capital market

Abstract We analyze how investment subsidies can affect aggregate volatility and growth in economies subject to capital market imper- fections. Within a model featuring both frictions on the credit market and unequal access to investment opportunities among individuals, we provide specific fiscal parameters able to reduce the probability of recessions, fuel the economy long-run growth rate and place it on a permanent-boom dynamic path. We analyze how conditions on the stabilizing fiscal parameters are modified when frictions in the economy evolve. Eventually, we show how this tax and transfer system can moderate persistence in the economy’s response to temporary and permanent productivity shocks.

This duration D has a strong status in B¨ ohm-Bawerk’s theory of the capital market, because there is an assumption that if capital can employ laborers for this duration, then this will be the production period : The very establishment of this point introduces a certain def- initeness into the length of the production period and thereby into the magnitude of the product that the entrepreneur can turn out with the purchased labor. For a production period must necessarily be adopted of such length that over the period of its duration the whole disposable subsistence fund must all be requi- site and at the same time only just adequate to pay the wage of the whole available supply of labor. ((B¨ ohm-Bawerk 1959-1921b, page 355))

We attempt to answer the following questions: What are the revaluation effects and the impact on performance, volatility, and return correlation from stock market liberalization in emerging markets? These questions have been studied extensively at the market-level but not at the firm level. Our results show significantly different impact of stock market liberalization across firms. Large firms tend to exhibit large revaluation effects, insignificant change in performance, large declines in volatility, and insignificant change in correlation from liberalization. Small firms show small revaluation effects, improved performance, smaller decline in volatility and decreases in correlation after liberalization. These results hold after controlling for movements in world stock returns, concurrent economic reforms and macroeconomic fundamentals. They are also robust to the length of the liberalization window. Our results have important implications for international investors seeking to manage their global exposure as well as for policy makers considering capital market liberalization.

vordering door investeerder tegen emitterende vennootschap nav foute inschatting in prospectus – Toepasselijk recht op vordering van investeerder?. tegen revisor van beursgenoteerd bedr[r]

promotion, by the exchange, of RM listings and the low level of regulatory constraint that is placed on firms that opt for this method. An RM is a method used by a private firm (the entrant firm) to become publicly traded without issuing an IPO). We illustrate a classical RM transaction in figure 1. The RM listing includes a merger between a public shell company, which is generally inactive, and privately held operating company. Figure 1 shows that the Canadian shell generally has a very low market value: CAN$100,000, based on 500,000 shares priced at CAN$0.20. Currently operating closed firms that seek listing usually have a much higher value: for example 500,000 shares priced at CAN$1. The resulting company, here named Result inc., is a product of the merger of the two former firms. This merger entails an exchange of shares: 3 the shareholders of the entrant firm and of the shell exchange their shares for those of the new entity, Result inc. The difference in value between the shell and the operating company means that the shareholders of the private operating company will acquire the majority of the shares of the resulting entity. This transaction is called an RM because the shareholders of the private company ultimately control the public shell company. After the RM, the private firm effectively becomes publicly traded (the resulting firm). Newly listed companies using an RM are exempt from filing a prospectus and need not comply with the registration requirements prevailing for IPOs. RMs, amalgamation, or other similar procedures are used to take advantage of the prospectus and registration exemptions in provincial securities legislations (See Brook, 2000, and cited references, p. 3). This legislation implies that the RM firms cannot issue shares publicly. They get the cash available in the shell and, in the majority of the cases we observe, they issue shares privately. The private placements associated with an RM are generally too small for institutional investors. In figure 1, we consider that private investors get a participation of CAN$100,000. That gives them a 14.29% proportion of control. Then, if we omit the transaction cost, the value of Result inc. is equal to CAN$700,000 [CAN$500,000 (the entrant) + CAN$100,000 (the shell) + CAN$100,000 (the private placement)].

the realized return of a broad-based stock portfolio such as the Standard & Poor's 500. As is evident from these theorems, the conditional expected- return function does [r]

