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Simultaneous Equations Framework (simultaneous + equation_framework)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting60%
Humanities and Social Sciences40%

Selected Abstracts

Hedging, Financing and Investment Decisions: A Simultaneous Equations Framework

FINANCIAL REVIEW, Issue 2 2007
Chen-Miao Lin
D84; G31; G32 Abstract We empirically investigate the interactions among hedging, financing, and investment decisions. We argue that the way in which hedging affects a firm's financing and investing decisions differs for firms with different growth opportunities. We find that high growth firms increase their investment, but not leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage. [source]

THE JOINT CHOICE OF AN INDIVIDUAL'S OCCUPATION AND DESTINATION,

JOURNAL OF REGIONAL SCIENCE, Issue 5 2008
Christiadi
ABSTRACT This study examines the relationship between an individual's occupation choice and destination choice. It portrays the relationship as an interaction between the supply of occupational skills by individuals and demand by different labor-market regions. The unusual merger of a multinomial logit model of occupational choice and the conditional logit model of destination choice in a simultaneous equation framework requires derivation of a unique variance,covariance matrix. Results indicate strong association between supply of (migration) and demand for (industry mix) an individual's occupational skills. These effects are especially strong for destinations experiencing slow economic growth, while relatively unimportant for high-growth locations. [source]

Fragmentation and Sprawl: Evidence from Interregional Analysis

GROWTH AND CHANGE, Issue 3 2002
John I. Carruthers
Recent years have witnessed widespread expansion of state and regional planning programs in the United States. A major purpose of these efforts is to reduce urban sprawl,low density, discontinuous, suburban,style development, often characterized as the result of rapid, unplanned, and/or uncoordinated growth, by promoting jurisdictional cooperation and regulatory consistency across metropolitan areas. This paper evaluates the efficacy of this approach by examining the relationship between governmental fragmentation and several measurable outcomes of urban development: density, urbanized land area, property value, and public expenditures on infrastructure. The four dimensions are modeled in a simultaneous equations framework, providing substantive evidence on how fragmentation and other exogenous factors affect metropolitan growth patterns. Fragmentation is associated with lower densities and higher property values, but has no direct effect on public service expenditures; less fragmented metropolitan areas occupy greater amounts of land due to the extensive annexation needed to bring new development under the control of a central municipality. The findings of the analysis lend support to state and regional planning efforts aimed at increasing cooperation among local governments, but also suggest that further research is needed in order to evaluate whether or not they produce their intended effects. [source]

Is Board Size an Independent Corporate Governance Mechanism?

KYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 3 2004
Stefan Beiner
SUMMARY Using a simultaneous equations framework with a comprehensive set of publicly listed Swiss companies, our findings suggest that the size of the board of directors is an independent corporate governance mechanism. This implies that any potential relationship between board size and firm valuation is indeed causal. However, in contrast to previous studies, we do not uncover a significant relationship between board size and firm valuation, which can be interpreted as support for the hypothesis of the existence of an optimal board size. On average, firms choose the number of board members just optimally. This indicates that cross-sectional variations in board size to a large extent reflect differences in firms' underlying environment, and not mistaken choices. ZUSAMMENFASSUNG Die Ergebnisse der Schätzung eines simultanen Gleichungssystems mit einer repräsentativen Stichprobe börsengehandelter Schweizer Unternehmen zeigen, dass die Grösse des Verwaltungsrates einen eigenständigen Corporate Governance Mechanismus darstellt. Damit kann ein möglicher Zusammenhang zwischen der Grösse des Verwaltungsrates und dem Unternehmenswert als kausal interpretiert werden. Die empirischen Ergebnisse zeigen aber keine Evidenz für einen derartigen Zusammenhang, was die Hypothese einer optimalen Grösse des Verwaltungsrates stützt. Im Durchschnitt weist der Verwaltungsrat Schweizer Unternehmen die optimale Grösse auf. Die Unterschiede in der Grösse der Verwaltungsräte der Stichprobenunternehmen können zum grossen Teil durch unternehmensspezifische Einflussgrössen erklärt werden, und sind nicht auf eine falsche Besetzung des Verwaltungsrates zurückzuführen. RÉSUMÉ En utilisant un système d'équations simultané, estimé sur l'ensemble des entreprises inscrites à la bourse suisse, nos résultats montrent que la taille du conseil d'administration résulte d'un mécanisme indépendant de gouvernance d'entreprise. Ceci implique qu'il existe véritablement un lien causal entre la taille du conseil d'administration et la valeur de l'entreprise. Néanmoins, contrairement aux études précédentes, nous n'avons pas découvert de relations significatives entre ces deux éléments, ce que l'on peut interpréter comme support pour l'hypothèse de l'existence d'une grandeur optimale du conseil d'administration. Le nombre de membres du conseil d'administration est en moyenne choisi de manière optimale. Ceci indique que la variation en coupe transversale de la taille du Conseil d'administration reflète en majeure partie des différences dans l'environnement de chaque enterprise plutôt que des mauvaises décisions. [source]

Endogeneity and the relationship between board structure and firm performance: a simultaneous equation analysis for the Athens Stock Exchange

MANAGERIAL AND DECISION ECONOMICS, Issue 6 2010
A. A. Drakos
The main goal of this paper is to examine the relationship between the three most important characteristics of the board of directors with firm performance. More specifically, we investigate whether the independence of the board, the leadership structure and the board size, are exogenous determinants to the firm's performance, using a simultaneous equations framework. Our database is composed of firms quoted in the ASE, starting from 146 observations in 2000 and ending with 232 firms in 2006. The findings suggest that the board independence and the leadership structure do not affect the firm performance. On the other hand, an inverse relationship between board size and firm performance is observed. Copyright © 2010 John Wiley & Sons, Ltd. [source]