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

Alternative Theories on Economic Growth and the Co-evolution of Macro-Dynamics and Technological Change: A survey.

This paper aims to propose an approach to endogeneous growth considering the relationship between macro-dynamics and technical change. We draw upon two stream of literature: Cumulative causation and its macroscopic view of economic dynamics, and Evo-lutionary economics and its focus on micro-determinants of technical change. This paper presents a survey of the formal representation of the growth process and identifies the possible bridges between these two approaches. Our claim is that merging these two distinct theories might offer a framework to consider the co-evolution of macro-dynamics and technical change.Economic Growth, Technical Change, Cumulative Causation, Evolutionary Theory.

Cumulative Causation and Evolutionary Micro-Founded Technical Change : A Growth Model with Integrated Economies

We propose to develop in this paper an alternative approach to the New Growth Theory to analyse growth rate divergence among integrated economies. The model presented here considers economic growth as a disequilibrium process. It introduces in a cumulative causation framework, micro-founded process of technical change taking into account elements rooted in evolutionary and Neo-Austrian literature. We then attempt to open the ‘Kaldor-Verdoorn law black-box’ using a micro-level modelling of industrial dynamics. We use this framework to study the nature and sources of growth rate divergence, focusing on the effect of some macro-economic parameters (income elasticities) and of some technological parameters (technological opportunities and absorptive capacities). If the results remain broadly in Kaldorian lines, this framework allows for more subtle considerations of growth rate divergence.

Stochastic assembly of sublithographic nanoscale interfaces

We describe a technique for addressing individual nanoscale wires with microscale control wires without using lithographic-scale processing to define nanoscale dimensions. Such a scheme is necessary to exploit sublithographic nanoscale storage and computational devices. Our technique uses modulation doping to address individual nanowires and self-assembly to organize them into nanoscale-pitch decoder arrays. We show that if coded nanowires are chosen at random from a sufficiently large population, we can ensure that a large fraction of the selected nanowires have unique addresses. For example, we show that N lines can be uniquely addressed over 99% of the time using no more than /spl lceil/2.2log/sub 2/(N)/spl rceil/+11 address wires. We further show a hybrid decoder scheme that only needs to address N=O(W/sub litho-pitch//W/sub nano-pitch/) wires at a time through this stochastic scheme; as a result, the number of unique codes required for the nanowires does not grow with decoder size. We give an O(N/sup 2/) procedure to discover the addresses which are present. We also demonstrate schemes that tolerate the misalignment of nanowires which can occur during the self-assembly process

Employee ownership as a signal of management quality

The employees' decision to become shareholder of the company they work for can be a consequence of employers' matching contribution in company stock. From a behavioral perspective, employees would regard these contributions as an implicit investment advice made by their employer. This paper adopts another viewpoint. Since employee ownership can be used as an entrenchment mechanism, we suggest that employer's matching policy can be considered as an imperfect signal of management quality. This paper suggests that employee ownership can be used by managers to compensate their management skills to the market. It recommends that employee ownership policy should not be influenced by the managers.Employee ownership ; corporate governance ; management entrenchment

The effect of ambipolar diffusion on low-density molecular ISM filaments

The filamentary structure of the molecular interstellar medium and the potential link of this morphology to star formation have been brought into focus recently by high resolution observational surveys. An especially puzzling matter is that local interstellar filaments appear to have the same thickness, independent of their column density. This requires a theoretical understanding of their formation process and the physics that governs their evolution. In this work we explore a scenario in which filaments are dissipative structures of the large-scale interstellar turbulence cascade and ion-neutral friction (also called ambipolar diffusion) is affecting their sizes by preventing small-scale compressions. We employ high-resolution, 3D MHD simulations, performed with the grid code RAMSES, to investigate non-ideal MHD turbulence as a filament formation mechanism. We focus the analysis on the mass and thickness distributions of the resulting filamentary structures. Simulations of both driven and decaying MHD turbulence show that the morphologies of the density and the magnetic field are different when ambipolar diffusion is included in the models. In particular, the densest structures are broader and more massive as an effect of ion-neutral friction and the power spectra of both the velocity and the density steepen at a smaller wavenumber. The comparison between ideal and non-ideal MHD simulations shows that ambipolar diffusion causes a shift of the filament thickness distribution towards higher values. However, none of the distributions exhibit the pronounced peak found in the observed local filaments. Limitations in dynamical range and the absence of self-gravity in these numerical experiments do not allow us to conclude at this time whether this is due to the different filament selection or due to the physics inherent of the filament formation.Comment: A&A accepte