While the value of listing equity securities has been researched extensively, no studies have examined the market reaction to the decision to list corporate debt. Since the listing of corporate bonds on the major exchanges is a significant corporate activity, this study examines the impact of bond listing on shareholder wealth. Using a variety of possible announcement dates as well as cumulative abnormal returns between dates, no detectable market reaction to debt listing is found. Therefore, the listing of corporate bonds does not appear to be valued by the common shareholders of those same firms.

The Bankruptcy Reform Act of 1978 contains several provisions that can affect the cost of producing loans for financial intermediaries. In a competitive lending market the additional monitoring and expected foreclosure costs imposed by the change in the bankruptcy law should be passed on to the borrower. Using survey data from a sample of small business loans from commercial banks, evidence is presented that the enactment of the new law resulted in higher contract rates of interest.

This paper develops and estimates a model of interrelated factor demand with rational expectations, in the presence of internal adjustment costs. Invariant technological parameters are distinguished from the firm's adjustment parameters, which change when the exogenous processes faced by the firm change. The capital demand equation is derived by solving the Euler equations which stem from minimization of the present value of costs. Future exogenous variables are supplied from solutions of ARIMA equations. The model is tested on postwar quarterly data for U.S. manufacturing. A regime change in the process for energy prices is simulated, as is a temporary suspension of the investment tax credit.

Gary C. Sanger, John J. McConnell, Stock Exchange Listings, Firm Value, and Security Market Efficiency: The Impact of NASDAQ, The Journal of Financial and Quantitative Analysis, Vol. 21, No. 1 (Mar., 1986), pp. 1-25

[The sales activity variance as well as the corresponding production variance are typically partitioned into a yield variance and a mix variance. These latter variances have a defect which can lead to dysfunctional decisions. Since these variances are based on an average unit price which varies with respect to the unit of measurement selected, the same real events can appear as positive or negative variances. Alternative variances for mix and yield which do not have the above defect are suggested, based on expressing the units of goods sold by their cost of production.]

[According to the principle of user primacy, the interests of users of financial reports take priority over the interests of preparers of financial reports. When applied to the activities of a standard setter for corporate financial reporting, user primacy is a constitutional claim, stating a general principle for the resolution of conflicts. It is controversial, because it is incompatible with views that standard setting is a collective choice process, where the interests (preferences) of all parties are to count equally. An analysis of the logical foundations of the principle is provided, based on recent work in ethics and social and political philosophy. User primacy is a distributional principle governing the relationship between users and managers. A theoretical framework for the rational choice of a distributional principle governing the disclosure of information in the securities market is provided. The conditions under which a securities market-which includes in its basic structure a standard setter to implement the user primacy principle-would be chosen by rational, disinterested securities market agents are analyzed. A standard setter would be established to enforce user primacy, thereby redressing an imbalance between investors (users) and managers. By acting in accordance with this principle, the standard setter aids all securities market agents in exploiting the potential trading gains provided by such a market. At the same time, investors are protected from possible losses arising from the basic relationship between them and managers of widely held corporations. The analysis is applied to two versions of the user primacy principle prominent in the professional standard-setting literature. Although the analysis is not intended to advocate user primacy, a clear and complete statement of the principle is proposed as a guide to standard-setting bodies.]