The mechanism design approach to monetary theory is the search for fruitful settings or environments in which something that resembles monetary trade actually accomplishes something— or, in Hahn’s [7] terminology, in which money is essential. Fruitfulness means that the settings provide new insights about puzzling observations and policy questions. The search for settings in which money is esse...

Investors use the company value as one of benchmarks in investing capital since is generated from share price with basis performance and public assessment on that performance. The can be measured by Price Earning Ratio (PER), Book Value (PBV), Tobin's Q. selected this research its measurement. subjects were technology-based companies listed Indonesian stock exchange. From data obtained, it was ...

We consider the optimal contract between an entrepreneur and investors in a single-period model when both parties have limited liability, are risk-neutral toward cash flow risk, and are ambiguity-averse. Ambiguity aversion is modeled by multiplier preferences for robustness toward model uncertainty, as in Hansen and Sargent (2001). Efficient ambiguity-sharing implies that the first-best contrac...

Furthermore, efficient cash management is expected to significantly improve both the profitability and growth of a company. As a result of globalisation and the competitive environment, companies are seeking more sophisticated cash management solutions and focusing on standardised processes and strengthening internal controls, which will lead to a higher degree of centralisation of cash managem...

The literature on the Japanese Horizontal Keiretsu, or Main Bank System, is divided on the real effects of bank dependence on firm performance. This paper presents evidence on this issue for the 1980’s and 1990’s using a large sample of Japanese manufacturing firms. Using the eligibility criteria for domestic bond issues that were in place in the 1980’s as a firm sorting criteria, I find that i...

In this paper, we model cash flow and consumption growth rates as a vectorautoregression (VAR), from which we measure the response of cash flow growth to consumption shocks. As the appropriate cash flow proxy is not unambiguous, nor likely to be measured without error, we consider three alternatives for portfolio cash flows: cash dividends, dividends plus repurchases and corporate earnings. We ...

We study how firms engaged in both R&D and fixed investment manage liquidity and adjust real investment during the recent financial crisis. Among firms with positive R&D expenditures, cuts to fixed investment in the crisis are typically far more severe than cuts to R&D. These firms allocate cash reserves to buffer R&D but do not use cash to protect fixed investment. Some firms appear to go so f...

Agency problems are an important determinant of corporate cash holdings. For a sample of more than 11,000 firms from 45 countries, we find that corporations in countries where shareholders rights are not well protected hold up to twice as much cash as corporations in countries with good shareholder protection. In addition, when shareholder protection is poor, factors that generally drive the ne...

For as long as anyone remembers non-life insurance companies have used the so called chain ladder method to reserve for outstanding liabilities. When historical payments of claims are used as observations then chain ladder can be understood as estimating a multiplicative model. In most non-life insurance companies a mixture of paid data and expert knowledge, incurred data, is used as observatio...