Second, if the choice of the RM listing method increases the cost of capital in the long run and induces larger valuation error linked with asymmetry and heterogeneity of expectations, then IPOs exhibit better long-term performance than RM. Our empirical tests extend the previous literature by providing new analyses of full disclosure listings, including a prospectus and a structured process monitored by the securities commission (in the case of IPOs), and a less structured and less certified process essentially monitored by the exchange (in the case of RMs). We account for the fact that performance differences between IPOs and RMs are not solely attributable to the disclosure effect. First, in the case of IPOs, prestigious investment bankers or venture capitalists can also be involved, while they are absent in RM listing. These reputational intermediaries can influence the pricing and the long-run performance of newly listed companies. We control for the involvement of such intermediaries in the robustness check on our results. Second, an IPO gives rise to a more liquid secondary market for the stocks than an RM, and the illiquidity discount thus negatively affects RM pricing. We implicitly control for the liquidity by including the firm size in the various models. Third, we consider that the TSXV is a less liquid market than the senior exchange, the TSX. We test for the robustness of our model to the inclusion of a dummy variable to differentiate the firms listed on both markets. Fourth, RM firms rely on private equity. Private placement investors generally are considered as well informed and knowledgeable. However, in Canada, the small size of the private placements linked to RM listing prevents institutional investors from being significantly involved in these transactions.

labor and/or credit markets. The topic has attracted researchcrs' and politicians' inter­ est in the context oF European countries' most urgent corn mon problem: subst[r]

INTRODUCTION Venture capital (VC) is typically associated with the private placement of equity or quasi-equity by specialized institutional investors. For Gompers and Lerner (2001, p.155), “specialized financial intermediaries, such as venture capital organizations, can alleviate the information gaps, which allows firms to receive the financing that they cannot raise from other sources.” VC investors have developed methods, expertise and tools to screen, fund, advise and monitor the most promising ventures. Even if some of them act as business angels, individual investors are generally not associated with VC activities. This is probably because, as Fenn et al. (1996, p.1) note, “few investors had the skills necessary to invest directly in this asset class, and those that did found it difficult to use their skills efficiently.” Accordingly, a public VC market, where individual investors finance emerging companies, should not succeed or even survive. In Europe, several countries have implemented new (or junior) stock markets, devoted to the financing of growing companies. They apply more lenient listing rules and often do not require profitability. To be listed, companies must meet the minimal listing requirements that exclude nascent companies. These junior markets are commonly used as an exit vehicle by private VC providers, and are generally considered as failures (Bottazzi and Da Rin 2002). This verdict is consistent with the proposition that public markets are not well suited for financing growing companies, even if these companies are no longer in the early stage of development. In this context, the creation of a public VC market devoted mainly to early stage companies can be considered an unrealistic objective.

Going one step further, Ebell and Haefke (2006), endogenizing the bargaining regime, develop a theoretical model and show how intensified product market competition induces a shift from collective to individual bargaining. They suggest that the strong decline in coverage and unionization in the US and the UK might have been a direct consequence of PM reforms in the early ‘eighties. Their study is the closest to the main focus of the current paper which contributes to formalizing the idea of Gaston and Nelson (2004) that globalization is transformative, i.e. that its effects do not sum up in its direct impacts on wages and employment but extends to transforming the structures of the labor market. On the empirical front, Bertrand (2004) shows that import competition and increased financial pressures alter the employment relationship in the USA from one governed by implicit contracts into one governed by the market. Dreher and Gaston (2005) find that globalization has contributed to deunionization in OECD countries, while Dumont, Rayp and Willemé (2006) and Boulhol, Dobbelaere and Maioli (2006) provide evidence that international trade has weakened workers’ bargaining power in Europe.

The second dimension of our sensitivity analysis refers to characteristics of the errors. We use the ratio of seed and start-up venture capital to investments into tangible and intangible capital. Since this ratio is bounded between zero and one the corresponding regression error cannot be normally distributed. For this reason we apply a logit transformation to the venture capital ratio which expands the domain of the dependent variable from [0, 1] to [-∞, +∞] and thus theoretically allows for disturbances from the full domain of the normal distribution. We do not expect to achieve fundamentally different results from this step because standard errors in Tables 3 and 4 are already computed by bootstrap methods. Actually, our conclusion on the significance of the financial structure index does not change in any of the models. As a second variation in our endogenous variable we use GDP as the denominator to compute the venture capital ratio instead of our combined investments into tangible and intangible capital. This resembles the more common normalization for international comparisons of venture capital activity. Again our results with respect to the significance of the financial structure remain unchanged. Another potential source of wrong inference is outliers in the data. Figure 2 shows that Canada has the highest venture capital ratio, exceeding even the US value by about 50 percent. This surprisingly high value might be due to errors in data collection and may bias our estimates but, after eliminating Canada from the sample, our conclusion remains the same. A further step in this direction would be to eliminate the USA as well from the sample, because the US venture capital market is exceptional and may bias our results toward a significant positive relation between venture capital finance and market-based financial systems. Figure 2 already points to this possibility. But, even after eliminating North American data from the sample, our financial structure index remains significantly positive, in most of the models at the 1-percent level. Finally, we also use asymptotic standard errors for the computation of test statistics and our results are again confirmed without exception.

