Substitutes for legal protection: corporate governance and dividends in Victorian Britain

Companies in Victorian Britain operated in a laissez-faire legal environment from the perspective of outside investors, implying that such investors were not protected by the legal system. This article seeks to identify the alternative mechanisms that outside shareholders used to protect themselves by examining the dividend policy and governance of over 800 publicly traded companies at the beginning of the 1880s. We assess the importance of these mechanisms by estimating their impact on Tobin's Q. Our evidence suggests that dividends and well-structured and incentivized boards of directors may have played a role in protecting the interests of outside investors.

Indigenous rights in Chile: National identity and majority group support for multicultural policies

We examine support for policies affecting indigenous ethnic minorities in Chile. Specifically, we examine the role of national group definitions that include the largest indigenous group—the Mapuche—in different ways. Based on questionnaire data from nonindigenous Chilean students (N = 338), we empirically distinguish iconic inclusion, whereby the Mapuche are seen as an important part of Chile's history and identity on the one hand, from egalitarian inclusion, which represents the Mapuche as citizens of equal importance to the nonindigenous majority on the other. Both forms of inclusion positively predict support for indigenous rights, independent of participants' political affiliation, strength of national identification, and social distance. A second study (N = 277) replicates this finding whilst controlling for right-wing authoritarianism, social dominance orientation, blind patriotism, and constructive patriotism. It also finds iconic inclusion to be predictive of a pro-Mapuche position regarding the unrest over the issue of ancestral land in 2009. We conclude that understanding how national identity affects attitudes about minority rights necessitates appreciating the importance of particular meanings of nationality, and not only the strength of identification.

Unfunded pension liabilities and sponsoring firm credit risk: an international analysis of corporate bond spreads

This paper tests empirically whether pension information derived by corporate pension accounting disclosures is priced in corporate bond spreads. The model represents a hybrid of more traditional accounting ratio-based models of credit risk and structural models of bond spreads initiated by Merton (1974). The model is fitted to 5 years of data from 2002 to 2006 featuring companies from the US and Europe. The paper finds that while unfunded pension liabilities are priced in the overall sample, they are not priced as aggressively as traditional leverage. Furthermore, an extended model shows that the pension–credit risk relation is most evident in the US and Germany, where unfunded pension liabilities are priced more aggressively than traditional forms of leverage. No pension–credit risk relation is found in the other countries sampled, notably the UK, Netherlands and France.

Unfunded Pension Liabilities and the Corporate CDS Market

This article examines the impact of pension deficits on default risk as measured by the premia on corporate credit default swaps (CDS). We find highly significant evidence that unfunded pension liabilities raise one- and five-year CDS premia. However, this relation is not homogeneous across countries, with the U.S. CDS market leading its European counterparts in the pricing of defined-benefit pension risk.