Steven A. Sharpe
Division of Research and Statistics,
Federal Resererve Board
20th and Constitution Avenue, NW
Washington, DC 20551
NBER Working Papers and Publications
|January 2008||Footnotes Aren't Enough: The Impact of Pension Accounting on Stock Values|
with Julia Coronado, Olivia S. Mitchell, S. Blake Nesbitt: w13726
Some research has suggested that companies with defined benefit (DB) pensions are sometimes significantly misvalued by the market. This is because the measures of pension cost and pension net liabilities embedded in financial statements, taken at face value, can provide very misleading picture of pension finances. The more pertinent information on pension finances is relegated to footnotes, but might not receive much attention from portfolio managers. But dramatic swings in the financial conditions of large DB plans around the turn of the decade focused widespread attention on pension accounting practices, and dissatisfaction with current accounting standards has recently prompted the Financial Accounting Standards Board (FASB) to take up a project revamp DB pension accounting. Arguabl...
Published: Coronado, Julia & Mitchell, Olivia S. & Sharpe, Steven A. & Blake Nesbitt, S., 2008. "Footnotes aren't enough: the impact of pension accounting on stock values," Journal of Pension Economics and Finance, Cambridge University Press, vol. 7(03), pages 257-276, November. citation courtesy of
|July 1994||Leverage as a State Variable for Employment, Inventory Accumulation, andFixed Investment|
with Charles W. Calomiris, Athanasios Orphanides: w4800
The importance of a firm's balance sheet for determining its investment and employment decisions is the central assumption of macroeconomic models of 'debt deflation' or 'debt overhang.' According to these models, firm investment decisions are influenced not only by the fundamental opportunity set of the firm, but also by the firm's existing financial condition, especially its leverage. This paper tests that assumption by examining whether the responsiveness of employment, investment, and inventory accumulation to exogenous changes in sales depend on the leverage of the firm. We find that leverage acts as an important state variable for conditioning the response of all three variables to changes in sales. We also find that this effect varies depending on the state of the economy. During ...
Published: Capie, Forrest and Geoffrey Wood (eds.) Asset Prices and the Real Economy. Macmillan, 1997.
|June 1992||Hostile Takeovers and Expropriation of Extramarginal Wages: A Test|
with David Neumark: w4101
We construct a prediction model for testing the hypothesis that firms with employees earning extramarginal wages--perhaps owing to long-term implicit contracts-were more likely to experience hostile tender offers from 1979-1989. Firms on the Compustat (active) file in 1979 comprise the domain from which targets were identified. The 1980 Census of Population is used to estimate wage equations by two-digit (SIC) industry and extract both industry wage premia as well as age-earnings profiles and age distributions of employees by industry. Firm-level estimates of employee characteristics are then constructed using the Compustat breakdown of firm sales by industry segment. Finally, event probabilities are estimated using logit and multinomial logit models. Variables related to proxies for the m...