Mergers, executive risk reduction and stockholder wealth

Among the possible consequences of agency problems between owners and managers is a tendency by managers to make investment decisions for their firms that are deliberately aimed at reducing firm risk, as a means to control managers' personal wealth risk. The literature has suggested that such behavior may occur to the detriment of shareholder wealth, and that mrgers may be a particular class of investment decisions for which the behavior would be observable. We test these hypotheses empirically, but find no evidence from our merger sample that risk reduction for the aqquiring firm is the typical outcome nor that, when it occurs, it is differentially costly for shareholders.

Labor participation in corporate policy-making decisions: West Germany's experience with codetermination

If workers are wealth maximizers, codetermination should lead to less risky investments, smaller dividends, reduced firm leverage, higher and more stable salaries, and more capital-intensive production processes. Unless codetermination also increases productivity by raising wokers' morale and satisfaction or reduces information asymmetries within the firm, shareholder wealth and firm value will decline. An analysis of West Germany's case, however, indicates that codetermination has little, if any, effect on corporate operations and performance.

Shareholder Value Maximization: What Managers Say and What They Do

This paper examines whether Swiss firms maximize shareholder value. To find out, we survey the goals of 313 listed and unlisted firms. We then examine whether managers’ decisions are consistent with their goals and analyze whether performance corresponds to intentions. Our results show that most managers pursue conflicting targets. Many also declare that they do not maximize shareholder value. And those who claim they do sometimes rely on investment criteria that are inconsistent with that target. Finally, we find that share-price performance is marginally better when managers claim to maximize shareholder value, particularly when stock prices have fallen.

Social milieus and worldviews in Mamluk adab-encyclopedias: The example of poverty and wealth

The economic and cultural rise of parts of the ʿāmma due to the particular economic and infrastructural conditions of the Mamluk era fostered the emergence of new intermediate levels of literature that were situated between the literature of the elite and that of the utterly ignorant and unlettered populace, between the Arabic koiné (al-ʿarabīya al-fuṣḥā) and the local dialects (ʿāmmīya-s), between written and oral composition, performance and transmission. The paper proposes to analyze the composition of three Mamluk adab-encyclopedias and their treatment of poverty and wealth in light of the social milieus of their authors and publics.

Inequality in Income and Wealth in Switzerland from 1970 to 2010

The supposed rise of inequality in income and wealth is a much-discussed issue. Since in a number of industrialized countries a trend towards more inequality was observed over the last decades, it is often assumed that Switzerland has experienced a similar development. Yet, although a variety of studies exists that provide inequality estimates for the Swiss society at different points in time, no conclusive picture of the changes in inequality can be drawn from these studies. For example, recent estimates by the Swiss Federal Statistical Office indicate that – against expectations – inequality in disposable equivalent-incomes has not risen since the end of the 1990ies, whereas other studies indicate that earnings from employment – especially top salaries – have become more unequal. The reasons for the inconclusive picture are manifold. For example, trends might have been different for different income types and results might strongly depend on the quality of the used data. To close the knowledge gap in inequality research in Switzerland a new Swiss National Science Foundation project by the University of Bern and the Bern University of Applied Sciences has been started in 2013. Individual tax data from cantons will be analyzed along with aggregate data from the Swiss Federal Tax Administration, covering a period from the early 1970ies to the present. The goal is to gain a systematic overview of the development of inequality in income and wealth in Switzerland as a whole and within cantons, and to determine how changes can be explained. In our talk we will present first results from this project.