Financial Structure, Managerial Compensation and Monitoring

When a firm has external debt and monitoring by shareholders is essential, managerial bonuses are shown to be an optimal solution. A small managerial bonus linked to firm's performance not only reduces moral hazard between managers and shareholders, but also between creditors and monitoring shareholders. A negative relation between corporate bond yields and managerial bonuses can be predicted. Furthermore, the model shows how higher managerial pay-performance sensitivity goes hand in hand with greater company leverage and lower company diversification. These predictions find some support in the empirical literature.managerial compensation; financial structure; monitoring; diversification.

Solidarity Behind Microfinance

In this paper we analyse the role of peers' solidarity in fostering investment in production in the context of micro?nance. When there is asymmetric information between lenders and borrowers on the use of borrowed funds and loans are not collateralized, there is a high chance that borrowers use loans for current consumption sacrifying productive projects. We study the effect of solidarity in the form of insurance from a network of relatives on borrowers' intertemporal preference for consumption and its impact on myopic behavior. The main result of the model is that solidarity might increase the share of funds devoted to investment but it might also reduce the amount of the loan in equilibrium. This result is in accordance with several features of micro-lending. We test the model using survey data from the World Bank on a sample of households in Bangladesh during the period 1991-1992. Empirical fi?ndings support the predictions of the model.Microfinance, credit rationing, social networks

The Impact of Mergers on the Degree of Competition in the Banking Industry

This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is function also of market structure indicators. We then use the econometric model to evaluate the impact of horizontal mergers among incumbent banks on competition and discuss when, depending on the pre-merger structure of the market and geographic distribution of branches, the merger is anti-competitive. The paper has implications for competition policy as it suggests an applied tool to evaluate the potential anti-competitive impact of mergers.Banking Industry, Competition and Market Structure, Merger Policy

The Impact of Mergers on the Degree of Competition in the Banking Industry

This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is function also of market structure indicators. We then use the econometric model to evaluate the impact of horizontal mergers among incumbent banks on competition and discuss when, depending on the pre-merger structure of the market and geographic distribution of branches, the merger is anti-competitive. The paper has implications for competition policy as it suggests an applied tool to evaluate the potential anti-competitive impact of mergers.

Multiple-bank lending: diversification and free-riding in monitoring

This paper analyses banks' choice between lending to firms in exclusive relationships and sharing financing with other banks in a context where both firms and banks are subject to moral hazard problems, and bank monitoring is essential for financing to take place. Multiple-bank lending is optimal whenever the benefit of greater diversification in terms of higher per-project monitoring dominates the costs of free-riding problem and duplication of efforts. The model predicts a greater use of multiple-bank lending when banks are small relative to the size of investment projects, when firms are less profitable, and when poor financial integration, strict regulation and inefficient judicial systems make monitoring more costly. These results are consistent with some empirical observations concerning small business lending and, to some extent, with the formation of syndicates.

Multiple-bank lending: diversification and free-riding in monitoring

This paper analyzes the optimality of multiple-bank lending, when firms and banks are subject to moral hazard and monitoring is essential. Multiple-bank lending leads to higher per-project monitoring whenever the benefit of greater diversification dominates the costs of free-riding and duplication of effort. The model predicts a greater use of multiple-bank lending when banks are highly leveraged, firms are less profitable and monitoring costs are high. These results are consistent with some empirical observations concerning the use of multiple-bank lending in small and medium business lending.multiple monitors, diversification, free-riding problem, multiple-bank lending.

They, the people. Italian Fascism and the ambivalences of corporative populism

The appeal to the people, however essential in the demagogic choreography which formed its distinctive political liturgy, did not cover the whole extent of Italian fascist politics. Another defining political feature of Italian fascism, the one that was supposed to replace political franchise with an all-encompassing representation of the people in its concrete entirety, was its authoritarian brand of corporative organicism. Corporative ‘people’ was not an indeterminate unity; authoritarian corporatism assumed a structured, organized and de-politicised people, defined by hierarchically arranged social affiliations, and was not trusted to act politically unless firmly governed. In this contribution it is argued that, from the point of view of the conception of the people, leaderistic plebiscitarism and corporative organicism are two sides of the same coin, and resulted in fascist aspirational totalitarian democracy. The twofold – and intrinsically ambiguous - conception of the ‘people’ is examined first in the passive and indeterminate qualities attributed to the Italian people, then in the institutional device conceived to lead it. The resulting twofold paradigm of corporative populism is reviewed with reference to the type put together and popularized by Giuseppe Bottai, of which three different varieties are presented

Close relationships between banks and firms: is it good or bad?

This paper investigates the issues involved in cross-ownership between banks and firms. The idea is that congruity among the parties in control of the bank and the firm allows to save on monitoring costs, but it gives rise to a conflict of interest between on one hand the parties in control of the bank and on the other hand the outside investors, as for example depositors, of the bank. Nevertheless, the paper shows that there are benefits from cross-ownership, whenever the bank involved in the relationship is debt financed and well diversified

Competition for zinc binding in the host-pathogen interaction

Due to its favorable chemical properties, zinc is used as a structural or catalytic cofactor in a very large number of proteins. Despite the apparent abundance of this metal in all cell types, the intracellular pool of loosely bound zinc ions available for biological exchanges is in the picomolar range and nearly all zinc is tightly bound to proteins. In addition, to limit bacterial growth, some zinc-sequestering proteins are produced by eukaryotic hosts in response to infections. Therefore, to grow and multiply in the infected host, bacterial pathogens must produce high affinity zinc importers, such as the ZnuABC transporter which is present in most Gram-negative bacteria. Studies carried in different bacterial species have established that disruption of ZnuABC is usually associated with a remarkable loss of pathogenicity. The critical involvement of zinc in a plethora of metabolic and virulence pathways and the presence of very low number of zinc importers in most bacterial species mark zinc homeostasis as a very promising target for the development of novel antimicrobial strategies