How Do Internal Capital Markets Work? Evidence from the Great Recession

We study the inner workings of internal capital markets during the 2008-9 recession using a unique dataset of loans between business-group firms in an emerging market. Intra-group loans increase quickly during the recession. Firms that are more central in the ownership network simultaneously increase lending and borrowing. Acting like simple intermediaries, central firms do not increase net lending. Our results imply that formal control rights are essential for intermediation in internal capital markets, particularly during distress. In line with previous results on winner-picking, receivers of intra-group loans are high-Q, financiallyconstrained firms, which also perform significantly better than providers during the recession

Phonon spectra of Cu₆PS₅Br superionic ferroelastic: experimental and theoretical studies

The anomalous temperature behavior of the Raman scattering bands at superionic phase transition of Cu₆PS₅Br is revealed. Using density functional perturbation theory within local density approximation, ab initio long-wavelength phonons have been obtained for high-symmetry cubic structure. In the calculated phonon spectrum two unstable modes indicate the experimentally observed sequence of ferroelastic and superionic phase transitions.Експериментально виявлено аномальну температурну поведiнку пiкiв раманiвського розсіювання свiтла при суперiонному фазовому переходi в Cu₆PS₅Br. Для високосиметричної кубiчної фази теоретично розраховано першопринципнi частоти довгохвильових фононiв з використанням теорії збурень функцiонала густини у локальному наближеннi. У фононному спектрi спостерiгаються дві нестабiльнi моди, якi вказують на експериментально спостережувану послiдовнiсть сегнетоеластичного i суперiонного фазових переходiв

Raman scattering studies of composites based on Cu₆PS₅X (X = I, Br) superionic nanocrystals

Composites were prepared by mixing Cu₆PS₅X (X = I, Br) nanocrystalline powders obtained by ball milling with different polymers. The average nanocrystal size was estimated from X-ray diffraction; the composites were studied by scanning electron microscopy. Phonon spectra of nanocomposites with different polymer matrices, size and concentration of nanocrystals were studied using Raman spectroscopy. It has been revealed that the surface-to-bulk phonon integrated intensity ratio strongly varies with the type of polymer matrix, average grain size and concentration of nanocrystal

Multiple large shareholders, excess leverage and tunneling: evidence from an emerging market

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.Manuscript Type: Empirical Research Question/Issue: Past empirical efforts in corporate governance have examined the effects of large shareholders with the excess control rights on tunneling activities. However, no study has systematically investigated the effects of multiple large shareholders on excess leverage policies and tunneling in an emerging country environment where minority rights protection is weak. In this study, we examine the role of multiple large shareholders and the effects of control contestability of multiple large shareholders on firm excess leverage decision and tunneling by controlling shareholders. Research Findings/Insights: Using a sample of 2,341 Chinese firms for the years 2001 to 2013, we document that the contestability of multiple non-controlling large shareholders relative to controlling shareholders reduces the adoption of excess leverage policies, tunneling and enhances capital investment. Another intriguing finding is that the government as a controlling shareholder exerts significant influence and reduces the monitoring effectiveness of multiple larger shareholders. Theoretical/Academic Implications: By addressing the role of multiple large shareholders on excess leverage decisions, this study makes an important contribution to the corporate governance literature. We extend the recent developments in agency theory regarding the role of multiple large shareholders in constraining expropriation of controlling shareholders with excess control rights and their effect on firm leverage decisions. Our results support the theoretical models which indicate that the presence of multiple large shareholders is an important and efficient internal governance mechanism that mitigates a firm’s agency costs, particularly, in an emerging market environment where corporate governance is weak and inadequate to curb tunneling problem. JEL classification: G15; G34; G3

Privatization and business groups: Evidence from the Chicago Boys in Chile

Business groups are the predominant organizational structure in modern Chile. This article tests the long-standing hypothesis that the privatization reform implemented by the “Chicago Boys” during the Pinochet regime facilitated the creation of new groups and hence the renovation of the country’s elites. Using new data we find that firms sold during this privatization later became part of new business groups, process aided by an economic crisis that debilitated traditional elites. Moreover, some firms were bought by Pinochet’s allies and were later used as providers of capital within groups. We conclude that privatizations can empower outsiders to replace business elites

