Stockholm School of Economics

About: Stockholm School of Economics is a education organization based out in Stockholm, Sweden. It is known for research contribution in the topics: Population & Entrepreneurship. The organization has 1186 authors who have published 4891 publications receiving 285543 citations. The organization is also known as: Stockholm Business School & Handelshögskolan i Stockholm.

What Do Firms Disclose and Why? Enforcing Corporate Governance and Transparency in Central and Eastern Europe

Abstract: While specific corporate governance rules often are controversial, most observers agree on the need to disclose who owns and controls a firm and what governance arrangements are in place. This paper examines such disclosure in a sample of 370 companies listed on stock exchanges in Central and Eastern Europe. The data show widespread non-disclosure of even the most basic elements of corporate governance arrangements, despite existing regulation. The level of disclosure varies substantially across firms, and there is a strong country effect in what companies disclose. Overall, what is disclosed depends on the legal framework and practice in a given country, but it does not correlate with firms' financial performance. On the other hand, financial performance is strongly related with how easily available the information is to the public. In particular, information is more available in larger firms, firms with lower leverage, higher market-to-book ratios, and more concentrated ownership.

The Conditional Performance of Insider Trades

Abstract: This paper estimates the performance of insider trades on the closely held Oslo Stock Exchange (OSE) during a period of lax enforcement of insider trading regulations Our data permit construction of a portfolio that tracks all movements of insiders in and out of the OSE firms Using three alternative performance estimators in a time-varying expected return setting, we document zero or negative abnormal performance by insiders The results are robust to a variety of trade characteristics Applying the performance measures to mutual funds on the OSE, we also document some evidence that the average mutual fund outperforms the insider portfolio CORPORATE INSIDERS, IE, INDIVIDUALS closely related to the firm either through direct employment or through participation on supervisory committees and boards, will from time to time possess information about the firm’s future cash f low which is not yet ref lected in the firm’s stock price Insiders who trade on the basis of such information tend to purchase stocks just prior to abnormal price increases and to sell just prior to abnormal price declines Employing traditional event-study techniques, in which equal-weighted average abnormal stock returns are estimated over a fixed time period following insider trades, the extant empirical literature tends to support this “buy low and sell high” hypothesis For example, Jaffe (1974) and Seyhun (1986) present evidence of significant abnormal stock returns following reported insider trades on the New York and the American Stock Exchanges Similarly, Baesel and Stein (1979) and Fowler and Rorke (1984) conclude that insiders on the Toronto Stock Exchange earn abnormal profits, and Pope, Morris, and Peel (1990) reach a similar conclusion for firms in the United Kingdom * Eckbo is with the Stockholm School of Economics and the Norwegian School of Economics and Business Administration; Smith is at the Norwegian School of Management We are grateful for the comments of Mark Britten-Jones, Oyvind Bohren, Glen Donaldson, Michael Cooper, Thore Johnsen, Kenneth Khang, Lisa Kramer, Ananth Madhavan, Maurizio Murgia, Rene Stulz (the editor), Raman Uppal and, in particular, Wayne Ferson We also thank seminar participants at the Central Bank of Norway, Concordia University, London Business School, Norwe

The provision of online public goods: Examining social structure in an electronic network of practice

Abstract: Electronic networks of practice are computer-mediated social spaces where individuals working on similar problems self-organize to help each other and share knowledge, advice, and perspectives about their occupational practice or common interests. These interactions occur through message postings to produce an on-line public good of knowledge, where all participants in the network can then access this knowledge, regardless of their active participation in the network. Using theories and concepts of collective action and public goods, five hypotheses are developed regarding the structural and social characteristics that support the online provision and maintenance of knowledge in an electronic network of practice. Using social network analysis, we examine the structure of message contributions that produce and sustain the public good. We then combine the results from network analysis with survey results to examine the underlying pattern of exchange, the role of the critical mass, the quality of the ties sustaining participation, the heterogeneity of resources and interests of participants, and changes in membership that impact the structural characteristics of the network. Our results suggest that the electronic network of practice chosen for this study is sustained through generalized exchange, is supported by a critical mass of active members, and that members develop strong ties with the community as a whole rather than develop interpersonal relationships. Knowledge contribution is significantly related to an individual's tenure in the occupation, expertise, availability of local resources and a desire to enhance one's reputation, and those in the critical mass are primarily responsible for creating and sustaining the public good of knowledge. Finally, we find that this structure of generalized exchange is stable over time although there is a high proportion of member churn in the network.

On The Distributional Effects Of Reducing Capital Taxes

Abstract: This article asks whether household heterogeneity and market incompleteness have quantitatively important implications for the welfare effects of tax changes. We compare a representative-agent economy to an economy in which households face idiosyncratic uninsurable income risk. The income process is consistent with empirical estimates and implies a realistic wealth distribution. We find that capital tax cuts imply large welfare gains in the representative-agent economy. However, when households are heterogeneous, substantial redistribution during transition means that only a minority will support capital tax cuts, whereas most households can expect large welfare losses.