Rent Extraction by Large Shareholders: Evidence Using Dividend Policy in the Czech Republic

Using cross-sectional analysis of corporate dividend policy we show that large shareholders extract rents from firms and expropriate minority shareholders in the weak corporate governance environment of an emerging economy. By comparing dividends paid across varying corporate ownership structures – concentration, type, and domicile of ownership – we quantify these effects and reveal that they are substantial. We find that the target payout ratio for firms with majority ownership is low, but that the presence of a significant minority shareholder increases the target payout ratio and hence precludes a majority owner from extracting rent. In contrast to other studies from developed markets, our unique dataset from the Czech Republic for the period 1996–2003 permits us to take account of endogeneity of ownership.rent extraction, large shareholders, corporate governance, dividend policy

Exotic branes and non-geometric backgrounds

When string/M-theory is compactified to lower dimensions, the U-duality symmetry predicts so-called exotic branes whose higher dimensional origin cannot be explained by the standard string/M-theory branes. We argue that exotic branes can be understood in higher dimensions as non-geometric backgrounds or U-folds, and that they are important for the physics of systems which originally contain no exotic charges, since the supertube effect generically produces such exotic charges. We discuss the implications of exotic backgrounds for black hole microstate (non-)geometries.Comment: 4 pages. v2: journal version. The discussion on "double puff-up" revise

Essays on the interaction between financial development and real economy

Economists disagree about the role of the financial sector in economic growth. My thesis contributes to this discussion. I show that better financial systems do promote productivity growth and that limited access to external finance interacts with product market competition in determining corporate investment. The first chapter "The Effect of Financial Development on Corporate Growth in the EU Single Market" compares within-industry growth rates of similar EU 'single-market' firms facing financial systems of different depth and institutional quality as of 'single-market' inception. Moving from the least to the most developed financial market within the EU boosts firms' annual value-added growth by about three percentage points. Our results also suggest that the growth gap due to initially under-developed financial systems wais closed by 2003. In the second chapter "Which Firms Benefit More from Financial Development." we test whether more developed financial systems foster corporate growth through tackling market frictions proxied by firm size and age. Our main finding is that more developed financial systems are able to overcome the relative opaqueness of younger firms. We also find that freshly incorporated firms in less financially developed countries have unusually high shares of equity capital in total assets. The two chapters provide evidence that limited access to external finance affects corporate structures and hinders economic growth. In the last chapter "The Effect of Credit Rationing on the Shape of the Competition-Innovation Relationship" I study how financial constraints affect innovation activity. The novel theoretical results derive from an analysis of the interaction between the incentive effect of competition on innovation and the effect competition has on the degree of credit rationing. I find that the negative effect of financial constraints on firm- and aggregate-level R&D investment is most pronounced at both high and low levels of competition. These predictions are supported by empirical evidence

The long-term effects of foreign institutional ownership

Funding: European Research Council (ERC); Batten Institute; Batten Institute; Richard A. Mayo Center for Asset Management at Darden School of Business; Social Sciences and Humanities Research Council (SSHRC) of Canada. "Close funding text: the authors acknowledge financial support from the European Research Council (ERC), the Batten Institute and the Richard A. Mayo Center for Asset Management at the Darden School of Business, and the Social Sciences and Humanities Research Council (SSHRC) of Canada."This paper challenges the view that foreign investors lead firms to adopt a short-term orientation and forgo long-term investment. We find instead that greater foreign institutional ownership fosters long-term investment in fixed capital, innovation, and human capital. Foreign institutional presence also leads to a higher innovation productivity. We identify these effects by exploiting the exogenous variation in foreign institutional ownership that follows the addition of a stock to the MSCI World index. Our findings are explained by the disciplinary role of foreign institutions on lazy managers worldwide.authorsversionpublishe

Non-supersymmetric extremal multicenter black holes with superpotentials

Using the superpotential approach we generalize Denef's method of deriving and solving first-order equations describing multicenter extremal black holes in four-dimensional N = 2 supergravity to allow non-supersymmetric solutions. We illustrate the general results with an explicit example of the stu model.Comment: 17 pages, v2: some clarifications adde

A bound on the entropy of supergravity?

