Capital Structure, Corporate Taxation and Firm Age

This paper analyzes the relationship between capital structure, corporate taxation and firm age. We adapt a standard model of optimal capital structure choice under corporate taxation, focusing on the financing and investment decisions a young firm is typically faced with. Our model allows to derive testable hypotheses about the relationship between corporate taxation, a firm's age and its debt to asset ratio. To test these hypotheses empirically, we use a cross-section of 405,000 firms from 35 European countries and 126 NACE 3-digit industries. In line with previous research, we find that a firm's debt ratio increases with the corporate tax rate. Further, we observe that older firms exhibit smaller debt ratios than their younger counterparts. Finally, consistent with our theoretical expectation, we find a positive interaction effect between corporate taxation and firm age, indicating that the impact of corporate taxation on debt is increasing over a firm's life-time.Corporate taxation; Capital structure; Firm age

Convergence Without Hard Criteria: Does EU Soft Law Affect Domestic Unemployment Protection Schemes?

(VLID)177126

Guidelines and Recommendations for Laboratory Analysis in the Diagnosis and Management of Diabetes Mellitus

Background: Multiple laboratory tests are used to diagnose and manage patients with diabetes mellitus. The quality of the scientific evidence supporting the use of these tests varies substantially. Approach: An expert committee compiled evidence-based recommendations for the use of laboratory testing for patients with diabetes. A new system was developed to grade the overall quality of the evidence and the strength of the recommendations. Draft guidelines were posted on the Internet and presented at the 2007 Arnold O. Beckman Conference. The document was modified in response to oral and written comments, and a revised draft was posted in 2010 and again modified in response to written comments. The National Academy of Clinical Biochemistry and the Evidence-Based Laboratory Medicine Committee of the American Association for Clinical Chemistry jointly reviewed the guidelines, which were accepted after revisions by the Professional Practice Committee and subsequently approved by the Executive Committee of the American Diabetes Association. Content: In addition to long-standing criteria based on measurement of plasma glucose, diabetes can be diagnosed by demonstrating increased blood hemoglobin A$_{1c}$ (HbA$_{1c}$) concentrations. Monitoring of glycemic control is performed by self-monitoring of plasma or blood glucose with meters and by laboratory analysis of HbA$_{1c}$. The potential roles of noninvasive glucose monitoring, genetic testing, and measurement of autoantibodies, urine albumin, insulin, proinsulin, C-peptide, and other analytes are addressed. Summary: The guidelines provide specific recommendations that are based on published data or derived from expert consensus. Several analytes have minimal clinical value at present, and their measurement is not recommended

Trading strategies and trading profits in experimental asset markets with cumulative information

We study the use of trading strategies and their profitability in experimental asset markets with asymmetrically informed traders. We find that insiders make most of their profits from trades which are initiated by their limit orders -- especially at the beginning of a period and when the change in their fundamental information is large. The average informed lose most with market orders and their losses are highest at the beginning of a period when they can be exploited by insiders. Uninformed traders act as liquidity providers. They place the highest number of limit orders and end up with the market return.Asymmetric information; liquidity; trading strategies; limit order markets; experiment

Bubble or no Bubble - The Impact of Market Model on the Formation of Price Bubbles in Experimental Asset Markets

For the past two decades a market model introduced by Smith, Suchanek, and Williams (1988, henceforth SSW) has dominated experimental research on financial markets. In SSW the fundamental value of the traded asset is determined by the expected value of a finite stream of dividend payments. This setup implies a deterministically falling fundamental value with a predetermined end of the life-span of the asset and extremely high dividend-payouts. We present a new market model in which we implement the fundamental value by adopting a random walk process. Compared to SSW-markets, prices in the new markets (SAVE) are more efficient and end-of-experiment imbalances common in SSW-markets are not observed. Our results demonstrate, that implicit features of the SSW market model contribute to bubble formation.Experimental economics, asset market, bubble, market efficiency