Chapter 1 studies wage contracts and their roles in workers’ employment and wage dynamics, as well as the implications on income inequality. I develop an on-the-job search model that allows for different types of wage contracts. Using indirect inference method, I am able to estimate the structural model and evaluate the impact of different productivity elements, including firm productivity, returns to routine task and individual effort. The model is able to capture key measures on worker’s labor market mobility, wage growth and distribution. It also allows me to evaluate the implications of productivity change on income inequality through counterfactual analysis. I show that these productivity elements have different implications on income inequality, and the use of performance based wage contract is an important channel for income polarization at the top percentiles. Chapter 2 studies the effect of overtime pay on workers’ working schedule and income. How overtime pay regulations affect the labor market is a controversial yet relatively under- studied topic. In this paper, I study the effect of the revision to statutory overtime pay in 2004 on worker’s income and hours of work. Using monthly panel data on workers’ working hours and income that covers the period of rule change, I find evidence that for workers who gained statutory overtime pay coverage under the new rule, hours and income increased. I also find spillover effects on overtime pay premium and overtime schedule for workers who are not directly affected by the rule change. My results suggest that the standard competitive model does not capture well the labor market for overtime work, and government regulations could reduce labor market frictions. Chapter 3 studies debt covenant violations and their effects on corporate innovation. Exploiting the state of debt contract covenant violation and the institutional feature that creditors obtain increased control right of the firm, the paper examines the effect of increased creditor governance well before the state of bankruptcy on corporate innovation. Consistent with the view that increased creditor monitoring has disciplining effect on the managers, I find no significant change in the R&D spending, significant but model decrease in the total patent counts two years forward as well as significant and large positive impact on the citation counts of the patents. The results demonstrate that increased creditor governance is overall beneficial to firm innovation.

In the contemporary global neoliberal economy financial debt shapes indebted subjectivity. It also drastically alters education philosophy, policy and practice. This dissertation analyzes in an interdisciplinary fashion the impacts of financial debt on subjectivity and educational experience. As a work of philosophy of education, it also examines the ways in which education can be a practice that liberates subjectivity from debt’s delimiting force. Emancipatory education theory and practice play an important role in current and future struggles for debt jubilee.

The issue of the high levels of external debt in the poorest nations has become an increasing matter of concern for the industrialized nations due to the difficulties that heavily indebted nations have with sustaining economic growth. In 2005 the Group of Eight pledged to cancel the debt of the world?s most indebted countries that are eligible for the relief under the Highly Indebted Poor Country (HIPC) initiative. Based on this pledge, the World Bank and the International Monetary Fund approved the debt cancellation in March 2006, with debt cancellation commencing on June 1, 2006. As a reaction, this thesis provides an overview of arguments in favor of debt cancellation as well as against debt cancellation as they are introduced in economic literature. After presenting and taking all the points of view into consideration this thesis comes to the conclusion whether the debt cancellation is a good way to go.

The object of this thesis is the analysis of the external debt of countries which are members of the G-8. The external debt is researched through individual sectors of economy. Also there are described debt instruments and all the factors which can influence the external debt. The last part of this thesis analyses situation and development of individual debt instruments and the impact on total external debt.

Widespread losses during the recent financial crisis have raised concerns that equitybased CEO compensation (stocks and stock options) causes risky bank policies. This has led to the need to understand whether CEO pay can be re-structured such that it dampens risk-taking incentives. Against this background, this thesis analyses if debtbased compensation (also known as inside debt and consisting of pension benefits and deferred compensation) motivates CEOs to pursue risk-reducing bank policies. Over three decades of research into executive compensation has not explored the impact of inside debt, primarily due to lack of detailed data on inside debt which only became available after 2006 in the United States (US). The paucity of empirical work on inside debt is particularly unfortunate, given that the value of inside debt is often substantial. This dissertation provides one of the first empirical investigations into the impact of inside debt on bank risk-taking by determining whether CEO inside debt leads to less risky behaviour, through three policy decisions that are capable of increasing the overall risk of the bank. First, this thesis focuses on the payout policies of banks. Bank payouts divert cash to shareholders, while leaving behind riskier and less liquid assets to repay creditors in the future. Payouts, thus, constitute a type of risk-taking that benefits shareholders at the expense of creditors. The results presented in this thesis indicate that higher inside debt results in more conservative bank payout policies. Specifically, CEOs paid with more inside debt are more likely to cut payouts and to cut payouts by a larger amount. Reductions in payouts occur through a decrease in both dividends and repurchases. The results also hold over a sub-sample of banks which received government support in the form of the Troubled Asset Relief Program (TARP) where the link between risk-taking and payouts is of particular relevance because it involves wealth transfers from the taxpayer to shareholders. Second, this thesis tests the impact of inside debt on the risk implications of bank acquisitions. Bank acquisitions are large scale investment decisions that can affect bank risk. To this end, this thesis shows that higher inside debt holdings motivate CEOs to pursue acquisitions that result in lower bank default risk. It also prevents CEOs from using acquisitions to shift risk to the financial safety-net. Since the safety net is underwritten by the taxpayer, the results show that CEO inside debt has a measurable impact on the subsidy which bank shareholders obtain from taxpayers. Third, the thesis shows that inside debt plays a critical role in influencing bank capital holdings. Higher equity capital provides creditors with a larger loss-absorbing equity buffer to protect the value of their claims on bank cash flows. Ceteris paribus, higher equity protects creditors from losses. To this end, this thesis shows that higher inside debt results in motivating banks to hold higher capital, whether defined using regulatory or economic terms. Higher inside debt also results in reducing the estimated value of the taxpayer losses. Furthermore, banks with higher inside debt are at a lower risk of facing capital shortfalls. Taken together, the study provides insights on how incentives stemming from inside debt impact bank policies in a manner that protects creditor interests. Inside debt can help in addressing excessive risk-taking concerns by aligning the interests of CEOs with those of creditors, regulators, and the taxpayer. This thesis makes a novel contribution to the banking literature by providing evidence on the implications of inside debt in the US banking industry. This work should be interpreted as part of a wider body of research which demonstrates that inside debt matters for bank risk-taking and that this role of inside debt should be recognized more widely in ongoing discussions on compensation incentives in banking.