The Korea discount and chaebols

Finance practitioners frequently claim that stocks of Korean firms are undervalued and trade at a discount relative to foreign firms. This phenomenon is commonly called «the Korea discount». It is based on anecdotal evidence comparing either the price- earnings ratios of different market indexes or those of different individual stocks. This paper provides empirical evidence on the existence of such a discount using a large sample of stocks from 28 countries over the period 2002-2016. We find that Korean stocks have significantly lower price-earnings ratios than their global peers. We also investigate the role of large business groups called chaebols, which are often considered to be the main cause of the discount because of their poor corporate governance. Our findings show that it is not the case

Essays in Dynamic Corporate Finance

This dissertation consists of two essays on dynamic models in corporate finance. In the first essay, I estimate a dynamic investment model for business groups in which their pyramidal ownership structure generates an agency problem between controlling and minority shareholders. In the model, the controlling shareholder can transfer resources across group firms using intra-group loans, allowing risk sharing and reducing the need for external financing. In a sample of Chilean business groups, I perform counterfactual experiments in which I compare group-affiliated firms with equivalent non-group firms. I find that for the average business group the incremental value of the internal capital market represents roughly 1.5-1.7% of the firm equity value. Although the controlling shareholder gets a larger portion of the value gains, minority shareholders also benefit from these internal transactions. In the second essay, we estimate a structural model of investment for a firm exposed to output price risk, which can be hedged using derivatives. In our model, we endogenize the cost of debt, which is affected by the firm's risk management policies. Hedging, therefore, creates value for the company by reducing the cost of debt. Additionally, since hedging has the effect of reducing the variability of the cash flows generated by the firm, it also creates value by exploiting convex costs and concave payoffs in our model. Using a dataset with detailed information on the derivative positions of upstream oil and gas firms during 1996-2013, we estimate the model via the simulated method of moments (SMM). We estimate that the value of hedging is 7.67% of assets. Roughly, half of this value is a result of the effect of hedging on the cost of debt, the rest of the value being related with other non-linearities in the model. Comparative statics exercises suggest that the variables that most affect hedging policies are the volatility of internal cash flows, capital adjustment costs, costs of equity financing, and the risk premium/discount in the derivatives market. Consequently, the value created by hedging is also most sensitive to these variables, and especially to the cost of equity financing and the risk premium/discount in the derivatives market.Finance, Department o

Correction of Disorders of Grapho-Motor Writing Skills in Children of Primary School Age

Еволюція писемного мовлення, окрім загальної потреби в передачі повідомлення обумовлена достатнім ускладненням когнітивних здібностей людини і більшою диференціацією її сенсомоторних навичок. Перехід до графічної символізації одиниць звукового малюнку мовлення зробив писемне мовлення гнучким інструментом вираження та передачі мисленнєвої продукції. До п’яти років єдиною доступною дітям графічною формою передачі повідомлень виступає малюнок. Розвиток мовленнєвих форм мислення дозволив звільнити думку від обов’язкового зв’язку з наочними образами. Усе вищезазначене зумовлює актуальність обраної нами теми магістерської роботи, пов’язана з необхідністю розробки і опробування технологій та програм для проведення ефективної роботи з дітьми з порушенням писемного мовлення – дисграфіями. Це і зумовило вибір теми магістерської роботи – «Корекція порушень графо-мотрної навички письма у дітей молодшого шкільного віку».The evolution of written speech, in addition to the general need for message transmission is due to the sufficient complication of human cognitive abilities and greater differentiation of its sensorimotor skills. The transition to graphic symbolization of units of sound image of speech has made written speech a flexible tool for expression and transmission of thought products. Up to the age of five, the only graphic form of communication available to children is drawing. The development of verbal forms of thinking has freed the mind from the obligatory connection with visual images. All of the above determines the relevance of our chosen topic of the master's thesis, related to the need to develop and test technologies and programs for effective work with children with speech disorders - dysgraphia. This led to the choice of the topic of the master's thesis - "Correction of disorders of grapho-motor skills of writing in children of primary school age.

Overlapping Networks of Credit and Control

Business groups are networks of firms connected by ownership links. We study the reaction of these networks to the 2008-9 crisis using a unique dataset of Chilean intra-group loans. Internal credit increases swiftly during the crisis. Firms that are more central in the ownership network simultaneously increase lending and borrowing. Like pure intermediaries, central firms keep net lending relatively constant. Central firms do not experience a significant fall in profitability relative to the average group firm, although receivers of intra-group loans perform significantly better. Our results show that control rights are essential for credit intermediation at times of distress