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Information Production (information + production)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Information Production and Capital Allocation: Decentralized versus Hierarchical Firms

THE JOURNAL OF FINANCE, Issue 5 2002
Jeremy C. Stein
This paper asks how well different organizational structures perform in terms of generating information about investment projects and allocating capital to these projects. A decentralized approach,with small, single,manager firms,is most likely to be attractive when information about projects is "soft" and cannot be credibly transmitted. In contrast, large hierarchies perform better when information can be costlessly "hardened" and passed along inside the firm. The model can be used to think about the consequences of consolidation in the banking industry, particularly the documented tendency for mergers to lead to declines in small,business lending. [source]

The Notching Rule for Subordinated Debt and the Information Content of Debt Rating

FINANCIAL MANAGEMENT, Issue 2 2010
Kose John
This paper provides new evidence regarding the information content of debt ratings. We show that noninvestment grade subordinated issues are consistently priced too high (the yield is too low), and the reverse is true for some investment grade bonds. We relate this empirical bias to a notching rule of thumb that is used in order to rate subordinated debt without expending additional resources for information production. We propose an explanation for these findings based upon a balance between an attempt to please the companies that pay the raters versus a concern for lawsuits and regulatory investigations should ratings be too optimistic. [source]

Disclosure of reserve quantum in the extractive industries

ACCOUNTING & FINANCE, Issue 1-2 2001
Malik Mirza
We explore why some firms in the extractive industries disclose mineral reserve quantum in their annual reports and others do not. We propose that the firms' reserve disclosure policies are a function of the extent of information asymmetries, as well as information production, litigation and proprietary costs. More specifically, we propose that a firm's decisions to disclose reserves in the annual report are a function of the stage of the firm's operations, use of project financing, and the cost of measuring reserves. Empirical tests are confirmatory. [source]

Extended evidence on the use of technical analysis in foreign exchange

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 4 2006
Thomas Gehrig
Abstract This work extends earlier survey studies on the use of technical analysis by considering flow analysis as a third form of information production. Moreover, the survey covers FX dealers and also the rising fund managers. Technical analysis has gained importance over time and is now the most equally spread kind of analysis. It has by far the greatest importance in FX dealing and is second in fund management. Charts are used for shorter-term forecasting horizons while flows dominate at the shortest-term and fundamentals at longer horizons. Preferred users of each kind of analysis exhibit different views about market frictions. Copyright © 2006 John Wiley & Sons, Ltd. [source]

Bids and Allocations in European IPO Bookbuilding

THE JOURNAL OF FINANCE, Issue 5 2004
TIM JENKINSON
ABSTRACT This paper uses evidence from a data set of 27 European IPOs to analyze how investors bid and the factors that influence their allocations. We also make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO. We find that investors perceived to be long-term holders of the stock are consistently favored in allocation and in out-turn profits. In contrast to Cornelli and Goldreich (2001), we find little evidence that more informative bids receive larger allocations or higher profits. Our results cast doubt upon the extent of information production during the bookbuilding period. [source]