  - Willingness  to  take  subordination.  In  their  search  for  yield  in  the  fixed  income   market,  investors  are  facing  a  choice:  either  investing  in  the  high  yield  market,   including  senior  bonds  but  for  lower  rating  issuers  or  make  the  choice  to  invest  in   hybrid  bonds  which  means  accepting  to  be  subordinated  but  buying  notes  from  a   strong  credit  profile  company.  Part  of  the  boom  in  2013-­‐2014  can  be  explained  by   an  increasing  number  of  investors  making  the  second  choice  based  on  empirical   observations.  Indeed,  as  mentioned  in  IV.  A)  i),  hybrids  have  better  performed   during  the  crisis  than  equally  rated  senior  bonds.  

Est-il alors possible de la même manière d’envisager une évolution du droit français afin de permettre une dépossession contre leur gré des actionnaires par le biais d’une opération de conversion des créances en capital par les créanciers ? La prise de contrôle du débiteur sans son consentement poserait des difficultés, comme nous avons pu le voir, notamment en vertu du principe du droit de propriété et de l’affectio societatis. De plus, on peut se demander si cela ne remettrait pas en cause l’esprit même de notre droit des procédures collectives. En effet, l’accent a été mis depuis quelques années sur l’importance de la prévention dans le traitement des entreprises en difficulté. Or, la prévention repose sur une confiance du dirigeant qui souhaite traiter les difficultés de la société. On souhaite en effet que le dirigeant qui se rend compte des difficultés que traverse sa société les signale au plus tôt afin d’avoir plus de chances de les traiter. Mais, si la loi admettait l’éventualité qu’il se trouve totalement dépossédé dans le cadre d’une procédure collective, cela n’aurait plus vraiment de cohérence car cela créerait non pas un attrait envers les procédures collectives mais une crainte, comme cela était le cas dans notre ancien droit des faillites. Aussi, une telle solution serait contraire au droit de l’Union Européenne qui a pourtant une place de plus en plus importante dans notre droit.

these costs by issuing stock now even if new equity is not needed immediately to finance real investment, just to move the firm down the pecking order. In other words, [r]

représentées par l’hypostase abstraite du « capital ». En découlait un discrédit jeté sur la macro-économie néo-classique alors élaborée par leurs contradicteurs d’outre- atlantique, situés plus à droite sur l’échiquier politique (Solow, Swan, Samuelson...). L’argument principal des Britanniques consistait à faire valoir que la définition néo- classique du capital exige que sa productivité soit définie comme la somme actualisée de ses rendements futurs rapportée au coût de sa mise en œuvre. Dans la mesure où le rendement du capital est, ensuite, défini en fonction de la productivité (supposée décroissante) du capital, il y a là une circularité mortelle pour l’analyse : le rendement devient à lui-même sa propre définition, et reste donc inexpliqué. L’enjeu, bien sûr, côté néo-classique, consiste à tenter de naturaliser le rendement du capital en le pré- sentant comme la mesure de sa productivité —une propriété physique ou technique, apparemment indépendante des compromis sociaux en vigueur. Au terme de ce dé- bat, Samuelson lui-même concédera que les Britanniques avaient raison : l’économie néo-classique est incapable de penser logiquement cette abstraction qu’elle nomme

