feeding and viscera...

We estimate the impact of effective profit taxation on the financial leverage of corporations on the basis of a pseudo-panel constructed from corporate tax return micro data for the period 1998-2001, a period which saw the introduction of a major corporate tax reform in Germany. The financial leverage is measured by the ratio of long-term debt to total capital. Endogeneity of the effective corp...

It is suggested that our understanding of ICT adoption in the Italian economy can benefit from complementary insights derived from some of the most important theoretical approaches to sectorial diffusion of innovation (epidemic, probit and systemic). As regards the epidemic models the key variables are firms’ market performance indicators. Probit models call our attention to the size of user fi...

We develop a model of insider lending in which a borrower can give incentives to a bank manager to misuse his right of control by extending a loan at favorable rates to the borrower at the expense of the equity value of the bank. The model explains why insider loans are often made to borrowing firms that are also large shareholders of the bank. Although in principal every borrower could bribe t...

The Determinants of Foreign Direct Investment Flows to the Federal Region of Kurdistan The flow of foreign direct investment (FDI) has increased dramatically in the last two decades. However, the distribution of FDI is highly unequal and the competition among countries to attract foreign investors is fierce. This report investigates the determinants of FDI inflows to developing countries in gen...

In this paper we show, in an incomplete contracts framework that combines asymmetric information and moral hazard, that by permitting insiders to trade on personal account the equilibrium level of output can be increased and shareholder welfare can be improved. There are two reasons for this. First, insider trading impounds information regarding the costs and benefits of effort and perk consump...

This study documents that there is significant information content in stock trading by registered corporate insiders for the bond market. We report significant positive price reactions for convertible and straight bonds in response to the Wall Street Journal's Insider Trading Spotlight publication of insider buy transactions and significant negative reactions for insider sell transactions. The ...

This paper examines the impact of local tax rates and capital market conditions on the level and composition of borrowing by foreign affiliates of American multinational corporations. The evidence indicates that 10 percent higher local tax rates are associated with 2.8 percent higher debt/asset ratios of American-owned affiliates, and that borrowing from related parties is particularly sensitiv...