This paper studied earnings management through Bad Debt Expense. The goal of this thesis was to see if managers manipulate Bad Debt Expense in order to smooth their bottom line. In order to test this, I created several different variables relating to Bad Debt Expense and some control variables for Net Income. I found that my results are consistent with earnings management. The results are not clearly stated and therefore I cannot say that earnings management is definitely happening, but it is a possibility.

Magister Commercii - MCom / 1. Taxes are an important source of government revenue (income). A failure by the government to collect sufficient taxes to cover for its ever increasing expenditures, engenders fiscal problems. Amongst others the government is compelled to borrow to finance its budget short fall. In this instance, should the government borrow domestically or offshore to finance its short fall . 2. Amongst the theories discussed in this paper, are the views of the Neoclassical Keynesian and the Ricardi an schools of thought. Further more, South African theories on government debt are also discussed. 3. There is a considerably large number of indicators that can be used to determine an appropriate level of both domestic and foreign debt of a country. Certain well establish criteria such as the ratio of foreign interest payments to exports, the ratio of foreign debt to gross domestic product, the ratio of·govemment debt to gross domestic product and the ratio of foreign debt to exports, are amongst the pool of indicators that can be used. However, the following indicators have been identified as the most commonly used in the analysis of budget deficits, and they are; ratio of deficit before borrowing and debt repayment to GDP, the ratio of government debt to GDP, the ratio of interest payments to government expenditure, the level of real interest rates relative to economic growth and the net asset value or net worth of the government. 4. Deficit financing refer to the ways in which the budgetary gap is financed. Overreliance on domestic borrowing may mean high real interest rates and falling investment, and overreliance on foreign borrowing can cause appreciating real exchange rates and unsustainable external indebtedness, amongst others. 5. Amongst the available remedies for debt ills in this country, is the suggestion to significantly cut government expenditure. However, realities currently confronting the authorities, like the increase in public servants as a result of the abolishment of homelands and the constitutionally guaranteed employment of civil servants from the old order, automatically put pressure on public consumption. 6. On the international front, South Africa is underborrowed. In this regard favour should go more for offshore borrowing. Certainly South Africa has to generate the means of meeting debt obligations by running a surplus of exports over imports of goods and services. The bulk of the country's debt is of domestic origin which account for well over 90 % of total debt. The current anti inflationary monetary policy with its concomitant high interest rates, makes domestic borrowing more costly.

本文根據Detragiche (1992)的模型進行延伸，從原先的一財模型變成兩財模型。若貿易財為資本密集財時，且人們偏好目前消費甚於未來消費時，會生過度消費與過度投資的現象，進而形成了債務危機。我們可以發現，隨著時間的增長，貿易財的消費量會逐漸下降，而外債的存量會愈來愈高﹔到無窮期時，消費量會趨近於O，負債的情況仍繼續存在，這使得債務國發生了債務危機，也產生了賴債的可能性。 債權國為了減低自身損失，會提出債務削減方案以期望債務國願意進行重新協商。對債務國而言，需有夠大的誘因才能吸引期進行談判，此誘因為透過協商可增加其消費數量，進而提高福利水準。或是在期初直接對債務國設立借款上限，當達到借款上限時，無法再向債權國借款，以免受到賴債的傷害。當達到借款上限時，經濟體會變成一封閉體系，除了將出口所得支付債款外，其餘金錢僅能投入國內資本市場。此時消費與每人資本存量會下降，導致投資下降，利率的上升和工資的下跌。

Thesis (Ph. D.)--University of Hong Kong, 2007. / Title proper from title frame. Also available in printed format.

We examine the financing choices of undiversified large shareholders or owner-managers in a continuous time structural model with rational expectations. The interplay between the objective of the undiversified, self-interested owner-manager who controls the firm and the valuation of the firms marketed claims by well-diversified outside investors, has a major impact on leverage and debt maturity choices as well as credit spreads. The effect of this interplay is particularly significant in a world where the representative investor (who determines asset prices in the economy) is risk-averse leading to nonzero market prices of systematic risk and risk premia of the firms investment opportunities. In a perfect information framework with no taxes or bankruptcy costs, we show that, the owner-manager could, depending on the projects characteristics, finance them exclusively with debt, exclusively with equity, or with a combination of equity and debt. Ceteris paribus, leverage increases with the expected growth rate of firm value under its investment opportunities, and decreases with its volatility. Debt maturity varies non-monotonically in a U-shaped manner with the expected growth rate, and decreases with the volatility. Our results reconcile empirical evidence on the variation of financing choices with firm characteristics that is not completely consistent with previous theories. The significant impact of the expected returns (therefore, risk premia) of firms investment opportunities on their leverage ratios, debt maturities, and credit spreads are important implications of our theory that cannot be obtained in these models or in models in which all agents are risk-neutral so that risk premia are zero. We empirically test the implications of our theory for the relationships among firms financing and debt maturity choices and the expected growth rate and volatility of their asset values. Controlling for all the significant determinants of firms financing and debt maturity choices identified by earlier studies, we show significant empirical support for our predictions.