Although dealership government and equity securities have, on the surface, similar market structures, the author demonstrates that some subtle differences exist between them that are likely to significantly affect the way market-makers trade, and as such have an impact on the liquidity that they provide. The author reviews some of the concepts recently introduced in the literature, examining mu...

Separation between CEO and Chairman of the Board is typically viewed as evidence of good corporate governance. Surprisingly, the literature has failed so far to uncover any significant relation between CEO/Chairman duality and firm performance. By distinguishing between periods with and without CEO turnover, we empirically identify two offsetting effects: the correlation between duality and per...

We study firms’investment in internal control to reduce accounting manipulation. We first show the peer pressure for manipulation: one manager manipulates more if he suspects that reports of peer firms are more likely to be manipulated. As a result, one firm’s investment in internal control has a positive externality on peer firms. It reduces its own manager’s manipulation, which, in turn, miti...

What motivates investors to hold American Depositary Receipts (ADRs) rather than the underlying stock of U.S. listed foreign firms? We analyze the investment allocation decision of actively-managed emerging market mutual fund managers. Although legal provisions are typically assumed to affect ADR and its underlying domestic shares equally, investors holding ADRs may have a higher level of legal...

the effect of business regulations on economic growth (a selection of developed and developing countries) mohammad-hossein hosseinzade bahreini assistant professor of economics,ferdowsi university of mashhad mohammad ali falahi associate professor of economics,ferdowsi university of mashhad fatemeh erfany jahanshahi m.sc. in economics abstract in this research, the relationship between business...

Borrower-based macroprudential (MP) policies - such as caps on loan-to-value (LTV) ratios and debt-service-to-income (DSTI) limits contain the build-up of systemic risk by reducing probability conditional impact a crisis. While LTV/DSTI can increase inequality at introduction, they dampen in under adverse macroeconomic conditions. The relative size these opposing effects is an empirical questio...

Credit spreads display occasional spikes and are more strongly countercyclical in times of elevated financial stress. Financial crises extreme cases this nonlinear behavior, featuring skyrocketing credit spreads, sharp losses bank equity, deep recessions. We develop estimate a macroeconomic model with banking sector which banks’ leverage constraints occasionally binding equity issuance is endog...