This paper analyzes the market for syndicated loans, a hybrid of private and public debt, which has grown at well over a 20% rate annually over the past decade and which totaled over $1 trillion in 1997. We identify empirically the factors that influence a bank or nonbank's decision to syndicate a loan and the determinants of the proportion of the loan sold in the event of syndication. The evidence reveals a loan is more likely to be syndicated as information about the borrower becomes more transparent, as the syndicate's managing agent becomes more “reputable”, and as the loan's maturity increases. The lead manager holds larger proportions of information-problematic loans in its own portfolio. Loan syndications, like loan sales, appear to be motivated, in part, by capital regulations, and the liquidity position of the agent bank influences the likelihood of syndication, but not the extent. Our results confirm that information and agency problems affect the salability of debt claims and the extent to which a loan is “transaction oriented” rather than “relationship oriented” in the sense of A. Boot and A. Thakor (2000, J. Finance54, 679–713). Journal of Economic Literature Classification Numbers: D82, G20, G21, G24.

We present evidence that managerial shareholdings are an important determinant of bank risk-taking. Managerial shareholdings are positively related to total and firm specific risk in the late 1980s when banking was relatively less regulated and when the industry was under considerable financial stress. However, following legislation in 1989 and 1991 designed to reduce risk-taking and also reflecting substantial improvements in bank franchise value, managerial shareholdings and total and firm specific risk became negatively related in the early 1990s. In contrast, systematic risk was unrelated to managerial ownership in both periods.

We construct a tractable, flexible-functional-form estimator of cumulative distribution functions for non-negative random variables which admits large numbers of covariates. The estimator adopts and extends techniques from the spell-duration literature for estimating hazard functions to distribution functions for wages, earnings, and income. We apply these methods to investigate sources of wage inequality for full-time male workers between Canada and the United States, finding that the Canadian wage density has a thinner left tail because low-educated workers have higher pay and a thinner right tail because of a lower proportion of highly-educated workers. Unions appear to play a large role in these outcomes.

This paper considers the problem of choosing the number of bootstrap repetitions B for bootstrap standard errors, confidence intervals, confidence regions, hypothesis tests, p-values, and bias correction. For each of these problems, the paper provides a three-step method for choosing B to achieve a desired level of accuracy. Accuracy is measured by the percentage deviation of the bootstrap standard error estimate, confidence interval length, test’s critical value, test’s p-value, or bias-corrected estimate based on B bootstrap simulations from the corresponding ideal bootstrap quantities for which B��. The results apply quite generally to parametric, semiparametric, and nonparametric models with independent and dependent data. The results apply to the standard nonparametric iid bootstrap, moving block bootstraps for time series data, parametric and semiparametric bootstraps, and bootstraps for regression models based on bootstrapping residuals. Monte Carlo simulations show that the proposed methods work very well.

This paper studies the extent to which qualitative features of Walrasian equilibria are refutable given a nite data set. In particular, we consider the hypothesis that the observed data are Walrasian equilibria in which each price vector is locally stable under t^atonnement. Our main result shows that a nite set of observations of prices, individual incomes and aggregate consumption vectors is rationalizable in an economy with smooth characteristics if and only if it is rationalizable in an economy in which each observed price vector is locally unique and stable under t^atonnement. Moreover, the equilibrium correspondence is locally monotone in a neighborhood of each observed equilibrium in these economies. Thus the hypotheses that equilibria are locally stable under t^atonnement, equilibrium prices are locally unique and equilibrium comparative statics are locally monotone are not refutable with a nite data set. 1

The integrated equilibrium is a paradigm that has played a central role in the field of international trade. The concept originated with Paul A. Samuelson (1949), was further developed by Avinash K. Dixit and Victor F. Norman (1980), and placed at the heart of international analysis by Elhanan Helpman and Paul R. Krugman (1985). The central idea is that a world with imperfect mobility of productive factors across regions or countries may replicate the essential equilibrium of a fully integrated economy, provided that goods are perfectly mobile. The concept of the integrated equilibrium has proved to be exceptionally tractable and useful for analytic developments, as for example in the work of Gene M. Grossman and Helpman (1992). We have found using elements of integrated equilibrium analysis useful in our own work (e.g., Davis et al., 1997). The central figures in developing the theory of trade and growth within the integrated equilibrium framework have been quite aware of its limitations. Helpman and Krugman (1985) include a section on the cases in which factor-price equalization (FPE) breaks down. Grossman and Helpman (1992) make the distinction between national and international spillovers a key element of their theory of trade and growth. Moreover, the starting point of Krugman’s work in the past decade on economic geography has been precisely to deny that the world operates as if it were an integrated economy. This notwithstanding, we believe that the grip of integrated equilibrium analysis on the way that the economics profession conceives of world trade patterns remains very powerful and in important ways distorts one’s view of trade relations, particularly among the relatively rich countries of the OECD. We do not propose to banish integrated equilibrium analysis. We believe that it is useful in the proper context. However, we do propose that it is important to have a fuller appreciation of the limits of such analysis from an empirical standpoint and thus to have a richer view of the determinants of world trade patterns.

A model of major league baseball is developed which distinguishes between league behavior and individual team behavior. The league is viewed as setting rules that restrict the team's willingness to pay and/or impose costs on the transfer of players between teams. Given these rules, teams then compete for player services. The model is estimated and tested. The evidence suggests that the restrictive effect of league rules on player salaries declined between 1986-1988 and 1989-1991, consistent with anecdotal evidence. Within the rules established by the league, however, teams appear to behave as competitive price-takers through the entire sample period.