Globalization

We examine early approaches to the agency problem by asking when captains owned ships in eigheenth and nineteenth century shipping, and how captain-ownership effected voyage success. For each ship we observe the identity of the owners, the identity of the ship captain, the route pursued for each voyage, and various outcome measures for each voyage. We also have information on vessel construction characteristics, the sailing history of each vessel, and the occupations of the owners.

Disparity between control and ownership rights gives rise to the risk of tunneling by the controlling shareholder. This disparity is prevalent in many emerging market economies and present in some developed countries. This paper studies whether and how the degree of control-ownership disparity in investors' home countries affects their portfolio choice in an emerging market. It combines two unique data sets on ownership and control in business groups, and investor-stock level foreign investment in Korea.

Accounting and valuation are so intertwined that valuation is really a matter of accounting; valuation involves accounting for value. Accordingly, a valuation is only as good as the accounting underlying it. How can one ask the question of what the price-earnings should be if the earnings are fuzzy? What is the meaning of price-to-book if book values are suspect? There is a question for both the investor and the accountant to answer: What is good accounting for valuation? Do International Financial Reporting Standards (IFRS) or U.S.

In the wake of the crisis of 2008 and onwards, it has become fashionable to return to the work of Hyman Minsky and Charles Kindleberger, and cite them as showing the ubiquity of crises, how they are an inevitable result of human nature, and how they have therefore to be carefully and thoroughly regulated against. Charles Calomiris considers this view, first clearly distinguishing between financial crises and banking crises.

This paper exploits India's rapid, comprehensive and externally imposed trade reform to establish a causal link between changes in tariffs and firm productivity. Pro-competitive forces, resulting from lower tariffs on final goods, as well as access to better inputs, due to lower input tariffs, both appear to have increased firm-level productivity, with input tariffs having a larger impact. The effect was strongest in import-competing industries and industries not subject to excessive domestic regulation.

This paper documents that intermediaries play an important role in facilitating international trade. We modify a heterogeneous firm model to allow for an intermediary sector. The model predicts that firms will endogenously select their mode of export-either directly or indirectly through an intermediary-based on productivity. The model also predicts that intermediaries will be relatively more important in markets that are more difficult to penetrate.

What do economics and history have to tell us about the ways euro zone countries are likely to resolve their problems of fiscal unsustainability and banking system insolvency? In answering that question, I am among the most pessimistic observers of the likely future of the euro and its membership. In my view, the euro zone's likely failure to avoid at least some departures, if not total collapse, reflects its poor initial institutional design.

In this paper we study the determinants of business groups’ ownership structure using unique panel data on Korean chaebols. In particular, we attempt to understand how groups form over time. We find that chaebols grow vertically (that is, pyramidally) as the family uses well-established group firms (“central firms”) to set up and acquire firms that have low pledgeable income (e.g., low profitability) and high acquisition premia.