Do Macroeconomic Announcements Cause Asymmetric Volatility

multivariate GARCH;volatility;macroeconomics;garch models;stock markets;bond markets

Insider Trading, Option Exercises and Private Benefits of Control (Revision of DP 2010-32)

We investigate patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. Listed firms in the Netherlands have a long tradition of employing many anti-shareholder mechanisms limiting shareholders rights. Our results imply that insider transactions are more profitable at firms where shareholder rights are not restricted by anti-shareholder mechanisms. This finding goes against the monitoring hypothesis which states that more shareholder orientation and stronger blockholders would reduce the gains from insider trading. We show robust support for the substitution hypothesis as insiders of firms which effectively curtail shareholder rights enjoy valuable private benefits of control in lieu of engaging in insider trading to exploit their position.insider trading;management stock options;timing by insiders;corporate governance;anti-shareholder mechanisms;anti-takeover mechanisms

The Impact of Firm and Industry Characteristics on Small Firms' Capital Structure: Evidence from Dutch Panel Data

We investigate small firms’ capital structure, employing a proprietary database containing financial statements of Dutch small and medium-sized enterprises (SMEs) from 2003 to 2005. We find that the capital structure decision of Dutch SMEs is consistent with the pecking order theory: SMEs use profits to reduce their debt level, and growing firms increase their debt position since they need more funds. Furthermore, we document that profits reduce in particular short term debt, whereas growth increases long term debt. This implies that when internal funds are depleted, long term debt is next in the pecking order. We also find evidence for the maturity matching principle in SME capital structure: long term assets are financed with long term debt, while short term assets are financed with short tem debt. This implies that the maturity structure of debt is an instrument for lenders to deal with problems of asymmetric information. Finally, we find that SME capital structure varies across industries but firm characteristics are more important than industry characteristics.Capital Structure;SMEs;pecking order theory;trade-off theory

Insider Trading, Option Exercises and Private Benefits of Control (Revision of DP 2010-32)

We investigate patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. Listed firms in the Netherlands have a long tradition of employing many anti-shareholder mechanisms limiting shareholders rights. Our results imply that insider transactions are more profitable at firms where shareholder rights are not restricted by anti-shareholder mechanisms. This finding goes against the monitoring hypothesis which states that more shareholder orientation and stronger blockholders would reduce the gains from insider trading. We show robust support for the substitution hypothesis as insiders of firms which effectively curtail shareholder rights enjoy valuable private benefits of control in lieu of engaging in insider trading to exploit their position.

Coexistence and Dynamics of Overconfidence and Strategic Incentives

We present a two-stage model for the decision making process of financial analysts when issuing earnings forecasts. In the first stage, financial analysts perform a fundamental earnings analysis in which they are, potentially, subject to a behavioral bias. In the second stage analysts can adjust their earnings forecast in line with their strategic incentives. The paper analyzes this decision process throughout the forecasting period and explains the underlying drivers. Using quarterly earnings forecasts, we document that throughout the entire forecasting period financial analysts overweight their private information. At the same time, financial analysts behave strategically. They issue initial optimistic forecasts by strategically inflating their forecast. In their last revision, they become pessimistic and strategically deflate their earnings forecast, which creates the possibility of a positiveearnings surprise. This analysis of the dynamics of the decision process provides empirical evidence on the coexistence of overconfidence and strategic incentives.

Active follow-up of patients identified with multidrug-resistant Gram-negative bacteria to discontinue contact precautions and isolation measures

Background: It is essential to refrain from unnecessary isolation measures indicated for patients identified with multidrug-resistant Gram-negative bacteria (MDR-GNB). Aim: To evaluate whether a pro-active follow-up strategy to discontinue isolation measures of patients identified with MDR-GNB (without carbapenemase production) resulted in reduced isolation days during hospitalization, compared to passive follow-up. Methods: A comparison was made between active and passive follow-up strategies over a two-year period after first MDR-GNB identification. Patients could be declared negative after two consecutive negative screening cultures. Active follow-up patients received a questionnaire for screening cultures within six months of MDR-GNB identification. Of the 2208 patients included, 1424 patients (64.5%) underwent passive follow-up and 784 patients (35.5%) underwent active follow-up. Findings: A significantly higher proportion of active follow-up patients who had sufficient (at least two) screening cultures were declared MDR-GNB negative compared to those with passive follow-up; 66.9% vs 20.6% (P &lt; 0.001) for adult patients and 76.0% vs 17.1% (P &lt; 0.001) for paediatric patients. A comparison between active follow-up patients with sufficient versus those with active follow-up but insufficient cultures revealed a reduction of isolation days for paediatric patients (median 10.6 vs 1.6 days; P = 0.031). Though this difference was not statistically significant for adults (median 5.3 vs 4.2 isolation days), there was a valuable decrease in the number of isolation days for both adult and paediatric patients under active follow-up with sufficient (≥2) cultures, indicating clinical relevance. Conclusion: We recommend an active follow-up strategy for patients identified with an MDR-GNB, to prevent further unneeded infection prevention measures.</p