No abstract

No abstract

This study examines the occurrence of informed trading in public debt issued by companies in the United States. I find that earnings surprises are positively associated with bond price changes prior to the release of financial report data to the public, for firms with non-investment-grade ratings. Additionally, I find that the effect appears to be driven by firms with publicly traded equity. Evidence further indicates an increase in trading activity during the time window between report period end date and filing date, for firms with larger earnings surprises.

Drawing on a comprehensive data set from Turkey (1970–2003) and using both nonparametric (data envelopment analysis) and parametric (stochastic frontier analysis) frontier methods, we estimate 16 alternative efficiency measures to study their associations with the probability of bank failures in an emerging market setting. We find that failed banks severely underperform survived banks in all forms of efficiency and that their subpar performance deteriorates closer to failure, prosperous times and bloated scales tend to precede eventual banking fatalities, managerially induced (technical) inefficiencies dominate politically induced (allocative) inefficiencies in failed banks, and banks with new ownership and affiliation with other businesses are more likely to fail. The results also caution that liquidity, capital, and currency risks combined with poor management are a lethal mix ahead of crises.

Recycling has substantial environmental and economic benefits, but the recycling industry is relatively inefficient. Approximately half of all recyclable material is not actually recycled, and this inefficiency is economically and environmentally costly. This paper investigates the potential for exchange-traded futures on recycled materials to increase efficiency for the recycling industry by improving the market quality for firms that buy and sell recycled materials. The aim of this study is to statistically analyze a novel data set of prices for recycled materials to demonstrate the potential efficiency gains to introducing exchange-traded futures on recycled materials. The theoretical basis for this financial innovation is numerous previous studies showing that introducing exchange-traded derivatives improves the market quality of the underlying asset. The results of the analysis show that price volatility of recycled materials is generally high, with monthly standard deviation greater than 6%. Price volatility of recycled materials is excessive compared to price volatility of analogous new materials. Also, stock price volatility of waste management firms is positively related to price volatility in recycled materials. Price volatility of recycled materials explains 12% of the excess stock price volatility for waste management firms. This paper includes a practical discussion of proposed specifications and standards for these new financial contracts and plans for further research studies. Along with previous studies on the listing of exchange-traded derivatives, the conclusion of the statistical analysis is that there are large potential economic and environmental benefits to listing exchange-traded futures on recycled materials.