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This paper discusses the American debate over price controls and economic stabilization after World War II, when the transition from a war economy to a peace economy was characterized by bottlenecks in the productive system and shortages of food and other basic consumer goods, directly affecting the living standard of the population, the public opinion, and political discourse. Specifically, we will focus on the economist Franco Modigliani and his proposal for a “Plan to meet the problem of rising meat and other food prices without bureaucratic controls.” The plan prepared by Modigliani in October 1947 was based on a system of taxes and subsidies to foster a proper distribution of disposable income and warrant a minimum meat consumption for each individual without encroaching market mechanisms and consumers’ freedom. We will discuss the contents of the plan and its further refinements, and the reactions it prompted from fellow economists, the public opinion, and the political world. Although the Plan was not eventually implemented, it was an important initiative for several reasons: first, it showed the increasing importance of fiscal policy among postwar government tools of intervention in the economic sphere; second, it showed a third way between direct government intervention and full-fledged laissez faire, in tune with the postwar political climate; third, it proposed a Keynesian macroeconomic approach to price and income stabilization, strongly based on econometric and microeconomic foundations. The Meat Plan was thus a fundamental step in Modigliani’s effort to build the “neoclassical synthesis” between Keynesian and Neoclassical economics, which would deeply influence his own career and the evolution of academic studies and government practices in the United States.

We examine the ability of co-founders of a firm to create an artificial (or “homemade”) dividend as in Miller and Modigliani (1961). We employ traditional discounted valuation in showing that the act of creating an artificial dividend may decrease the value of the firm because it can divert funds from investment to the consumption of perquisites. Only where there is complete trust in the party to which the shares are sold can a co-founder costlessly create an artificial dividend. It seems likely that a dividend policy, idiosyncratic to the firm’s founders, would be established at the founding of the firm.

This study seeks to investigate whether firms’ capital structure decisions are congruent with the assumptions underpinning the traditional trade-off theory and the pecking order theory in Ghana. Using a sample of listed firms, the dynamic system generalized method of moments (GMM) technique is applied on a balanced panel data spanning 2008–2016. The findings reveal that the financing decisions of Ghanaian firms adhere to the pecking order theory, given the established relationship between leverage and profitability, firm age, as well as firm size. The study also shows that tax does not matter for corporate leverage, departing from the tax proposition of the traditional trade-off theory. However, the negative effect of growth opportunities and risk on debt corroborates the trade-off theory. Consequently, it is postulated that the trade-off theory and the pecking order theory are not discordant in predicting firms’ capital structure decisions in Ghana.

This chapter presents both main arguments of dividend policy theories and their empirical evidence. According to Miller and Modigliani (1961), dividend decisions are not relevant to firm value in a perfect capital market. Nevertheless, there are several market frictions in the real world (e.g., information asymmetry, agency problems, transaction costs, firm maturity, catering incentives and taxes). Therefore, academics use them to develop theories which help them explain corporate dividend decisions. Particularly, signaling theory considers dividend payments as a signal about firms' future prospects since outside investors face information disadvantage. “Bird-in-hand” theory argues that investors prefer dividends to capital gains since the former have lower risk than the latter. Agency theory is developed from the conflict of interest between corporate managers and shareholders. Corporate managers have high incentives to restrict dividend payments. Furthermore, transaction cost theory and pecking order theory posit that firms prefer internal to external funds. This drives firms to hold more cash and pay less dividends. Life cycle theory explains dividend policy by firm maturity. Mature firms have fewer investment opportunities, and thus, they tend to pay more dividends. Catering theory states that dividend decisions are based on investors' demand. Firms pay more dividends since investors prefer dividends and assign higher value to dividend payers. Tax clientele theory argues that firms that have corporate dividend policy rely on the comparative income tax rates for dividends and capital gains. Under the tax discriminations against dividends, firms tend to restrict their dividends in order to increase their stock prices.

