Documento de Trabajo

The behavior of stock returns in the Asia-Pacific mining industry following the Iraq war

In this article, we pursue to determine which mining firms have seen their stock returns become more sensitive to fluctuations in energy prices, over a time period predominated by the political turmoil caused by 9/11 and the subsequent invasion of Iraq. By resorting to wavelets and spatial statistics, we characterize the behavior of volatility and

The Role of Outside Options in Auction Design

This paper studies revenue maximizing auctions when buyers’ outside options depend on their private information. The set-up is very general and encompasses a large number of potential applications. The main novel message of our analysis is that with type-dependent non-participation payoffs, the revenue maximizing assignment of objects can crucially depend on the outside options that

Multi-period hedge ratios for a multi-asset portfolio when accounting for returns comovement

This article presents a model to select the optimal hedge ratios of a portfolio comprised of an arbitrary number of commodities. In particular, returns dependency and heterogeneous investment horizons are accounted for by copulas and wavelets, respectively. We analyze a portfolio of London Metal Exchange metals for the period July 1993-December 2005, and conclude that

Sequential Procurement Auctions and Their Effect on Investment Decisions

In this paper we characterize the optimal procurement mechanism and the investment level for an environment where two projects must be adjudicated sequentially, and the winner of the first project has the opportunity to invest in a distributional upgrade for its costs in the second project. We study 4 cases, based on the commitment level

Socioeconomic status or noise? Tradeoffs in the generation of school quality information

This paper calculates a time series of simple, standard measures of schools’ relative performance. These are drawn from a 1997-2004 panel of Chilean schools, using individual-level information on test scores and student characteristics for each year. The results suggest there is a stark tradeoff in the extent to which rankings generated using these measures: i)

Mergers and CEO power

In this paper a simple model of mergers in which synergies, private benefits and CEO power play a crucial role is proposed. A merger is modeled as a bargaining process between the acquiring and target board with the gains from a merger divided according to Rubinstein’s alternating-offer game with inside options. Boards consider both firm

Task-Specific Training and Job Design

This paper provides a simple theoretical framework based on a new type of human capital introduced by Gibbons and Waldman (2004), called task-specific training, to understand job design. Mainly, in the presence of task-specific training, promotions might result ex-post in the underutilization of human capital and thus firms at the time of designing jobs should

Performance of an economy with credit constraints, bankruptcy and labor inflexibility

We present a static general equilibrium model of an economy with agents with heterogenous wealth and endogenous credit constraints due to moral hazard. Credit constraints give rise to inefficiencies which are larger if wealth is distributed more unequally. We show that increases in the loan recovery rate improve the efficiency of the economy and raise

Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation for renegotiations that occur with no apparent holdup. We argue that they are used by political incumbents to anticipate infrastructure spending and thereby increase the probability of winning an upcoming

La dinámica industrial y el financiamiento de las pyme

Las pyme pagan más que las empresas grandes por su financiamiento, se les exigen garantías, se las financia a plazos cortos y muchas no se pueden endeudar. Se piensa que estas prácticas son fallas de mercado que deberían corregirse con intervenciones regulatorias. Sin embargo, nosotros argumentamos que son respuestas apropiadas a (i) el mayor costo

Using School Scholarships to Estimate the Effect of Government Subsidized Private Education on Academic Achievement in Chile

This paper estimates the impact of private education on low-income students in Chile. We attempt to reduce selection bias by using reduced-tuition paying, low-income students in private schools as the treatment group, based on our finding that these students were, to some extent, randomly selected out of the public school control group. Propensity score matching

What Drives Capital Structure? Evidence from Chilean Panel Data

There is an extensive literature on the determinants of capital structure for developed countries, but little has been said about emerging economies. This article analyzes the driving forces of capital structure in Chile for the period 1990-2002. We study aggregate leverage and interest-bearing liabilities in isolation for all firms, and firms segmented by economic sector.