Geographic Location, Excess Control Rights, and Cash Holdings

We assess the extent to which remotely-located firms are likely to discretionarily accumulate cash rather than distribute it to shareholders. We consider that these firms are less subject to shareholder scrutiny and, thus, will have high agency conflicts as the distance will facilitate the extraction of private benefits. Consistent with our predictions, we find a positive relation between the distance to the main metropolitan area and cash holdings, and this impact is more pronounced when the controlling shareholder has high levels of excess control rights (i.e., separation of cash-flow rights and control rights). Our results hold even after accounting for all control variables, including financial constraints, and suggest that geographic remoteness can be conducive to severe agency problems, particularly when there is a large separation of cash-flow rights and control rights

Corporate cash holdings: causes and consequences

The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer insight into two primary motives to hold cash: precautionary and agency. We first present a stylized model that explores the trade-off in holding cash between these two motives and then examine empirical studies to determine how existing theories are supported by evidence using data from a variety of countries. In addition, we examine the effectiveness of a variety of corporate governance devices in curtailing cash holdings and also the extent to which these devices offer investors' confidence that cash will not be wasted. Finally, we discuss methodological and measurement issues associated with empirical cash holdings studies

The impact of private equity on employment: the consequences of fund country of origin - new evidence from France

This article explores the country of origin effects of private equity investment on employment in France. Using propensity score matching methodology applied to establishment-level survey data, we find that foreign investors are significantly more likely to induce job shedding and employment insecurity than are French investors. As suggested by the literature on comparative capitalism, national differences may persist in conjunction with commonalities and trends in global capitalism

Monitoring Flower Visitation Networks and Interactions between Pairs of Bumble Bees in a Large Outdoor Flight Cage

This research was supported by a combined grant from the Wellcome Trust, the Biotechnology and Biological Sciences Research Council, and the Engineering and Physical Sciences Research Council (BB/F52765X/1). While writing, ML was supported by the IDEX of the Federal University of Toulouse (Starting and Emergence grants), the Fyssen foundation and the CNRS. NER was supported as the Rebanks Family Chair in Pollinator Conservation by The W. Garfield Weston Foundation. LC was supported by ERC Advanced Grant SpaceRadarPollinator and by a Royal Society Wolfson Research Merit Award

Outcome of crisis intervention for borderline personality disorder and post traumatic stress disorder: a model for modification of the mechanism of disorder in complex post traumatic syndromes

<p>Abstract</p> <p>Background</p> <p>This study investigates the outcome of crisis intervention for chronic post traumatic disorders with a model based on the theory that such crises manifest trauma in the present. The sufferer's behavior is in response to the current perception of dependency and entrapment in a mistrusted relationship. The mechanism of disorder is the sufferer's activity, which aims to either prove or disprove the perception of entrapment, but, instead, elicits more semblances of it in a circular manner. Patients have reasons to keep such activity private from therapy and are barely aware of it as the source of their symptoms.</p> <p>Methods</p> <p>The hypothesis is that the experimental intervention will reduce symptoms broadly within 8 to 24 h from initiation of treatment, compared to treatment as usual. The experimental intervention sidesteps other symptoms to engage patients in testing the trustworthiness of the troubled relationship with closure, thus ending the circularity of their own ways. The study compares 32 experimental subjects with 26 controls at similar crisis stabilization units.</p> <p>Results</p> <p>The results of the Brief Psychiatric Rating Scale (BPRS) supported the hypothesis (both in total score and for four of five subscales), as did results with Client Observation, a pilot instrument designed specifically for the circular behavior targeted by the experimental intervention. Results were mostly non-significant from two instruments of patient self-observation, which provided retrospective pretreatment scores.</p> <p>Conclusions</p> <p>The discussion envisions further steps to ascertain that this broad reduction of symptoms ensues from the singular correction that distinguishes the experimental intervention.</p> <p>Trial registration</p> <p>Protocol Registration System NCT00269139. The PRS URL is <url>https://register.clinicaltrials.gov</url></p

Does Bankruptcy Law Improve the Fate of Distressed Firms? The Role of Credit Channels

Growing financial failure at firm-level can have serious consequences for banks in terms of rising non-performing assets, in the absence of a strong bankruptcy system. Such a scenario in India made its dysfunctional insolvency system to be reformed, introducing the new Insolvency and Bankruptcy Code (IBC) in 2016. Using a panel of 33,845 Indian firms over the period of 2008-2019 and by employing a difference-in-differences approach, we investigate how the IBC has supported financially distressed firms in mitigating their intrinsic vulnerability during the post-IBC period, compared to their non-distressed counterparts. We find that through an expanded credit availability and a lower cost of debt financing during the post-IBC period, distressed firms are able to improve their performance relative to non-distressed firms. Furthermore, we provide evidence that the benefits stemming from the implementation of the IBC policy are more prominent for those financially distressed firms that are larger, younger and more collateralized. Our results are robust to a battery of tests and identification strategies. Our conclusions are relevant in contributing to the current academic and policy debates on safeguarding and preserving business performance and continuity under stressed scenarios

A model of corporate liquidity

We study a continuous time model of a levered firm with fixed assets generating a cash flow which fluctuates with business conditions. Since external finance is costly, the firm holds a liquid (cash) reserve to help survive periods of poor business conditions. Holding liquid assets inside the firm is costly as some of the return on such assets is dissipated due to agency problems. We solve for the firms optimal dividend, share issuance, and liquid asset holding policies. The firm optimally targets a level of liquid assets which is a non-monotonic function of business conditions. In good times, the firm does not need a high liquidity reserve, but as conditions deteriorate, it will target higher reserve. In very poor conditions, the firm will declare bankruptcy, usually after it has depleted its liquidity reserve. Our model can predict liquidity holdings, leverage ratios, yield spreads, expected default probabilities, expected loss given default and equity volatilities all in line with market experience. We apply the model to examine agency conflicts associated with the liquidity re-serve, and some associated debt covenants. We see that a restrictive covenant applied to the liquidity reserve will often enhance the debt value as well as the equity value