Does the stock market react to unsolicited ratings?

This paper investigates whether the stock market reacts to unsolicited ratings for a sample of S&P rated firms from January 1996 to December 2005. We first analyze the stock market reaction associated with the assignment of an initial unsolicited rating. We find evidence that this reaction is negative and particularly accentuated for Japanese firms. A comparison between S&P’s initial unsolicited ratings with previously published ratings of two Japanese rating agencies for a Japanese subsample shows that ratings assigned by S&P are systematically worse. Further, we find that the stock market does not react to the transition from an unsolicited to a solicited rating. Comparison of the upgrades in the sample with a matched-sample of upgrades of solicited ratings reveals that the price reactions are no different. In addition, abnormal returns are worse for firms whose rating remained unchanged after the solicitation compared to those for upgraded firms. Finally, we find that Japanese firms are less likely to receive an upgrade. Our findings suggest that unsolicited ratings are biased downwards, that the capital market therefore expects upgrades of formerly unsolicited ratings and punishes firms whose ratings remain unchanged. All these effects seem to be more pronounced for Japanese firms

How does stock market volatility react to oil shocks?

We study the impact of oil price shocks on the U.S. stock market volatility. We jointly analyze three different structural oil market shocks (i.e., aggregate demand, oil supply, and oil-specific demand shocks) and stock market volatility using a structural vector autoregressive model. Identification is achieved by assuming that the price of crude oil reacts to stock market volatility only with delay. This implies that innovations to the price of crude oil are not strictly exogenous, but predetermined with respect to the stock market. We show that volatility responds significantly to oil price shocks caused by unexpected changes in aggregate and oil-specific demand, whereas the impact of supply-side shocks is negligible

Do markets react to regulatory information?

Stock market ; Bonds ; Stocks

Understanding the New Reality of Layoffs and Helping Employees Find Solutions to Cope

KEY FINDINGS · In general, job tenure in the United States has shortened significantly over recent decades, particularly for relatively older male workers. · Stock prices, which used to react negatively to job loss announcements, began to react less negatively in the recent past, and now tend to react slightly positively. · CEO pay is correlated with layoffs, but, when company size is controlled for, there is no relationship between CEO pay and layoffs. · Laid-off workers are less well off than in the past, in terms of subsequent wages, reemployment, and health. · While there are some alternatives to layoffs, firms tend not to use them

Who Engages in Water Scarcity Conflicts? A Field Experiment with Irrigators in Semi-arid Africa

Does water scarcity induce conflict? And who would engage in a water scarcity conflict? In this paper we look for evidence of the relation between water scarcity and conflictive behavior. With a framed field experiment conducted with smallholder irrigators from semi-arid Tanzania that replicates appropriation from an occasionally scarce common water flow we assess what type of water users is more inclined to react in conflictive way to scarcity. On average, water scarcity induces selfish appropriation behavior in the experiment which is regarded as conflictive in the Tanzanian irrigator communities where strong noncompetition norms regulate irrigation water distribution. But not all react to water scarcity in the same way. Poor, marginalized, dissocialized irrigators with low human capital and with higher stakes are most likely to react with conflictive appropriation behavior to water scarcity. Viewed from a political ecology perspective we conclude that circumstances in Tanzania are conducive to resource scarcity conflicts. Water scarcity and water values are increasing, and water governance institutions entail exclusionary elements. Moreover, a higher likelihood to react in a conflictive way to water scarcity coincides with real economic and political inequalities which could form a basis for mobilization for more violent ways of competing for scarce resources

Amorphous metallic films in silicon metallization systems

The general objective was to determine the potential of amorphous metallic thin films as a means of improving the stability of metallic contacts to a silicon substrate. The specific objective pursued was to determine the role of nitrogen in the formation and the resulting properties of amorphous thin-film diffusion barriers. Amorphous metallic films are attractive as diffusion barriers because of the low atomic diffusivity in these materials. Previous investigations revealed that in meeting this condition alone, good diffusion barriers are not necessarily obtained, because amorphous films can react with an adjacent medium (e.g., Si, Al) before they recrystallize. In the case of a silicon single-crystalline substrate, correlation exists between the temperature at which an amorphous metallic binary thin film reacts and the temperatures at which the films made of the same two metallic elements react individually. Amorphous binary films made of Zr and W were investigated. Both react with Si individually only at elevated temperatures. It was confirmed that such films react with Si only above 700 C when annealed in vacuum for 30 min. Amorphous W-N films were also investigated. They are more stable as barriers between Al and Si than polycrystalline W. Nitrogen effectively prevents the W-Al reaction that sets in at 500 C with polycrystalline W

Crop Prices React to Late Season Weather and Export Activity

published or submitted for publicationnot peer reviewe