This study investigates variations in covenants across different classes of preferred stock and describes the role of accounting numbers in such covenants. The findings indicate that covenants in contracts that protect the priority of the claims of preferred stockholders are more prevalent in very debt‐like preferred stock issues when there are greater anticipated conflicts over claim priority with common stockholders. When the preferred stock issues take on common equity‐like interests, there is less opportunity for common stockholders to gain from diluting the priority of the claims of the preferred stockholders. Consequently, the contracts are not configured to the same extent of restrictions on wealth transfers. Audited accounting numbers are utilized extensively in these covenants, and the contracts adjust these numbers to limit management's discretion in their choice of accounting policies for relaxing the covenants. Résumé. Les auteurs analysent les différences observées dans les clauses restrictives associées à diverses catégories d'actions privilégiées et décrivent le rôle des données comptables chiffrées dans ces clauses. Les conclusions de l'étude révèlent que les clauses restrictives des contrats qui assurent la priorité des créances des actionnaires privilégiés sont plus répandues dans les émissions d'actions privilégiées s'apparentant très étroitement à des titres d'emprunt lorsque les conflits prévus avec les actionnaires ordinaires en ce qui a trait à la priorité des créances sont plus importants. Lorsque les actions privilégiées émises s'apparentent davantage à des actions ordinaires, les actionnaires ordinaires sont moins susceptibles de tirer profit d'une dilution de la priorité des créances des actionnaires privilégiés. Par conséquent, les contrats ne sont pas structurés de façon à contenir des restrictions de même portée sur les transferts de richesse. Les données comptables vérifiées sont abondamment utilisées dans ce genre de clauses restrictives, et les contrats prévoient l'ajustement des données chiffrées de façon à limiter la discrétion dont jouit la direction dans le choix des conventions comptables susceptibles d'assouplir le caractère restrictif des clauses.

First-order autoregressive/unit root models with independent identically distributed normal errors are considered, including those without an intercept, those with an intercept, and those with an intercept and time trend. The autoregressive parameter is allowed to lie in the interval (-1, 1], which includes the unit root case. Exactly median-unbiased estimators and exact confidence intervals of the autoregressive parameter are introduced. Corresponding exactly median-unbiased estimators and exact confidence intervals are also provided for the impulse response function, the cumulative impulse response, and the half life of a unit shock. An unbiased model selection procedure is discussed. The introduced procedures are applied to several data series.

This paper considers tests for parameter instability and structural change with unknown change point. The results apply to a wide class of parametric models that are suitable for estimation by generalized method of moments procedures. The asymptotic distributions of the test statistics considered here are nonstandard because the change point parameter only appears under the alternative hypothesis and not under the null. The tests considered here are shown to have nontrivial asymptotic local power against all alternatives for which the parameters are nonconstant. The tests are found to perform quite well in a Monte Carlo experiment reported elsewhere.

[We study firms signaling with cash disbursements and show that the choice of a deterministic or a stochastic disbursement depends on a property of the firm's production function that is analogous to absolute risk aversion for a utility function. With decreasing (increasing) absolute risk aversion, the high-quality firm prefers to distinguish itself from the low-quality firm with a stochastic (deterministic) outlay. We then study in detail two common forms of corporate cash distributions: dividends, a deterministic disbursement, and share repurchases, a stochastic disbursement.]

We study firms signaling with cash disbursements and show that the choice of a deterministic or a stochastic disbursement depends on a property of the firm’s production function that is analogous to absolute risk aversion for a utility function. With decreasing (increasing) absolute risk aversion, the high-quality firm prefers to distinguish itself from the low-quality firm with a stochastic (deterministic) outlay. We then study in detail two common forms of corporate cash distributions: dividends, a deterministic disbursement, and share repurchases, a stochastic disbursement.

A social welfare function f is Arrowian if it has transitive values and satisfies Arrow's independence axiom. For any fraction t and any Arrowian f, either there will be some individual who dictates on a subset containing at least the fraction t of outcomes, or at least the fraction 1 minus t of the pairs of outcomes have their social ranking fixed independently of individual preference. And for any Arrowian f, there is a set containing a large fraction of the citizens whose preferences are never consulted in determining the social ranking of a large fraction of the pairs of alternatives.

The demand for two custom calling services is investigated. The services may be bought individually or in a discounted package. A micro-theory based on discrete choice model is formulated that explicitly accounts for these purchase options. The model is estimated assuming both dependence and independence of the unobservable choice-influencing variables. The estimated parameters are used to simulate the revenue impact of price and discount changes.

Transactions (and precautionary) theories of money demand imply that the more unequal the distribution of income (or transactions), the lower the demand for money. This paper presents evidence that contradicts this implication of transactions theories of money demand. Using annual U.S. data, it is found that as income becomes more unequally distributed, the demand for money increases rather than decreases. The result is found to be robust to a variety of distribution measures and money-demand specifications.

This paper analyzes the relationship between changes in unionization and firm growth. Average growth is significantly lower in manufacturing firms that experience successful union elections, but these strong "effects" are largely illusory. We find no evidence of a significant relationship between unionization and firm growth, despite a strong cyclical pattern in election activity. Our results suggest that the significant negative effect of organizing activity on a firm's market value is not accompanied by any growth changes. We therefore cannot reject the hypothesis that the equity losses from union election activity represent a simple transfer of wealth from shareholders to workers.

This paper analyzes the relationship between changes in unionization and firm growth. Average growth is significantly low er in manufacturing firms that experience successful union elections bu t these strong "effects" are largely illusory. The authors find no evidence of a significant relationship between unionization and firm growth, despite a strong cyclical pattern in election activity. Thei r results suggest that the significant negative effect of organizing activity on a firm's market value is not accompanied by any growth changes. The authors, therefore, cannot reject the hypothesis that t he equity losses from union election activity represent a simple transf er of wealth from shareholders to workers.