Found 534 article(s) in category 'Financial Services'

Association of the Meaningful Use Electronic Health Record Incentive Program With Health Information Technology Venture Capital Funding

Association of the Meaningful Use Electronic Health Record Incentive Program With Health Information Technology Venture Capital Funding. Ariel Dora Stern, March 23, 2020, Paper, “Although the Health Information Technology for Economic and Clinical Health (HITECH) Act has accelerated electronic health record (EHR) adoption since its passage, clinician satisfaction with EHRs remains low, and the association of HITECH with health care information technology (IT) entrepreneurship has remained largely unstudied.Link

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Dodd-Frank Worsens Covid’s Risk

Dodd-Frank Worsens Covid’s Risk. Hal Scott, March 11, 2020, Opinion, “Coronavirus is contagious. So is financial panic. The spread of the novel coronavirus could cause a run on the financial system leading to a deep recession. Severe stock-market drops and increased demand for liquidity are warning signals. Bank equity capital has increased by $750 billion to $2.1 trillion since 2007, but a panic could still overwhelm well-capitalized banks.Link

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Banking: Intermediation or Money Creation S. Marglin, What Do Banks Do?

Banking: Intermediation or Money Creation, What Do Banks Do? Stephen Marglin, February 26, 2020, Paper, “This is a curious debate on which much seems to turn on “the stroke of a pen.” Do banks create money or are they intermediaries between depositors and borrowers? Marc Lavoie is spot on. Banks create money, and, yes, they do it with the stroke of a pen. This is true even if banks are constrained by reserve requirements and can only “lend out what they have already received in deposits.” Even if the money is out the door before the ink is dry on the loan documents by which it was created. Banks are uniquely able to create money because the loans they make create a means of payment acceptable for discharging “all debts public and private,” just like every piece of paper money issued by the Federal Reserve. And they have privileged access to a pool of funds provided by the banking system.” Link

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Investment Incentives in Near-Optimal Mechanisms

Investment Incentives in Near-Optimal Mechanisms. Scott Duke Kominers, February 25, 2020, Paper, “In a Vickrey auction, if one bidder has an option to invest to increase his value, the combined mechanism including investments is still fully optimal. In contrast, for any β < 1, we find that there exist monotone allocation rules that guarantee a fraction β of the allocative optimum in the worst case but such that the associated mechanism with investments by one bidder can lead to arbitrarily small fractions of the full optimum being achieved. We show that if a monotone allocation rule satisfies a new property called ARNIE and guarantees a fraction β of the allocative optimum, then in the equilibrium of the threshold auction game with investments, at least a fraction β of the full optimum is achieved. We also establish generalizations and a partial converse, and show that some well-known approximation algorithms satisfy the ARNIE property.Link

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Loan Types and the Bank Lending Channel

Loan Types and the Bank Lending Channel. Victoria Ivashina, February 17, 2020, Paper, “Using credit-registry data for Spain and Peru, we document that four main types of commercial credit—asset-based loans, cash flow loans, trade finance and leasing—are easily identifiable and represent the bulk of corporate credit. We show that credit growth dynamics and bank lending channels vary across these loan types. Moreover, aggregate credit supply shocks previously identified in the literature appear to be driven by individual loan types. The effects of monetary policy and the effects of the financial crisis propagating through banks’ balance sheets are primarily driven by cash flow loans, whereas asset-based credit appears to be largely insensitive to these types of effects.Link

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Corporate Leadership and Creditor Recovery Rates: Evidence from Executive Gender

Corporate Leadership and Creditor Recovery Rates: Evidence from Executive Gender. Anywhere Sikochi, February 16, 2020, Paper, “We examine the relationship between the gender of executives and corporate creditor recovery rates. Using 2,288 defaulted debt instruments, we find that female executives are associated with higher creditor recovery rates. Our findings are robust to tests that correct for potential self-selection inherent in studies of executive gender. We find evidence suggesting that conservatism in financial reporting and risk taking are potential channels through which gender affects creditor recovery rates. In additional tests, we find that the effects of executive gender persists across default types and the 2008 global financial crisis. We also show that gender diversity on the board does not moderate the effect of executive gender.Link

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Chain stability in trading networks

Chain stability in trading networks. Scott Duke Kominers, 2020, Paper, “In a general model of trading networks with bilateral contracts, we propose a suitably adapted chain stability concept that plays the same role as pairwise stability in two-sided settings. We show that chain stability is equivalent to stability if all agents’ preferences are jointly fully substitutable and satisfy the Laws of Aggregate Supply and Demand. In the special case of trading networks with transferable utility, an outcome is consistent with competitive equilibrium if and only if it is chain stable.Link

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A Preliminary Framework for Product Impact-Weighted Accounts

A Preliminary Framework for Product Impact-Weighted Accounts. George Serafeim, February 7, 2020, Paper, “While there has been significant progress in the measurement of an organization’s environmental and social performance, metrics to evaluate the impact of products once they come to market lag far behind. In this paper we provide a framework for systematic measurement of product impact in monetary terms and delve into the rationale for the framework’s seven elements. We then apply the whole framework to two competitor companies and elements of the framework across companies in different sectors of the economy to show the feasibility of measuring product impact and the actionability of the framework. Not only does this application demonstrate feasibility, it also indicates the value of impact-weighted financial statement analysis. We see our results as a first step, rather than a definitive answer, towards more systematic measurement of product impact in monetary terms that can then be reflected in financial statements with the purpose of creating impact-weighted financial accounts.Link

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Why Backstage Capital Invests in “Underestimated” Entrepreneurs

Why Backstage Capital Invests in “Underestimated” Entrepreneurs. Laura Huang, February 4, 2020, Audio, “Harvard Business School professor Laura Huang, whose new book “Edge” explores methods for turning adversity into professional advantage, is joined by Venture Capitalist Arlan Hamilton to discuss her strategy of backing entrepreneurs who have been ignored because of stereotypes, biases, and preconceptions. This episode is based off Huang and Sarah Mehta’s case, “Arlan Hamilton and Backstage Capital.”Link

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Validity Test of Implicit Capital Cost Valuation Model —Based on China’s A-Share Market

Validity Test of Implicit Capital Cost Valuation Model —Based on China’s A-Share Market. Hong Luo, 2020, Paper, “Equity capital cost plays an important role in investment strategies and asset valuation, but there is no recognized valuation model and unified model validity test method in academia so far. This paper measures the cost of equity capital of A-share listed companies in China by using five kinds of implicit capital cost valuation models widely used by domestic scholars, and tests the validity of the model from the economic and statistical perspectives. It is found that the estimated values of the five models are significantly positively correlated with the realized returns one to three years in advance. Statistical tests show that OJ, PEG and MPEG models are more effective in explaining the time series of expected returns, while OJ models are more effective in explaining the cross-sectional changes of expected returns. Therefore, OJ model can be used as an effective model to measure the cost of equity capital of A-share listed companies in China.Link

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