Stockholder conflicts and dividends

Conflicts of interest between majority and minority stockholders affect a large proportion of firms in any economy, but has received little attention in the empirical literature. We examine the link between the potential for such conflicts and the firm's payout policy on a large sample of Norwegian private firms with controlling stockholders and detailed ownership data. Our evidence shows that the stronger the potential conflict between the stockholders, the higher the proportion of earnings paid out as dividends. This tendency to reduce stockholder conflicts by dividend payout is more pronounced when the minority is diffuse and when a family's majority block is held by a single family member. We also find evidence that a minority-friendly payout policy is associated with higher future minority investment in the firm. These results are consistent with the notion that potential agency costs of ownership are mitigated by dividend policy when the majority stockholder benefits from not exploiting the minority.

Entrepreneur's Overconfidence, Private Benefits and the Market Performance of the Firm

Many firms around the world are managed and partially owned by entrepreneurs. These entrepreneurs hold under diversified portfolios and, therefore, bear idiosyncratic risk in addition to systematic risk. To compensate the additional risk borne, they extract private benefits. In this paper, we analyse how an entrepreneur's overconfidence affects the market performance of the firm, through the channel of private benefits. We show that two dimensions of overconfidence, namely overestimation of future cash-flows and underestimation of idiosyncratic risk (called miscalibration), have opposite effects on the private benefits extracted by the entrepreneur. As a consequence, firms managed and partially owned by overconfident entrepreneurs can deliver overperformance or underperformance, depending on the prevalence of overestimation or miscalibration of the beliefs of the entrepreneur.

Vehicle WiFi

El projecte presenta el disseny d'un vehicle a motor elèctric construït sobre el sistema microcontrolador LPC1769 amb comunicacions sense fils via xarxes WiFi i detecció d'obstacles per sonar.

L’elecció del centre en famílies d’origen immigrat a la ciutat de Barcelona

El projecte ha assolit la majoria d’objectius, ajustats a la reducció d'una quarta part de l'import concedit: 1) caracteritzar la transformació del paisatge agro-forestal i urbà a dos municipis de la vall del Congost, La Garriga i Figaró-Montmany, reconstruint amb SIG els mapes d'ús del sòl de 1854, 1949, 1956 i 2005, obtenint per intersecció de cobertes les matrius dels canvis d'ús; i 2) avaluar amb l’índex de connectivitat ecològica l'impacte ambiental d'aquells canvis des del punt de vista de la biodiversitat i la resiliència del paisatges, amb un especial èmfasi en la reforestació induïda per l'abandonament rural i la pèrdua de paisatges en mosaic, en un àmbit més gran pel període 1956-1993-2005. Aquests resultats han permès preparar varis articles per publicar en co-autoría a revistes com Landscape History, Environment and History o Landscape and Urban Planning. Ja és a punt de poder-se lliurar el primer amb el títol de "Looking backwards into a Mediterranean edge environment: Landscape changes and ecological connectivity in El Congost Valley (province of Barcelona, Catalonia) 1850-2005", incloent dos objectius esmentats a la memòria: identificar les principals forces motores d'aquells canvis en el paisatge relacionant els usos del sòl amb les formes d'ordenació del territori, caracteritzar-ne les forces rectores econòmico-socials i el paper jugat per la protecció del Parc Natural del Montseny i els Cingles de Bertí. Els resultats també permetran abordar en el futur altres aspectes, com per exemple estimar el potencial energètic de la biomassa local tot cercant que el seu aprofitament generi sinèrgies territorials positives per a l'ecologia del paisatge amb la recuperació d’una ramaderia extensiva i una agricultura ecològica que facin possible la restauració dels paisatges en mosaic. L'estudi ha pogut incorporar un aspecte inicialment no previst, el cens d'orquídies mediterrànies a Figaró-Montmany elaborat pel naturalista Paul Wilcox.

How does ownership structure invfluence bank risk? Analyzing the role of managerial incentives

This paper analyzes how ownership concentration and managerial incentives influences bank risk for a large sample of US banks over the period 1997-2007. Using 2SLS simultaneous equations models, we show that ownership concentration has a positive total effect on bank risk. This is the result of a positive direct effect, which reflects monitoring and opportunistic behavior, and a negative indirect effect, which works through the design of managerial incentive contracts and reflects shareholder preferences toward risk. Large shareholders reduce bank risk by reducing the sensitivity of CEO wealth to stock volatility (Vega) and by increasing the CEO pay-performance sensitivity (Delta). In addition, we show that the direct and indirect effect of ownership concentration on bank risk depends on the type of the largest shareholder (a family, a bank, a corporation or an institutional investor), as well as, on the total shareholding held by each type as a group. Our results suggest that the positive relation between ownership concentration and risk is not the result of preferences towards more risk. Rather, they point at opportunistic behavior of large shareholders.

Improving the organisation and commercialisation of small coffee and cocoa producers in the Northern Amazon Region of Ecuador

Coffee and cocoa represent the main sources of income for small farmers in the Northern Amazon Region of Ecuador. The provinces of Orellana and Sucumbios, as border areas, have benefited from investments made by many public and private institutions. Many of the projects carried out in the area have been aimed at energising the production of coffee and cocoa, strengthening the producers’ associations and providing commercialisation infrastructure. Improving the quality of life of this population threatened by poverty and high migration flows mainly from Colombia is a significant challenge. This paper presents research highlighting the importance of associative commercialisation to raising income from coffee and cocoa. The research draws on primary information obtained during field work, and from official information from the Ministry of Agriculture. The study presents an overview of current organisational structures, initiatives of associative commercialisation, stockpiling of infrastructure and ownership regimes, as well as estimates for both ‘robusta’ coffee and national cocoa production and income. The analysis of the main constraints presents different alternatives for the implementation of public land policies. These policies are aimed at mitigating the problems associated with the organisational structure of the producers, with processes of commercialisation and with environmental aspects, among others.

