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.

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.

Average household income, crime, and smoking behaviour in a local area: The Finnish 10-Town study

Social environments, like neighbourhoods, are increasingly recognised as determinants of health. While several studies have reported an association of low neighbourhood socio-economic status with morbidity, mortality and health risk behaviour, little is known of the health effects of neighbourhood crime rates. Using the ongoing 10-Town study in Finland, we examined the relations of average household income and crime rate measured at the local area level, with smoking status and intensity by linking census data of local area characteristics from 181 postal zip codes to survey responses to smoking behaviour in a cohort of 23,008 municipal employees. Gender-stratified multilevel analyses adjusted for age and individual occupational status revealed an association between low local area income rate and current smoking. High local area crime rate was also associated with current smoking. Both local area characteristics were strongly associated with smoking intensity. Among ever-smokers, being an ex-smoker was less likely among residents in areas with low average household income and a high crime rate. In the fully adjusted model, the association between local area income and smoking behaviour among women was substantially explained by the area-level crime rate. This study extends our knowledge of potential pathways through which social environmental factors may affect health. (c) 2007 Elsevier Ltd. All rights reserved.

"Studying Crime and Conflict: The Northern Ireland Example",

(With R. Geary.)