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In East Asian economies, about 2/3 listed firms are controlled by family shareholders. In the US and West European, the proportions of family firms are about 33% and 44%, respectively. Thus, family-controlled listed firms are common in almost every nation. In Taiwan, nearly 70% of listed firms are family-controlled. Many previous studies have pointed out that family firms are playing an important role in global economic activities. The equity structures and management ideas of family firms are different from those of common firms. For instance, family members possess decisive equities and will usually take positions of directors or top managers. They may usually view their firms as an asset inherited from forefathers, and they should pass it on to their next generations. The impact of these differences on firm¡¦s financial decisions has become a main research focus in recent years. Previous studies of family firms mainly placed the focus on the impact of family factors on corporate performance, but this study would attempt to investigate the impact of family factors on debt decisions from the perspectives of debt-financing decision and cost of debt-financing. First of all, this study probed into whether family and non-family firms have differences debt-financing decisions. Empirical findings indicated that family firms have a lower debt ratio and a 0.2813% lower cost of debt than non-family firms. A further comparison on the factors of debt decisions showed that the difference in the impact of family and non-family firms on debt levels lies in mainly three aspects, including depreciation tax shield, operational risk, and firm size. In the aspect of cost of debt-financing, family firms are relatively more sensitive to firm size, debt ratio, and credit risk. Previous studies that applied the agent theory to investigate debt decisions focused more on the problems of debt agency problem and seldom used the inter-relationship between equity agency problem and debt agency problem to discuss the impact of equity agency problem on debt decisions. The problems of equity agency of family firms encompass the traditional equity agency between the manager and shareholders and core equity agency between controlling shareholders and external shareholders. Besides, family ownership and management can reduce the problems of traditional equity agency, and controlling shareholders using the pyramid structure of equities and cross-holding to enhance control right will increase the problems of core equity agency. Thus, based on the problems of equity agency problem, the family factors can be divided into family ownership, enhancement of control, and family management to investigate the respective impact on debt-financing decisions. In the aspect of debt-financing, it was empirically discovered that higher family ownership would lead to a closer relationship between firm value and the wealth of family shareholders. Debt financing would be avoided to reduce financial risks and maintain the wealth of family shareholders. A positive correlation existed between debt ratio and the difference between family control and family ownership, implying when the difference between family control and family ownership is higher, the problems of core equity agency between controlling shareholders and small shareholders will be more serious, and the company will be inclined to adopt debt-financing to acquire long-term capitals. The estimate coefficient of the effect of family management on debt ratio is not significance. Thus, whether the CEO is taken by a family member will not affect debt-financing decisions. In the analysis of control level, when the control level is low, firms are inclined to adopt debt-financing decisions to reduce the effect of equity dilution. On the contrary, when the control level is high, in order to avoid the loss of control benefit caused by debt monitoring, firms will be inclined to avoid debts. As a result, control and debt ratio are in an inverted U-shaped relationship. In addition, for family firms, the maintenance of control and risk control are important factors affecting their debt-financing decision. In the aspect of cost of debt, family ownership can reduce the cost of debt-financing. If the non-linear relationship of family ownership is considered, the impact of family ownership on the cost of debt-financing is non-linear and in an inverted U shape. The maximum value is 8.64%. When the family ownership exceeds 17.9%, the effect of family ownership on the cost of debt financing is negative. As the minimum family ownership was defined as 10% in this study, and the average family ownership among the samples was 21%, it could be inferred that higher family ownership would lead to a lower cost of debt-financing. In a comparison with Anderson et al. (2003), it was discovered that the average family ownership has negative influence on the cost of debt, but for the family firms in the US, higher family ownership would reduce its negative influence on cost of debt, and for domestic family firms, higher family ownership would increase its negative influence on the cost of debt. The Control-enhancing mechanisms will increase core equity problem and cost of debt, and the relationship between control enhancement and cost of debt are not in a non-linear relationship. Creditors conceive that their mortgage will be more secured if family members take the position of CEO. Thus, family CEO can reduce the cost of debt-financing.

Comments and Discussion : Kitaura Koji

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WirtschaftsUniversiẗat, Diplomarbeit u.d.T.: Pichler, Marc: Ein @Einblick in asset backed securities--Wien, 2008.

This thesis employs economic experiments and empirical methods to understand the role of comparison income in the demand of individuals' debt. It then investigates the determinants of UK individuals' attitude towards debt, focusing on the role played by comparison income. It uses data from the British Household Panel Survey (BHPS) and the New Earnings Survey (NES). The central contributions of this thesis include: (i) the implementation of a life-cycle experiment testing for the differences in consumption levels between Individual and Group treatments; (ii) the computation of a proxy for comparison income using both the British Household Panel Survey (BHPS) and the New Earnings Survey (NES); and (iii) the extension of individual demand for debt models with comparison income as main factor. This is achieved by designing and conducting human-subject experiments, wherein individuals execute life-cycle tasks. Results show evidence of larger consumption levels in the Group treatment as compared to the Individual treatment; supporting the notion of comparison consumption. In addition, the empirical methods consist in a tobit and fixed effect models, where individuals' demand for debt is function of several financial and demographic factors, including comparison income. Results show that comparison income plays a significant part in the individuals' demand for mortgage debt and non-mortgage debt. Besides, findings suggest that debtors are more likely to hold favourable attitude towards debt; and this is exacerbated by household relative income. Overall, results support the hypothesis of aspiration paradox (Olsen, 2008); which affirms individuals' aspirations may lead them to incur debt beyond their financial means.