We determine, in two independent ways, the number of BPS quantum states arising from supergravity degrees of freedom in a system with fixed total D4D0 charge. First, we count states generated by quantizing the spacetime degrees of freedom of 'entropyless' multicentered solutions consisting of anti-D0-branes bound to a D6-anti-D6 pair. Second, we determine the number of free supergravity excitations of the corresponding AdS_3 geometry with the same total charge. We find that, although these two approaches yield a priori different sets of states, the leading degeneracies in a large charge expansion are equal to each other and that, furthermore, the number of such states is parametrically smaller than that arising from the D4D0 black hole's entropy. This strongly suggests that supergravity alone is not sufficient to capture all degrees of freedom of large supersymmetric black holes. Comparing the free supergravity calculation to that of the D6-anti-D6-D0 system we find that the bound on the free spectrum imposed by the stringy exclusion principle (a unitarity bound in the dual CFT) seems to be captured in the dynamics of the fully interacting but classcial supergravity equations of motion.Comment: 33 pages, 5 figure

On the Integrability of large N Plane-Wave Matrix Theory

We show the three-loop integrability of large N plane-wave matrix theory in a subsector of states comprised of two complex light scalar fields. This is done by diagonalizing the theory's Hamiltonian in perturbation theory and taking the large N limit. At one-loop level the result is known to be equal to the Heisenberg spin-1/2 chain, which is a well-known integrable system. Here, integrability implies the existence of hidden conserved charges and results in a degeneracy of parity pairs in the spectrum. In order to confirm integrability at higher loops, we show that this degeneracy is not lifted and that (corrected) conserved charges exist. Plane-wave matrix theory is intricately connected to N=4 Super Yang-Mills, as it arises as a consistent reduction of the gauge theory on a three-sphere. We find that after appropriately renormalizing the mass parameter of the plane-wave matrix theory the effective Hamiltonian is identical to the dilatation operator of N=4 Super Yang-Mills theory in the considered subsector. Our results therefore represent a strong support for the conjectured three-loop integrability of planar N=4 SYM and are in disagreement with a recent dual string theory finding. Finally, we study the stability of the large N integrability against nonsupersymmetric deformations of the model.Comment: 20 pages, 1 figur

A fixed point formula for the index of multi-centered N=2 black holes

We propose a formula for computing the (moduli-dependent) contribution of multi-centered solutions to the total BPS index in terms of the (moduli-independent) indices associated to single-centered solutions. The main tool in our analysis is the computation of the refined index Tr(-y)^{2J_3} of configurational degrees of freedom of multi-centered BPS black hole solutions in N=2 supergravity by localization methods. When the charges carried by the centers do not allow for scaling solutions (i.e. solutions where a subset of the centers can come arbitrarily close to each other), the phase space of classical BPS solutions is compact and the refined index localizes to a finite set of isolated fixed points under rotations, corresponding to collinear solutions. When the charges allow for scaling solutions, the phase space is non-compact but appears to admit a compactification with finite volume and additional non-isolated fixed points. We give a prescription for determining the contributions of these fixed submanifolds by means of a `minimal modification hypothesis', which we prove in the special case of dipole halo configurations.Comment: 61 pages, 3 figure

General Supersymmetric Solutions of Five-Dimensional Supergravity

The classification of 1/4-supersymmetric solutions of five dimensional gauged supergravity coupled to arbitrary many abelian vector multiplets, which was initiated in hep-th/0401129, is completed. The structure of all solutions for which the Killing vector constructed from the Killing spinor is null is investigated in both the gauged and the ungauged theories and some new solutions are constructed.Comment: 24 pages, references added, uses JHEP3.cl

First-order flows and stabilisation equations for non-BPS extremal black holes

We derive a generalised form of flow equations for extremal static and rotating non-BPS black holes in four-dimensional ungauged N = 2 supergravity coupled to vector multiplets. For particular charge vectors, we give stabilisation equations for the scalars, analogous to the BPS case, describing full known solutions. Based on this, we propose a generic ansatz for the stabilisation equations, which surprisingly includes ratios of harmonic functions.Comment: 27 pages; v2: presentation improved and references added as in the published versio