Working Papers
Working papers authored by Tuck professors may be found via the Tuck faculty directory, personal faculty websites, or the Social Science Research Network. All working papers are copyrighted by the authors. For permission to reproduce or to request a copy of a paper, please contact the author directly.
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Social Science Research Network
Social Science Research Network: Tuck School Research Paper Series
Highlights
B. Espen Eckbo, Giulia Paone, Runa Urheim:
Efficiency of Share-Voting Systems: Report on Sweden, August 2010
Abstract: Institutional shareholders around the world increasingly use active share-voting to protect their portfolio investments and improve corporate governance. However, exercising voting rights involves costly and often arcane country-specific legal rules. This report on Sweden is one of a series examining the potential for increased harmonization of cross-border share-voting systems and proxy voting in the U.S. and Member States of the European Union (EU). The first report, on Italy, is in Eckbo, Paone and Urheim (2009). Our Swedish report describes the share-registration system and voting chain for publicly traded companies in Sweden. We highlight voting impediments and examine recent regulatory attempts to make the voting process both more efficient and conforming to the 2007 EU Shareholder Rights Directive. We also provide empirical evidence on how Swedish listed firms have adapted to Sweden's share-voting system.
Jonathan Lewellen, Katharina Lewellen:
Investment and Cashflow, June 2010
Abstract: We provide new estimates of investment-cashflow sensitivities for a large cross section of U.S. firms from 1971-2006. Our tests extend the literature in several key ways and provide strong evidence that cashflow matters beyond its correlation with investment opportunities. Controlling only for M/B, a dollar of current- and prior-year cashflow is associated with an additional $0.59 of investment for firms that are the least likely to be constrained and $0.75 for firms that are the most likely to be constrained. Investment-cashflow sensitivities for the two groups drop to a conservatively estimated but still significant 0.32 and 0.67, respectively, after correcting for measurement error in M/B (our proxy for Q). The results suggest that financing constraints and, perhaps, free cashflow problems are important for investment decisions.
Xiaobo Lu, Kenneth Scheve, Matthew J. Slaughter:
Envy, Altruism and the International Distribution of Trade Protection, January 2010
Abstract: One important puzzle in international political economy is why lower-earning and less-skilled intensive industries tend to receive relatively high levels of trade protection. This pattern of protection holds even in low-income countries in which less-skilled labor is likely to be the relatively abundant factor of production and therefore would be expected in many standard political-economy frameworks to receive relatively low, not high, levels of protection. We propose and model one possible explanation: that individual aversion to inequality - both envy and altruism - lead to systematic differences in support for trade protection across industries, with sectors employing lower-earning workers more intensively being relatively preferred recipients for trade protection. We conduct original survey experiments in China and the United States and provide strong evidence that individual policy opinions about sector-specific trade protection depend on the earnings of workers in the sector. We also present structural estimates of the influence of envy and altruism on sector-specific trade policy preferences. Our estimates indicate that both envy and altruism influence support for trade protection in the United States and that altruism influences policy opinions in China.