Results 1 - 10 of 333

Agency, information, and corporate investment

by Jeremy C. Stein - STULZ (EDS), HANDBOOK OF THE ECONOMICS OF FINANCE , 2001
"... This essay surveys the body of research that asks how the efficiency of corporate investment is influenced by problems of asymmetric information and agency. I organize the material around two basic questions. First, does the external capital market channel the right amount of money to each firm? Tha ..."
Abstract - Cited by 141 (0 self) - Add to MetaCart
? That is, does the market get across-firm allocations right, so that the marginal return to investment in firm i is the same as the marginal return to investment in firm j? Second, do internal capital markets channel the right amount of money to individual projects within firms? That is, does the internal

Do conglomerate firms allocate resources inefficiently across industries? Theory and evidence

by Vojislav Maksimovic, Gordon Phillips - JOURNAL OF FINANCE , 2002
"... We develop a profit-maximizing neoclassical model of optimal firm size and growth across different industries based on differences in industry fundamentals and firm productivity. In the model, a conglomerate discount is consistent with profit maximization. The model predicts how conglomerate firms w ..."
Abstract - Cited by 190 (15 self) - Add to MetaCart
will allocate resources across divisions over the business cycle and how their responses to industry shocks will differ from those of single-segment firms. Using plant level data, we find that growth and investment of conglomerate and single-segment firms is related to fundamental industry factors

Financial markets and the allocation of capital

by Jeffrey Wurgler , 2000
"... Financial markets appear to improve the allocation of capital. Across 65 countries, those with developed financial sectors increase investment more in their growing industries, and decrease investment more in their declining industries, than those with undeveloped financial sectors. The efficiency o ..."
Abstract - Cited by 216 (1 self) - Add to MetaCart
Financial markets appear to improve the allocation of capital. Across 65 countries, those with developed financial sectors increase investment more in their growing industries, and decrease investment more in their declining industries, than those with undeveloped financial sectors. The efficiency

Luenberger Productivity Indicators: Aggregation Across Firms by

by Southern Illinois, Daniel Primont, R. Färe, D. Primont , 2001
"... In this paper we investigate two approaches to the aggregation of the Luenberger pro-ductivity indicator. Our first approach imposes allocative efficiency of every observed input-output vector with respect to the technologies in every time period. Our sec-ond approach only imposes allocative efficie ..."
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In this paper we investigate two approaches to the aggregation of the Luenberger pro-ductivity indicator. Our first approach imposes allocative efficiency of every observed input-output vector with respect to the technologies in every time period. Our sec-ond approach only imposes allocative

Implementing the Efficient Allocation of Pollution

by John Duggan, Joanne Roberts - AMERICAN ECONOMIC REVIEW , 1999
"... We provide simple mechanisms to implement the efficient allocation of pollution, first assuming complete information across firms and then allowing for incomplete information. Both mechanisms operate by inducing firms to monitor one another, using firms’ reports to determine pollution allotments and ..."
Abstract - Cited by 15 (0 self) - Add to MetaCart
We provide simple mechanisms to implement the efficient allocation of pollution, first assuming complete information across firms and then allowing for incomplete information. Both mechanisms operate by inducing firms to monitor one another, using firms’ reports to determine pollution allotments

The rationality of asset allocation recommendations

by Edwin J. Elton, Martin J. Gruber - Journal of Financial and Quantitative Analysis , 2003
"... examining the reasonableness and accuracy of investment advice. Topics such as earnings estimates, security analysts recommendations, and recommendations for selecting mutual funds have been studied extensively. However, almost no attention has been paid to examining advice about the asset allocatio ..."
Abstract - Cited by 23 (0 self) - Add to MetaCart
allocation decision (the allocation of funds across broad classes of assets). This is surprising because the asset allocation decision has been recognized as a major determinant of return and risk and because of this, advice on the optional allocation decision is provided by most brokerage firms

Pricing and capital allocation in catastrophe insurance

by George Zanjani - Journal of Financial Economics , 2002
"... This paper studies multi-line pricing and capital allocation by insurance companies when solvency matters to consumers, capital is costly to hold, and the average loss is uncertain. In this environment, product quality concerns lead firms to diversify across markets and charge high prices for risk t ..."
Abstract - Cited by 22 (3 self) - Add to MetaCart
This paper studies multi-line pricing and capital allocation by insurance companies when solvency matters to consumers, capital is costly to hold, and the average loss is uncertain. In this environment, product quality concerns lead firms to diversify across markets and charge high prices for risk

Capital Allocation in Financial Firms

by André F. Perold - Journal of Applied Corporate Finance , 2005
"... This paper develops a theory of capital allocation in opaque financial intermediaries. The model endogenizes risk management and capital structure decisions, and it provides a simple setting within which to address questions relating to capital budgeting, performance measurement, and employee compen ..."
Abstract - Cited by 7 (0 self) - Add to MetaCart
rates, and subtracting a deadweight cost of capital that is related to the project’s marginal contribution to firm-wide risk. • Diversification across business units reduces the firm’s deadweight cost of risk capital. The diversified firm thus faces a larger investment opportunity set and can operate

Internal Capital Allocation and Firm Performance

by Ilan Guedj, Jennifer Huang, Johan Sulaeman, The Thank Alex, Er Butler, Amar G, Mark Leary, Darius Miller, Owen Lamont, Gordon Phillips, Mike Roberts, Oleg Rytchkov, Gideon Saar, Zacharias Sautner , 2009
"... Do conglomerate firms have the ability to allocate resources efficiently across business segments? We address this question by comparing the performance of firms that follow passive benchmark strategies in their capital allocation process to those that actively deviate from those benchmarks. Using t ..."
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Do conglomerate firms have the ability to allocate resources efficiently across business segments? We address this question by comparing the performance of firms that follow passive benchmark strategies in their capital allocation process to those that actively deviate from those benchmarks. Using

Capital Allocation by Percentile Layer

by Neil M. Bodoff - Variance , 2009
"... Motivation. Capital allocation can have substantial ramifications upon measuring risk adjusted profitability as well as setting risk loads for pricing. Current allocation methods that emphasize the tail allocate too much capital to extreme events; “capital consumption ” methods, which incorporate re ..."
Abstract - Cited by 2 (0 self) - Add to MetaCart
relative likelihood, tend to allocate insufficient capital to highly unlikely yet extremely severe losses. Method. In this paper I develop a new formulation of the meaning of holding capital equal to the Value at Risk. The new formulation views the total capital of the firm as the sum of many percentile
Results 1 - 10 of 333