Equity Block Transfers in Transition Economies: Evidence from Poland.

This Paper investigates valuation effects of share block transfers and employs agency theory to explain the determinants of block premia. A sample of transactions from Poland is used to measure benefits and costs of ownership concentration. Block premia are found to be substantially lower than in well-developed markets, in spite of the insufficient minority shareholders' protection in transitional economies. Shareholder's opportunities to extract private benefits of control turn out to depend not only on the size of equity stake, but also on the relative power of other block holders. The expropriation threat appears to be most severe in the companies where the free float constitutes a substantial fraction of the shares outstanding. Moreover, the analysis reveals that liquidity costs considerably influence the level of block premia in Poland. Finally, the results document a positive role of the state as an institutional investor in listed companies.

Genetic algorithms with memory- and elitism-based immigrants in dynamic environments

Copyright @ 2008 by the Massachusetts Institute of TechnologyIn recent years the genetic algorithm community has shown a growing interest in studying dynamic optimization problems. Several approaches have been devised. The random immigrants and memory schemes are two major ones. The random immigrants scheme addresses dynamic environments by maintaining the population diversity while the memory scheme aims to adapt genetic algorithms quickly to new environments by reusing historical information. This paper investigates a hybrid memory and random immigrants scheme, called memory-based immigrants, and a hybrid elitism and random immigrants scheme, called elitism-based immigrants, for genetic algorithms in dynamic environments. In these schemes, the best individual from memory or the elite from the previous generation is retrieved as the base to create immigrants into the population by mutation. This way, not only can diversity be maintained but it is done more efficiently to adapt genetic algorithms to the current environment. Based on a series of systematically constructed dynamic problems, experiments are carried out to compare genetic algorithms with the memory-based and elitism-based immigrants schemes against genetic algorithms with traditional memory and random immigrants schemes and a hybrid memory and multi-population scheme. The sensitivity analysis regarding some key parameters is also carried out. Experimental results show that the memory-based and elitism-based immigrants schemes efficiently improve the performance of genetic algorithms in dynamic environments.This work was supported by the Engineering and Physical Sciences Research Council (EPSRC) of the United Kingdom under Grant EP/E060722/01

Neutralino and gravitino dark matter with low reheating temperature

We examine a scenario in which the reheating temperature $T_R$ after inflation is so low that it is comparable to, or lower than, the freeze out temperature of ordinary WIMPs. In this case the dark matter relic abundance is reduced, thus relaxing the impact of the usually strong constraint coming from the requirement that the universe does not overclose. We first re-examine the dynamics of freezeout during reheating. Next we apply a Bayesian approach to study the parameter space of the MSSM with ten free parameters, the CMSSM and the singlino-dominated regions of the NMSSM. In each case we find dramatic departures from the usually considered regime of high $T_R$, with important implications for direct detection dark matter searches. In the MSSM we examine WIMP mass range up to ~5 TeV, and find regions of bino dark matter over the whole mass range, and of higgsino dark matter with mass over a similar range but starting from the ~1 TeV value of the standard high $T_R$ scenario. We show that the prospects for bino detection strongly depend on $T_R$, while the higgsino is for the most part detectable by future one-tonne detectors. The wino, which is excluded in the standard scenario, becomes allowed again if its mass is roughly above 3.5 TeV, and can be detectable. In the CMSSM, the bino and higgsino mass ranges become more constrained although detection prospects remain similar. In the Next-to-MSSM at low enough $T_R$ wide ranges of singlino-dominated parameter space of the model become cosmologically allowed. We also study the contribution to the DM relic density from direct and cascade decays of the inflaton. Finally, we consider the case of a gravitino as dark matter. We find strong bounds from overclosure and Big Bang Nucleosynthesis, and derive lower limits on $T_R$ which depend on the gravitino mass and on the nature of the lightest ordinary superpartner.Comment: section and references adde

