New NBER Research16 May 2012 Who Suffers During Recessions?Hilary Hoynes, Doug Miller, and Jessamyn Schaller examine the sensitivity of employment conditions to the business cycle during the most recent recession and compare it to earlier periods. They find that the effects of the Great Recession were felt most strongly by men, black and Hispanic workers, young people, and workers with little education. These differences can be explained mainly by variation in the sensitivity of employment to cyclical change across industries and occupations. Furthermore, the researchers find that these differences across demographic groups turn out to be remarkably stable across three decades of time, and throughout both recessionary periods and expansionary periods.
( ...more... ) 15 May 2012 The Mystery of Zero-Leverage FirmsIlya Strebulaev and Baozhong Yang find that over the period 1962-2009, around 10 percent of large, public, non-financial firms had no debt at all, and over 20 percent of them had a less than 5 percent book-leverage ratio. Yet many of these firms pay dividends, and compared to proxy firms chosen by industry and size, they are more profitable, pay higher taxes, issue less equity, and have higher cash balances. Firms with higher CEO ownership and longer CEO tenure, and family firms, are more likely to follow a zero-leverage policy, especially if they have a small board of directors with few independent directors.
( ...more... ) 14 May 2012 Corporate Disclosures and CEO AvailabilityDavid Yermack finds that when CEOs are on vacation – which he measures by determining whether a corporate jet is at an airport near a leisure destination at which the CEO owns a home – corporate announcements and disclosures decline. Favorable news is released just before CEOs leave for vacation, but any subsequent news announcements tend to wait until they return. Stock prices exhibit sharply lower volatility when CEOs are away. Yermack also finds that CEOs spend fewer days away from the office when their ownership stake in the firm is high, but also when the weather at their vacation homes is cold or rainy.
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