Sub-Saharan Africa entered the 1980s faced with a crisis of unprecedented proportions. The economies of the region which were already in decline by the late 1970s, were in danger of collapse. The severity of the crisis was also reflected in rising indebtedness, social decay and political instability. To tackle it, African leaders met at an extraordinary economic summit in Lagos in 1980 and adopted a common strategy which became known as the Lagos Plan of Action. The crisis in Sub-Saharan Africa is part of a general world-wide economic recession stemming from a period of economic decline in the leading industrial economies. As a result, the leading industrialised countries and international institutions designed strategies to tackle the crisis both at the global level and in the developing countries such as those in Sub-Saharan Africa. For Africa, the strategy adopted by the World Bank and the IMF was that of structural adjustment. The orthodox approach of the World Bank generated controversy as to its suitability to the African situation. This disagreement was a reflection of conflicting political interests as well as power relations both internationally, and within African states. This thesis analyses the impact of the politics of structural adjustment programmes in Africa, with special reference to Ghana and Nigeria between 1983-1990. The arguement is that orthodox structural adjustment has failed to reverse the decline in Africa largely because of continuing disagreement between African governments and international institutions over the content and direction of adjustment. The study is presented over eight chapters. The introductory chapter sets the agenda. Chapter one covers the international dimension of the African crisis, while chapter two looks at the internal dimension. Chapter three contains a detailed analysis of the international politics of structural adjustment. Chapters four and five discuss the adjustment programme in Ghana and its impact on the country's political economy. The Nigerian experience is similarly examined in chapters six and seven. The conclusion, chapter eight, addresses the issues behind the failure of orthodox adjustment in Africa and makes recommendations.

This thesis comprises an introduction and four distinct chapters. Its central theme is the role played by the allocation of asset ownership rights in motivating asset-specific investment, when contracts are incomplete. Chapter 1 considers the debt financing of an entrepreneurial project. To encourage asset-specific investment and loan repayment, debt structure should minimise both (voluntary) strategic default and liquidation following (unavoidable) liquidity default. Liquidation incentives are critical and shown to depend crucially on creditor characteristics. In general, borrowing from multiple creditors with contrasting attributes is found optimal. The benefits of borrowing from a creditor also undertaking project trade are explored. In Chapter 2 the relationship between asset ownership and investment specificity is examined. Asset control encourages efficient, asset-specific investment by owners. However, lock-in fears lead non-owners to choose widely applicable but less effective investment. The interactions between asset ownership, firms' technology choices and workers' investments are considered. In particular, it is found that the costs and benefits of individual integration decisions are sensitive to overall industry structure. The specificity framework is extended in Chapter 3 to model a retailer's product choice. Vertical merger encourages investment in integrated supply and foreclosure of non-integrated manufacturers. An anti-competitive as opposed to an efficiency interpretation depends delicately on the trade-off between the benefits of supplier-specific investment and multi-product retailing. Where retailers compete, it is shown that vertical integration implements effective competition-reducing differentiation strategies. In Chapter 4 vertical integration, through the incentive effects of asset ownership, is shown to amount to a specialisation decision. The attractions of encouraging investment in input as opposed to final good production depend on the effectiveness of investment at each manufacturing stage, and the scale benefits of input sales to generally rivalrous downstream firms. These benefits are sensitive to downstream competitive pressures, yielding a potentially non-monotonic relationship between competition and integration.

<p>In comparison to Mark and Luke, Matthew's Gospel contains a striking preponderance of economic imagery, especially in passages dealing with sin, righteousness, and divine recompense. This cluster of economic terms is found in every strand of tradition in Matthew's Gospel, and frequently appears to be the result of Matthean redaction. A good chunk of this language occurs in five uniquely Matthean parables dealing either with the pricelessness of the kingdom or judgment and reward (the hidden treasure in 13:44; the pearl in 13:45-46; the parable of the unforgiving servant in 18:23-35; the parable of the workers in the vineyard 20:1-16; the sheep and the goats in 25:31-46). Matthean additions to the triple tradition also tend to contain economic language. </p><p> In this dissertation I begin by analyzing Matthew's economic language against the backdrop of similar language in other early Jewish and Christian literature. I then go on to examine the import of this language for the narrative as a whole, arguing that some of the Gospel's central claims about Jesus emerge from this conceptual matrix. To be more specific, the narrative provides a coherent description of how Jesus saves his people from their sins and comes to be enthroned as Son of Man. Matthew draws on images of exile and debt-bondage to depict the people Jesus came to save as captives because of the debt of their sins. Jesus is introduced as the one born to save his people from their sins (1:21), and throughout the Gospel he does this by teaching them how to find debt forgiveness and store up treasure in the heavens in order to acquire eternal life. From the time Jesus begins predicting his death and resurrection he also teaches his disciples to follow him in giving their lives and being repaid with resurrection (16:24-28; 19:29), participation in the rule of the Son of Man (19:27-28), and the price of release for others who are in captivity. The passion narrative portrays the very repayment Jesus told the disciples that both he and they would receive: Jesus is raised from the dead, given all authority as Son of Man, and earns the ransom-price for the many. The end of the age remains in the future, and so suffering and doubt persist. Nevertheless, God's repayment of Jesus' self-giving is a foretaste of the coming settling of accounts.</p> / Dissertation

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