Control Structures and Payout Policy

This paper examines the payout policies of UK firms listed on the London Stock Exchange during the 1990s.It complements the existing literature by analyzing the trends in both dividends and total payouts (including share repurchases).In a dynamic panel data regression setting, we relate target payout ratios to control structure variables.Profitability drives payout decisions of the UK companies, but the presence of strong block holders or block holder coalitions considerably weakens the relationship between corporate earnings and payout dynamics.While the impact of the voting power of shareholders coalitions on payout ratios is found to be always negative, the magnitude of this effect differs across different categories of block holders (i.e. industrial firms, outside individuals, directors, financial institutions).The controlling shareholders appear to trade off the agency problems of free cash flow against the risk of underinvestment, and try to enforce payout policies that optimally balance these two costs.Finally, the paper improves upon some methodological flaws of the recent empirical studies of payout policy.Payout policy;dividend payout;share repurchases;partial adjustment;ownership and control;voting power;Banzhaf power indices;corporate governance;free cash flow;pecking order

The Managerial Labor Market and the Governance Role of Shareholder Control Structures in the UK

We simultaneously analyze two mechanisms of the managerial labor market: CEO turnover and monetary remuneration schemes.Sample selection models and hazard analyses applied to a random sample of 250 firms listed on the London Stock Exchange over a six-year pre-Cadbury period show that managerial remuneration and the termination of labor contracts play an important role in mitigating agency problems between managers and shareholders.We find that both the CEO's industry-adjusted monetary compensation and their replacement are strongly performance-sensitive.Top executive turnover is shown to serve as a disciplinary mechanism for corporate underperformance, whereas the level of monetary compensation rewards good performance.We also investigate whether specific corporate governance mechanisms (different types of blockholders or of boards of directors) have an impact on managerial disciplining or on the pay-for-performance contracts.There is little evidence of outside shareholder monitoring and CEOs with strong voting power successfully resisting replacement irrespective of corporate performance.This case of strong managerial entrenchment is even exacerbated when the CEO also holds the position of chairman of the board.In firms with large outside shareholdings, CEO compensation is lower, but outside shareholder do not impose a stricter performance-related incentive remuneration scheme.When insiders have strong voting power, the CEOs remuneration is lower except when the stock price performance is poor: it seems that when the CEOs wealth resulting from their investment goes down due to decreasing stock prices, the CEOs cash compensation is higher.The presence of a remuneration committee has no impact on remuneration.Finally, we find strong support for the incentive effect-hypothesis of remuneration: CEOs with higher levels of monetary compensation attain better subsequent accounting and stock price-based measures of corporate performance.labour turnover;agency theory;labour market;managers;corporate governance;shareholders;corporate ownership

Axino dark matter with low reheating temperature

We examine axino dark matter in the regime of a low reheating temperature T_R after inflation and taking into account that reheating is a non-instantaneous process. This can have a significant effect on the dark matter abundance, mainly due to entropy production in inflaton decays. We study both thermal and non-thermal production of axinos in the context of the MSSM with ten free parameters. We identify the ranges of the axino mass and the reheating temperature allowed by the LHC and other particle physics data in different models of axino interactions. We confront these limits with cosmological constraints coming the observed dark matter density, large structures formation and big bang nucleosynthesis. We find a number of differences in the phenomenologically acceptable values of the axino mass and the reheating temperature relative to previous studies. In particular, an upper bound on the axino mass becomes dependent on T_R, reaching a maximum value at T_R~10^2 GeV. If the lightest ordinary supersymmetric particle is a wino or a higgsino, we obtain lower a limit of approximately 10 GeV for the reheating temperature. We demonstrate also that entropy production during reheating affects the maximum allowed axino mass and lowest values of the reheating temperature.Comment: v2: improved discussion of warm dark matter bounds, results for stau LOSP adde

Patterns in Payout Policy and Payout Channel Choice of UK Firms in the 1990s

The paper examines the payout policy of UK firms listed on the London Stock Exchange during the 1990s.We complement the existing payout literature studies by analyzing jointly the trends in dividends and share repurchases.Unlike in the US, we find that, in the UK, firms do not demonstrate a decreasing propensity to distribute funds to shareholders.The role of share repurchases is increasing, but dividends still constitute a vast proportion of the total payout.Firms repurchasing shares usually pay dividends as well.We also document that there is a strong relationship between the presence of blockholders and the choice of the payout channel: firms with concentrated ownership tend to opt for dividends rather than share repurchases, irrespectively of the identity of the controlling shareholder.We argue that the differential taxation of dividends and capital gains as well as the insider trading regulation affect the relative attractiveness of dividends and share repurchases to large shareholders.Payout policy;dividends;share repurchases;taxes;power indices;Banzhaf index;ownership structure;corporate governance