A Test of the International Term Structure of Interest Rates: The United States-Canadian Experience

A new theory of the term structure of interest rates for small open economies has been developed in which a small country with internationally integrated capital markets will have its domestic financial markets dominated by international influences. The international theory of the term structure of interest rates demonstrates how a foreign financial disturbance will directly affect the price and output channels. We employ univariate and multivariate time series analysis to Canada and the United States to test the imported term structure of interest rates hypothesis. We do not find evidence to support the assumption of proportionality between the countries\u27 term structures

Corporate financial policy and R and D management

The optimizton of efficient portofolios

ESG and Expected Returns on Equities: The Case of Environmental Ratings

Using long-standing models for expected returns of US equities, we show that firm environmental ratings interact with those forecasted returns and produce excess returns both unconditionally and conditionally. Well-known factor models subsume neither environmental-related return differentials nor expected return premia from those scores and models. In addition, combining information from both inputs—expected return models and economic, social, and governance (ESG) information—may provide an advantage in selecting investments. For financial fiduciaries, this notion shifts the conversation about ESG reflecting only constraints to one of an expanded information and possibly investment opportunity set

An Econometric Analysis of Energy Financing

This study examines the interdependencies of the dividend, investment, liquidity, and financing decisions of public utility firms during the 1974-1979 period and develops a multiple-criteria financial planning model of a public utility firm. The evidence on the perfect markets hypothesis that the dividend, investment, and new debt decisions of firms are interdependent is mixed. The perfect markets hypothesis is tested using a sample of public utility firms because utility firms pay very high dividends (relative to stock prices) and engage in large capital expenditures (relative to assets) compared with manufacturing firms.