D’ailleurs, certains chercheurs trouvent que l’emploi légitime permet d’augmenter la performance criminelle (Luissier, Bouchard et Beauregard, 2001; Reuter, MacCoun et Murphy, 1990; Tremblay et Morselli, 2000). Leurs conclusions permettent d’expliquer que la raison derrière le lien positif entre l’emploi et la performance criminelle réside dans les ressources offertes par les emplois occupés par les délinquants. En profitant de ceux-ci, ces individus réussissent à maximiser leurs revenus criminels et à faciliter l’exécution de leurs activités criminelles. Il est possible que l’emploi offre aux délinquants un ensemble de compétence qu’ils peuvent utiliser dans le monde criminel. L’idée que l’emploi offrirait aux délinquants des connaissances et habiletés (capital humain) utiles pour le crime n’est donc pas à négliger. Auprès des trafiquants de drogue, il semble que l’emploi ne permettrait pas d’avoir accès à des compétences criminelles particulièrement utiles pour les activités de trafic de drogue afin de performer criminellement à un niveau élevé. D’ailleurs, malgré la difficulté de pousser la réflexion plus loin à ce sujet, l’employabilité ne semble pas offrir aux trafiquants de drogue des ressources nécessaires pour éviter les arrestations. Il est important de noter que les données rétrospectives utilisées ne permettent pas de se renseigner sur le type d’emploi ou les compétences obtenues par le biais d’un emploi de chaque trafiquant de drogue. Il est toutefois difficile de complètement laisser de côté la possibilité que les trafiquants ne trouvent pas certains avantages dans leurs emplois pour performer criminellement. Un devis qualitatif complémentaire permettrait d’éclaircir davantage sur la question.

traditional sources of capital for the real estate industry, commercial banks and insurance companies, are not currently attractive resources, the future markets for real [r]

100 $, seulement 50 $ sont ajoutés aux revenus du contribuable et constituent le gain en capital imposable. La prise en compte des gains en capital a varié au cours des dernières décennies. De 1972 à 1987, seulement la moitié des gains en capital était imposable. Le montant des gains en capital réalisés devant être inclus dans le revenu est tout d’abord passé de 50 % à 66,67 % en 1988, puis à 75 % en 1990. Finalement, le taux d’inclusion des gains en capital réalisés a diminué à 66,67 % en 2000 avant de revenir à son niveau initial de 50 % plus tard au cours de la même année. À cette époque, le gouvernement canadien ayant déterminé que, à l’aube d’une période de surplus budgétaire, c’était le meilleur moyen de rendre le système fiscal canadien propice à l’innovation et d’assurer aux entreprises l’accès à des capitaux essentiels à leur développement 1 .

well be related to individual differences in socio-economic characteristics and social norms of behavior. The empirical question we address in this paper is to measure how variations in social norms, economic and social characteristics of individuals affect their propen- sities to provide and sustain social capital. In order to perform our measurements, we combine the strengths of survey and experimental methods by having a large representative sample of the Dutch population play a computerized version of the two player game similar to that presented by Berg, Dickhaut and McCabe (1995) (henceforth BDMc). The structure of the game allows concerns for social efficiency and motives of trust, trustworthiness, positive reciprocity, and altruism to emerge from the players’ decisions. In this game, two players are given an equal endow- ment, with one player randomly assigned to the role of a sender, and the other player assigned to the role of a responder. The sender must decide how much to invest from his endowment. This amount is doubled and transferred to the respon- der, who must choose how much of his total wealth, i.e., the amount received plus his endowment, should be returned to the sender. It is easy to see that investments are socially desirable in this game as they increase the overall social surplus. An element of trust is involved as senders bear a risk that responders return nothing. Trustworthiness and reciprocity are involved as responders have the possibility to reward trust placed by senders. Moreover, senders and responders may also invest or return, regardless of the action of the other player, out of pure altruism (see e.g., Cox, 2004).

Pour que cette question ait un sens, il faudrait que les dépenses aient un impact social positif, mais aussi un coût social pour que la réponse ne soit pas triviale. Le cadre proposé par les modèles de croissance endogène s'impose naturellement pour cette analyse. D'un côté, il est facile d'imaginer et de justier les dépenses publiques en les considérant comme subvention à la recherche, au capital humain, etc... De l'autre côté, il est dicile de répondre à cette question, parce que, quand il n'existe pas de taxes forfaitaires on ne sait pas, a priori, combien il faudrait dé- penser/subventionner. Est-ce que le niveau des dépenses serait comme si l'on avait accès à des taxes forfaitaires ou moins que cela ? Est-ce que la concurrence impar- faite et/ou l'existence des externalités sont susceptibles de modier le comportement optimal ? Est-il souhaitable de corriger une distorsion en introduisant une autre ? Peut-on quantier la politique optimale non seulement à l'équilibre stationnaire, mais également dans la transition ? Ces questions dénissent notre problématique.