Pledging collateral to secure loans is a prominent feature in financing contracts around the world. Existing theories disagree on why borrowers pledge collateral. It is even more challenging to understand why in some countries collateral coverage exceeds, for example, 300% of the value of a loan. This study looks at the association between collateral coverage and country-level governance and various institutional proxies. It investigates the economic implications of steep collateral coverage and sketches policy options to lower ex-ante asymmetric information and ex-post agency problems. Within this framework, should a lender collect the debt forcibly on default and liquidated assets fetch prices below outstanding loan values, the lender’s loss is covered through credit insurance, which would significantly reduce the need for steep collateral coverage. This proposal may increase level of private credit, investment and growth; particularly, in a number of developing countries where collateral spread is the main inhibitor of finance.

The construct of “tradition” is commonly used in studies of society and culture and refers to historically patterned institutionalized practices that emphasize the “presentness of the past” in their transmission. However, there is “very little analysis of the properties of tradition” (Shils, 1971, p. 124), especially in the management literature. We draw on illustrative examples from Martha Stewart Living magazine to reveal the use and meanings of traditions and their relevance to understanding institutional micro-foundations in contemporary living. We investigate how organizations bundle various aspects of institutions in their presentation, and seek to advance theory on how institutions matter in everyday life.

This paper asks whether market fundamentals can explain the run-up and collapse of Enron’s stock price and price-earnings ratio. We use a variant of the discounted cash flow model proposed by Miller and Modigliani (1961) to show that the growth rates implied by the stock’s valuation have rarely been achieved in recorded business history. We also provide evidence of earnings management by the company that may have contributed to extravagant investor expectations of earnings growth. Between 1990 and 2000 the firm’s reported earnings met or exceeded analysts’ earnings forecasts 77% of the time. Furthermore, beginning in 1997 Enron used asset sales (often to related parties) to generate as much as 83% of its annual earnings.

This chapter explores the major drivers of capital structure, which is measured by using two alternative measures (total debt/equity and total debt/total assets), for Romanian firms. By employing panel-data models for a sample of non-financial companies publicly traded on the Bucharest Stock Exchange, this research examines how capital structure of the Romanian firms are affected by CEO age and several firm-specific characteristics including free cash flow, return on assets (ROA), return on invested capital (ROIC), effective tax rate, dividend payout ratio, cash ratio, current ratio, and quick ratio, where firm-level controls (total assets and firm age) are adopted. Using fixed effects estimation on panel data, we find: (1) ROIC, dividend payout ratio and liquidity ratios all negatively affect capital structure; (2) whereas ROA provides evidence of its mixed role on capital structure. Robustness checks using the generalized method of moments reinforce the negative impact of dividend payout ratio and the mixed influence of ROA, and document the varied effects of liquidity measures on capital structure.

This chapter compares the returns performance of the Islamic mutual funds (IMFs) with that of conventional mutual fund (CMF). It covers both pre- and post-ASEAN financial crisis and global financial crisis data for an overall sample of 128 IMFs and 350 CMFs. It also covers two market cycles from January 1995 to December 1998 and from January 2005 to December 2008.

The net raw returns of all expenses and market risk-adjusted return performance measurements are employed to examine the portfolios’ performance, and to capture the difference movement of the funds based on the particular market trend.

We observed that on average both portfolios outperform the market return. In general, average returns performance of IMFs is not better than the CMFs during bullish and bearish market trend periods. However, the empirical results based on time-series regression model reveal that the IMFs portfolio slightly outperform the conventional counterparts.

The study would benefit the investors and market players to consider IMFs in their portfolio selection, if in future such an expected event may occur.

The study provides insights to regulators and market players who plan to access investment plan in an emerging market, particularly in Malaysia.

The purpose of this chapter is to study corporate strategies and their evolution over the last few decades (1970–2020). The strategic issues are examined through the lens of the following activities: portfolio scope (diversification versus specialisation), structuring (integration versus outsourcing) and financing, debt-related policies (leverage) and equity (dilution versus relution). The financialisation of corporate strategies is evident at various levels (specialisation, outsourcing, leverage, relution) to the detriment of the other stakeholders concerned. It weakens the latter and calls for stronger regulation of the financial markets (particularly share buyback operations).