Ownership, liquidity, and investment

Article Abstract:

Sensitivities to cash flow experience abrupt increases as insider holdings rise from zero. However, this relationship is hardly linear because the correspondence becomes ineffectual when insider ownership settles at high levels. There is also empirical evidence that points to a steady decrease of investment-cash flow sensitivities with respect to insider holdings after a particular point. These findings proves that capital markets experience asymmetric-information problems that become more pronounced when company leaderships have a strong motivation for efficient shareholder returns.

Cash Management, Economic aspects, Liquidity (Finance), Cash flow

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Terms-of-trade shocks and optimal investment: another look at the Laursen-Metzler effect

Article Abstract:

Research was conducted to investigate the effects of permanent and transitory changes in the terms of trade of a small open economy with trade in capital goods and consumption and with intertemporally optimizing agents. Findings show exactly the opposite of Laursen-Metzler effect. The impact of transitory improvements depend on three factors, namely, the duration of the windfall, the import content of investments and the level of intertemporal sustainability in both investment and consumption.

Research, Balance of payments, Terms of trade

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Financial decision-making: are women really more risk-averse?

Article Abstract:

A study was conducted to analyze the comparative risk propensity of male and female subjects in financial choices relevant for investors and managers. Positive differences between mean certainty equivalents were examined. Results indicated that the comparative risk propensity between genders is influenced by the decision frame. Gender-specific risk propensities arise in abstract gambles, where men are more risk-prone toward gains.

Asset & Risk Management, Decision-making, Decision making, Risk management, Demographic aspects

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