This paper examines the costs and determinants of order aggressiveness. Aggressive orders have larger price impacts but smaller opportunity costs than passive orders. Price impacts are amplified by large orders, small firms, and volatile stock prices. To minimize the implementation shortfall, the optimal strategy is to enter buy (sell) orders at the bid (ask). Aggressive buy (sell) orders tend to follow other aggressive buy (sell) orders and occur when bid–ask spreads are narrow and depth on the same (opposite) side of the limit book is large (small). Aggressive buys are more likely than sells to be motivated by information.

This paper incorporates a Bayesian learning model into a hedonic framework to estimate the value that residents place on avoiding cancer risks from hazardous-waste sites. We show that residents are willing to pay to avoid cancer risks from Superfund sites before the U.S. Environmental Protection Agency (EPA) releases its assessment (known as the Remedial Investigation) of the site. Residents' willingness to pay to avoid risks actually decreases after the release of the Remedial Investigation, suggesting that the information lowers the perceived levels of risk. This estimated willingness to pay implies a statistical value of cancer similar to the value-of-life estimates in labor market studies.

The paper analyses the risk reduction effect of limits which are imposed on stock exchange price movements. As a result of the maximisation of traders’ utility functions subject to expected price constraints, a model similar to the capital asset pricing model (CAPM) is developed, where the observed returns are corrected for the appearance of constraints. An analysis of returns from six securities traded on the Warsaw Stock Exchange has been carried out. The models have been estimated by the two-limit Tobit model and compared with the results for the corrected returns. The results show that the trade barriers increase the portfolio risk.

We study the determinants of bank growth in a two-stage logistic regression model. We first compare banks that branch, Bank Acquire, or Product Expand with banks that do not grow externally. Banks that are federally chartered, in states with higher income growth, and with higher labor prices are less likely to grow externally. Larger banks are more likely to grow externally. In the second stage, we study determinants of growth activity for banks that expand products, branch, or acquire other banks. Depending on the time period, bank structure, regulatory environment, performance, and balance sheet characteristics determine bank growth choices.

The ‘new issues puzzle’ is that stocks of common stock issuers subsequently underperform nonissuers matched on size and book-to-market ratio. With 7000+ seasoned equity and debt issues, we document that issuer underperformance reflects lower systematic risk exposure for issuing firms relative to the matches. A consistent explanation is that, as equity issuers lower leverage, their exposures to unexpected inflation and default risks decrease, thus decreasing their stocks’ expected returns relative to matched firms. Equity issues also significantly increase stock liquidity (turnover), again lowering expected returns relative to nonissuers. We conclude that the ‘new issue puzzle’ is explained by a failure of the matched-firm technique to provide a proper control for risk. This conclusion is robust to issue characteristics and the choice of factor model framework.

This paper seeks to identify the characteristics that make individual U.S. banks more likely to fail or be acquired. We use bank-specific information to estimate competing-risks hazard models with time-varying covariates. We use alternative measures of productive efficiency to proxy management quality, and find that inefficiency increases the risk of failure while reducing the probability of a bank's being acquired. Finally, we show that the closer to insolvency a bank is (as reflected by a low equity-to-assets ratio) the more likely is its acquisition.

The U.S. economy has expanded rapidly in recent years, with total factor productivity (the source of growth most closely identified with technological gains) rising sharply since the mid-1990’s (see e.g., Bureau of Labor Statistics, 1999; William Gullickson and Michael J. Harper, 1999; Mun S. Ho et al., 1999; Daniel E. Sichel, 1999). This strong aggregate performance and the well-documented explosion of investment in computers and other high-tech equipment have led many to believe that the United States has experienced a permanent, technology-led growth revival. It is essential, however, to disaggregate estimates of economic growth to the industry level to understand the new trends in the U.S. economy. Productivity growth, the ability to produce more outputs from the same inputs, differs widely among industries. For the economy as a whole, negative productivity growth in one industry can offset positive productivity growth in another, and Jorgenson (1990) shows that a measure of productivity based solely on aggregate data is valid only under very stringent conditions. We avoid the limitations of an aggregate measure of productivity by decomposing U.S. growth across industries for the period 1958–1996. By breaking down the U.S. economy into 37 industries (35 private industries, private households, and general government), we identify the contribution of each industry to aggregate productivity growth. This enables us to isolate the underlying sources of gains in productivity and provides a better understanding of the forces driving the U.S. economy. Economy-wide productivity from an aggregate production function increased 0.45 percent per year during 1958–1996, while methodology developed by Evsey Domar (1961) for aggregating over industries yields an aggregate estimate of 0.48 percent. Over the same period, however, industry productivity growth ranged from 1.98 percent in Electronic and Electric Equipment to 20.52 percent in Government Enterprises, highlighting fundamental differences in technology and productivity growth across industries. These results show that the aggregate production function provides a reasonable estimate of productivity trends over long periods but also masks important differences among industries.