Impact of Ownership Structure on the Performance of China’s Feed Mill Sector, April 2005

In the decade of the 1990s, China’s feed sector became increasingly privatized, more feed mills opened, and the scale of operation expanded. Capacity utilization remained low and multi-ministerial supervision was still prevalent, but the feed mill sector showed a positive performance overall, posting a growth rate of 11 percent per year. Profit margin over sales was within allowable rates set by the government of China at 3 to 5 percent. Financial efficiency improved, with a 20 percent quicker turnover of working capital. Average technical efficiency was 0.805, as more efficient feed mills increasingly gained production shares. This study finds evidence that the increasing privatization explains the improved performance of the commercial feed mill sector. The drivers that shaped the feed mill sector in the 1990s have changed with China’s accession to the World Trade Organization. With the new policy regime in place, the study foresees that, assuming an adequate supply of soy meal and an excess capacity in the feed mill sector, it is likely that China will allow corn imports up to the tariff rate quota (TRQ) of 7.2 mmt since the in-quota rate is very low at 1 percent. However, when the TRQ is exceeded, the import duty jumps to a prohibitive out-quota rate of 65 percent. With an import duty for meat of only 10 to 12 percent, China would have a strong incentive to import meat products directly rather than bringing in expensive corn to produce meat domestically. This would be further reinforced if structural transformation in the swine sector would narrow the cost differential between domestic and imported pork.

Healthy Iowans 2010 Mid-Course Revision, July 2005

In the past century, public health has been credited with adding 25 years to life expectancy by contributing to the decline in illness and injury. Progress has been made, for example, in smoking reduction, infectious disease, and motor vehicle and workplace injuries. Besides its focus on traditional concerns such as clean water and safe food, public health is adapting to meet emerging health problems. Particular troublesome are health threats to youth: teenage pregnancies, violence, substance abuse, sexually transmitted diseases, and other conditions associated with high-risk behaviors. These threats add to burgeoning health care costs. A conservative estimate of $69 billion in medical spending could be averted through the impact of public health strategies aimed at heart disease, stroke, fatal and nonfatal occupational injuries, motor vehicle-related injuries, low birth weight, and violence. These strategies require the collaboration of many groups in the public and private sectors. Collaboration is the bedrock of public health and Healthy Iowans planning. At the core of Healthy Iowans 2000 and its successor, Healthy Iowans 2010, is the idea that all Iowans benefit when stakeholders decide on disease prevention and health promotion strategies and agree to work together on them. These strategies can improve the quality of life and hold down health care costs. The payoff for health promotion and disease prevention is not immediate, but it has long-lasting benefits. The Iowa plan is a companion to the national plan, Healthy People 2010. An initiative to improve the health of Americans, the national plan is the driving force for federal resource allocation for disease prevention and health promotion. The state plan is used in the same way. Both plans have received broad support from Republican and Democratic administrations. Community planners are using the state plan to help assess health needs and craft health improvement plans. Healthy Iowans 2010 was written at an unusual point in history – a new decade, a new century, a new millennium. The introduction was optimistic. “The 21st century,” it says, “promises to add life as well as years through improved health habits coupled with medical advances. Scientists have suggested that if these changes occur, the definition of adulthood will also change. An extraordinary number of people will live fuller, more active lives beyond that expected in the late 20th century.” At the same time, the country has spawned a new generation of health hazards. According to Dr. William Dietz of the Centers for Disease Control and Prevention (CDC), it has replaced “the diseases of deficiency with diseases of excess” (Newsweek, August 2, 1999). New threats, such as childhood overweight, can reverse progress made in the last century. This demands concerted action.

Cooperatives and Contracting in Agriculture: The Case of West Liberty Foods, October 2005

The West Liberty Foods turkey cooperative was formed in 1996 to purchase the assets and assume operations of Louis Rich Foods (an investor-owned processing rm), which, at the time, announced the imminent shutdown of its West Liberty, Iowa, processing facility. We study the creation and performance of this �new generation� cooperative using eld interviews with grower members and company management. We describe changes, before and after the buyout, in the contractual apparatus used for procuring live turkeys, and in the communication requirements, work expectations, and nancial positions of growers. During the private ownership period, most of the inputs (except labor and facilities) were provided by the rm; there was substantial supervision of the growers' actions; growers faced little price and production risk; and growers' equity was due largely to ownership of land and other farm assets. Our interviews reveal that, after cooperative formation, growers were exposed to considerable additional risk; monitoring of growers by the rm was less intensive; grower time and effort commitments to turkey production increased substantially; and a signicant fraction of rm (cooperative) equity came from growers' willingness to leverage their farm and personal assets (and hence indirectly their existing relationships with local lenders). We argue that some of these changes are consistent with a nancial contract where asset pledging and its corollary risk generate higher work effort by growers and a reduction in agency rents. These economies likely compensate for an organizational deadweight loss traditionally associated with cooperative governance.

Motor Vehicle Accident Fatalities for the Week Ending, February 24, 2006

Record of the Fatalities for Motor Vehicle Accidents in Iowa per week.

Motor Vehicle Accident Fatalities for the Week Ending, February 3, 2006

Record of the Fatalities for Motor Vehicle Accidents in Iowa per week.

Motor Vehicle Accident Fatalities for the Week Ending, March 3, 2006

Record of the Fatalities for Motor Vehicle Accidents in Iowa per week.

Motor Vehicle Accident Fatalities for the Week Ending, March 17, 2006

Record of the Fatalities for Motor Vehicle Accidents in Iowa per week.