Knowledge that Transforms

THIS paper is an empirical study attempting to ascertain those factors that influence the firm's choice of a debt-equity ratio. Baxter and Cragg (1970), have published an empirical study that is similar in nature to this one. However, this paper differs from theirs in several important respects. First, we deal explicitly with the relationship between the overall debtequity ratio of the firm and the firm's choice of new financing. Secondly, we include the notion that the risk premiums required on bonds issued may differ among firms or between years. Finally, we include as a variable the corporate tax rate for each year. In section I we present the statistical model. A description of the independent variables used in the empirical study is presented in section II. Section III contains the results of our study plus implications and conclusions.

THE age profile of individual asset holdings is frequently supposed to follow a hump pattern, increasing during the working lifetime and declining in later years. The theoretical explanation of such a relationship is firmly established, since it is a characteristic feature of life-cycle saving models. However, the empirical evidence has never been critically examined. A number of studies based on sample survey information have been regarded as confirming this hump pattern, but on closer examination the evidence is far from conclusive. Moreover the survey results conflict fundamentally with alternative estimates of the age-wealth relationship derived from estate tax data. This paper begins in section II by examining this basic conflict. In the following section the relevance of cross-section studies is questioned, and a cohort is identified whose lifetime wealth characteristics can be studied. The sequence of observed wealth distributions for this cohort is obtained by selecting successive ten years age groups from the Estate duty statistics at intervals of a decade. Section IV is devoted to an analysis of the variation in the composition of any cohort as it ages. These composition changes arise from the fact that wealthier individuals have a lower mortality rate and therefore tend to become a larger proportion of the surviving cohort independently of accumulation behaviour. In these circumstances the characteristics of the representative individual will not necessarily correspond to the representative behaviour of the group. It is, however, possible to correct for this change in composition so that the empirical estimates can be compared with the predictions of economic theory.

Industrial demand for energy is essentially a derived demand: the firm's demand for energy is an input is derived from demand for the firm's output. Inputs other than energy typically also enter the firm's production process. Since firms tend to choose that bundle of inputs which minimized the total cost of producing a giving level of output, the derived demand for inputs, including energy, depends on the level of output, the submitions possibilies among inputs allow by production technology, and the relative prices of all inputs.

Journal Article A Note on the Concavity of the Mean-Variance Problem Get access David Sibley David Sibley Yale University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 3, July 1975, Pages 479–481, https://doi.org/10.2307/2296861 Published: 01 July 1975

Journal Article The Aggregate Excess Demand Correspondence and the Structure of Economies with Externalities Get access D. T. Scheffman D. T. Scheffman University of Western Ontario Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 4, October 1975, Pages 597–604, https://doi.org/10.2307/2296796 Published: 01 October 1975

This paper is a sequel to the analysis of the growth process of firms presented in Chapters 4 and 5 of our book Growth, Profitability and Valuation. The relationship between size and growth of firms is explored using a more comprehensive set of data than was used in the book. In particular, the book was based on data relating to individual quoted companies in the UK in only three large industries, whereas, in this paper, we extend the analysis to cover all major industrial groups in manufacturing, construction and distribution. This paper explores the relationship between size and growth of firms, and particularly stochastic models based on the Law of Proportionate Effect or Gibrat's Law.

Risk Aversion and Wealth Effects on Portfolios with Many Assets: An Extension Get access Ngo van Long Ngo van Long Australian National University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 3, July 1975, Pages 473–477, https://doi.org/10.2307/2296860 Published: 01 July 1975

Journal Article ”Turnpike“ Theory With (Under) Consumption Get access Trout Rader Trout Rader Washington University, St Louis Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 1, January 1975, Pages 155–165, https://doi.org/10.2307/2296829 Published: 01 January 1975