We empirically examine the trade-off theory of capital structure, allowing for costly adjustment. After confirming that financing behavior is consistent with the presence of adjustment costs, we use a dynamic duration model to show that firms behave as though adhering to a dynamic trade-off policy in which they actively rebalance their leverage to stay within an optimal range. We find that firms respond to changes in their equity value, due to price shocks or equity issuances, by adjusting their leverage over the two to four years following the change. The presence of adjustment costs, however, often prevents this response from occurring immediately, resulting in shocks to leverage that have a persistent effect. Our evidence suggests that this persistence is more likely a result of optimizing behavior in the presence of adjustment costs, as opposed to market timing or indifference.

In 2006 all ECB publications feature a motif taken from the €5 banknote. This paper can be downloaded without charge from

More than two decades after non-traditional export crops (NTXs) were introduced to the central highlands of Guatemala to link farmers to global markets and foster rural development, this study uses duration analysis to explore how time-varying household characteristics and external trends play into both the adoption and diffusion processes of NTX among smallholders. Adoption was widespread and rapid, which led the project to be hailed as a pro-poor success, reaching all but the smallest landholders. Potential benefits of NTXs have proven to be high, but constraints to sustained adoption also numerous, particularly in the second decade of the period considered. Over time, more than two-thirds of adopters eventually dropped out, reverting back to more traditional crops, or leaving agriculture altogether. Based on a second round of a 20-year panel survey carried out by the authors, the analysis suggests that smallholders are quite responsive to price incentives when making their repeated decision to continue adopting overtime. Also, in line with previous findings, land size does not seem important in the decision to adopt. However, land quality emerges as a significant factor in prolonging NTX production over time. Overall, the findings suggest that, in the long-run, NTX production does not appear to have been as pro-poor as initially hoped, and that institutions and policy interventions were able to only partially offset these difficulties in favor of lessendowed farmers. 1

Consider a nonseparable model Y = R(X; U) where Y and X are observed, while U is unobserved and conditionally independent of X. This paper provides the first nonparametric test of whether R takes the form of a transformation model, meaning that Y is monotonic in the sum of a function of X plus a function of U. Transformation models of this form are commonly assumed in economics, including, e.g., standard specifications of duration models and hedonic pricing models. Our test statistic is asymptotically normal under local alternatives and consistent against nonparametric alternatives. Monte Carlo experiments show that our test performs well in finite samples. We apply our results to test for specifications of generalized accelerated failure-time (GAFT) models of the duration of strikes and of marriages.

About 40 percent of attempts to sell a house end with the seller not selling. This aspect of behavior has not been studied carefully and, by organizing the data in a way that reveals the behavior of sellers instead of listings, I consider some hypotheses related to the ability of a market process to efficiently allocate resources. First, a change in market conditions may cause the seller to change their decision between the time of listing and the end date. Second, the seller may enter the market as a test and find that the buyers ’ willingness-to-pay is less than their willingness-to-accept. Third, the seller may end a listing because they are dissatisfied with a broker and wish to switch to a new broker. There is some support for each hypothesis.

This study documents behavior consistent with herding in voluntary disclosure decisions and investigates two possible reasons for this phenomenon. Based on theories of social learning and rational herds, herding in disclosure decisions may be due to managers ’ use of information reflected in the past disclosure decisions of other firms (informational herding), and/or managers ’ incentives to maintain or build a good reputation with investors (reputational herding). Employing a duration model for repeated events, I analyze the timing of capital expenditure forecasts for a broad sample of disclosing and nondisclosing firms. Results show that a firm’s propensity to release capital expenditure forecasts is positively associated with the proportion of prior disclosing firms within its industry, thus, supporting arguments of herding. This association is significantly higher for less capital-intensive firms and firms operating in highly competitive industries which suggests that incentives to herd are greater for firms facing relatively high competition. To further distinguish between informational and reputational herding, I investigate whether the tendency to herd varies with the content and precision of other firms ’ forecasts, and with the level of managerial

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of New England and is conducting in–theater exercises. (9/5/2011 By PO2 Jonathan Chandler)

Combat Center Twentynine Palms, California, which allows active and reserve Marines and sailors from 38 states to train together as a seamless Marine air-ground task force. (7/10/2012 By Sgt Deanne Hagstrom)

Le CIRANO est une corporation privée à but non lucratif constituée en vertu de la Loi des compagnies du Québec. Le financement de son infrastructure et de ses activités de recherche provient des cotisations de ses organisations-membres, d'une subvention d'infrastructure du ministère de l'Industrie, du Commerce, de la Science et de la Technologie, de même que des subventions et mandats obtenus par ses équipes de recherche. La Série Scientifique est la réalisation d'une des missions que s'est données le CIRANO, soit de développer l'analyse scientifique des organisations et des comportements stratégiques. CIRANO is a private non-profit organization incorporated under the Québec Companies Act. Its infrastructure and research activities are funded through fees paid by member organizations, an infrastructure grant from the Ministère de l'Industrie, du Commerce, de la Science et de la Technologie, and grants and research mandates obtained by its research teams. The Scientific Series fulfils one of the missions of CIRANO: to develop the scientific analysis of organizations and strategic behaviour. Les organisations-partenaires / The Partner Organizations •Ministère de l'Industrie, du Commerce, de la Science et de la Technologie.