In early 1999, the mayor of New York City announced a plan for exporting most of his city’s waste (about 13,000 tons per day) to other states. The responses escalated an already growing war of words about interstate waste shipments. A Pennsylvania state legislator bluntly called the mayor’s plan “irresponsible,” and the governor of New Jersey labeled it “a direct assault” on her state. A spokesperson for New York City’s Department of Sanitation coolly staked out the City’s position: “You can’t stop interstate commerce. ... If Virginia is the least expensive place to deliver this solid waste, then that is where it is going to go.” The response was swift: various legislators joined environmental activists to send 50 pounds of trash to the mayor’s office. Led by the governor’s efforts, the Virginia General Assembly subsequently responded with proposed legislation to restrict significantly imports of waste (see R. H. Melton, 1998). Virginia’s legislative proposal came on the heels of numerous similar proposals by other states to which large shipments of waste are transported. Interstate shipments of waste involve almost the entire nation (47 states export waste, and 44 states import waste) and represent nearly $1 billion annually in disposal and transportation fees. Since the early 1990’s, these shipments have increased by more than 30 percent. As officials in importing states have sought to curb these flows, the U.S. Supreme Court has repeatedly struck down their proposed restrictions as violations of the Interstate Commerce Clause. In response, the Congress has advanced proposals to exempt waste from jurisdiction of that clause. To date, however, very little is known about the positive and normative effects of the various proposals to restrict municipal solid-waste transshipments. How are the effects of restrictions likely to be distributed among the owners of waste-disposal facilities and the users of these services? Given that the Northeast is a net exporter and the Midwest is a net importer of waste, are the effects likely to differ among regions of the country? In this paper we model the interstate market for municipal solid waste and evaluate the potential economic effects of public policies proposed to restrict waste flows. These restrictions include local and state requirements stipulating where waste must be landfilled, prohibitions on the import or export of waste across state boundaries, quantitative limits on these flows, and extra fees levied on imported waste. To our knowledge, this research is the first to evaluate these proposals quantitatively. We develop both a conceptual and a computable economic model of the use over time of spatially differentiated resources, characteristics which well describe the nation’s landfill facilities (landfills, rather than recycling or other disposal options, are the dominant destination of most interstate shipments). The model characterizes the efficient intertemporal allocation of spatially distributed waste-disposal capacity among users who are also spatially distributed. In addition,

This paper examines long‐term block ownership by corporations and performance changes in firms with corporate block owners. We also examine potential reasons for corporate ownership including benefits in product market relationships, alleviation of financing constraints, and board monitoring by corporate owners. We find the largest significant increases in targets' stock prices, investment, and operating profitability when ownership is combined with alliances, joint ventures, and other product market relationships between purchasing and target firms, especially in industries with high research and development. Our findings are consistent with the conclusion that block ownership by corporations has significant benefits in product market relationships.

Psychologists have found that the age at which successful practitioners typically do their best work varies across professions, but they have not considered whether these peak ages change over time, as economic models suggest they might. Using auction records, we estimate the relationship between artists' ages and the value of their paintings for two successive cohorts of leading modern American painters: de Kooning, Pollock, Rothko, and others born during 19001920 and Frank Stella, Warhol, and others born during 192140. We find that a substantial decline occurred over time in the age at which these artists produced their most valuableand most importantwork and argue that this was caused by a shift in the nature of the demand for modern art during the 1950s.