The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

The standard of living

The Investment Behavior and Performance of Various Investor Types: A Study of Finland's Unique Data Set

In this chapter, we discuss the agency theory. The agency theory is a principle utilized in an attempt to explain the complicated relationship that exists between the owners (principal) and managers (agents) of the business. Based on this, we propose that the agency theory is an attempt to explain the complexity of human behaviour in the principal-agent relationship. We are of the view that when the desires or goals of the principal and agent conflict, it is difficult or expensive for the principal to verify what the agent is doing. Since the theory is an attempt to explain the complexity of human behaviour in the principal-agent relationship, we pose the question: what happens to the theory in the era dominated by intelligent machines? We conclude that with AI, there will be new frontiers. These new frontiers include, among other things, the certainty of sharing of intelligent information that would, in the context of the agency theory, be available to both the agent and the principal. Further, we observe that the advantages of intelligent systems are updateability and connectivity. Using these strengths, we think intelligent agents will be swift in picking up the information discrepancies. Intelligent systems have the capability of harvesting information from different sources. Once gathered, this information will be updated in the principal’s system, given that the systems will be integrated. Finally, we think it conceivable that perhaps the agent, knowing that intelligent agents are deployed widely and that these intelligent systems have the capability of harvesting data from different repositories, will moderate his or her behaviour to be closely aligned to that of the principal.

The Agency Theory

Herding and Feedback Trading by Institutional and Individual Investors

This article intends to review the theoretical aspects and empirical evidences made on agency theory It is aimed to explore the main ideas, perspectives, problems and issues related to the agency theory through a literature survey It discusses the theoretical aspects of agency theory and the various concepts and issues related to it and documents empirical evidences on the mechanisms that diminish the agency cost The conflict of interest and agency cost arises due to the separation of ownership from control, different risk preferences, information asymmetry and moral hazards The literatures have cited many solutions like strong ownership control, managerial ownership, independent board members and different committees can be useful in controlling the agency conflict and its cost This literature survey will enlighten the practitioners and researchers in understanding, analysing the agency problem and will be helpful in mitigating the agency problem

Agency theory: Review of Theory and Evidence on Problems and Perspectives:

Mergers and Acquisitions (M&A) are considered as the engines for accelerated and consistent growth for companies. M&A is more significant in today’s corporate world due to globalization, liberalization and intensely competitive business environment. The present study is an attempt to examine post M&A performance in manufacturing companies in India. ‘Economic value added’ (EVA®), a registered trademark of Stern Stewart & Co and a measure of economic profit, is considered in evaluating the industry adjusted returns for the companies that have gone for acquisitions. The scope of the study is limited to manufacturing companies in India that have gone for acquisitions.

Wealth creation through acquisitions

Previous empirical evidence scrutinizing the impact of the institutional ownership on the firm performance has produced inconclusive results and mostly concentrated in the developed market. Hence, the purpose of this paper is to assess the impact of the ownership engagement by pressure-resistant, pressure-sensitive and foreign institutions on the corporate financial performance in a developing market like India post US financial crisis.,This study considers a panel data set of 361 Indian listed firms from National Stock Exchange (NSE) 500 index for a period of eight years from financial year (FY) 2008-2009 to FY 2015-2016. The panel data regression (pooled ordinary least square [OLS], fixed-effect [FE] and random-effect [RE]) and simultaneous equation modeling are used by considering the institutional ownership engagement as both exogenous and endogenous variable.,The test results show that institutional ownership engagement by the pressure-resistant and foreign institution have a robust and positive effect, while ownership engagement by the pressure sensitive institution has an adverse impact on the financial performance of the Indian listed firms.,The findings will boost the monitoring activities of the institutional owners in the developing markets. The investment from pressure-resistant and foreign institutions needs to be augmented in Indian firms to improvise their governance functions and performance.,This research will enrich the governance literature of the developing economies as the studies on institutional ownership engagement are limited in the developing world. Further, this study adds value by capturing two emerging institutional ownership category such as the pressure-resistant and pressure-sensitive, which are still untouched in the Indian context. Next, the consideration of the institutional ownership as both exogenous and endogenous is also novel to the Indian literature.

Does institutional ownership engagement matter for greater financial performance?: Evidence from a developing market

Purpose: This paper aims to review the prior literature on payment methods in Mergers and Acquisitions (M&As) and summarizing its effects on the performance of companies involved in M&As. This study also attempts to find out various determinants of the payment methods of M&As that affects the decision of payment methods in M&As. Methodology: To carry out the analysis, this study focuses the past literature relating to payment methods in M&As and summarizes the positive and negative effects of different payment methods. The review is carried out by dividing into four parts (i) Literature studies on cash payment method (ii) Literature studies on stock payment method (iii) Literature studies on mixed payment and (iv) Determinants of payment methods. The paper investigates based on the findings of the major studies. Research limitations: The scope of the study is confined to the contemporary review of M&As literature than the empirical survey. The study is focused more on giving suggestions for future work on M&As than providing conclusion. Research Implications: The knowledge gained from this study will help managers from both acquirer and target companies for selection of appropriate payment methods and improve their investment mechanism and strengthen their finances by value creation in M&As. Originality: To the authors’ knowledge this paper is the first attempt to document for summarizing the impact of different payment methods and its determinants of performance of M&As deals.

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Payment Methods in Mergers and Acquisitions: A Theoretical Framework

Mergers and acquisitions (MA while its pre-M&A quick ratio and asset turnover ratio increased. It was also estimated that the Z score below 0.02 in the case of M&A would indicate the company was probably headed for failure, while companies with scores above 0.02 were likely to be successful.

N. M. Leepsa

Papers

Agency theory: Review of Theory and Evidence on Problems and Perspectives:

Wealth creation through acquisitions

Does institutional ownership engagement matter for greater financial performance?: Evidence from a developing market

Payment Methods in Mergers and Acquisitions: A Theoretical Framework

Predicting Success of Mergers and Acquisitions in Manufacturing Sector in India: A Logistic Analysis