Some casual evidence suggests and popular imagination maintains that planned obsolescence is an i... more Some casual evidence suggests and popular imagination maintains that planned obsolescence is an increasingly important feature of durable goods production in modern capitalist economies (for example, Packard 1961, chaps. 5-12). How often does one hear someone exclaim, " ...
ABSTRACT We investigate the impact of mandated individual CEO pay disclosure in a natural experim... more ABSTRACT We investigate the impact of mandated individual CEO pay disclosure in a natural experiment conducted by Canada in which disclosure is unexpected with retrospective revelation of pre-disclosure pay. We match each named CEO by size and industry with a comparable CEO from the USA and employ a “difference in differences” comparison methodology using the matched sample. We find that disclosure does not appear to alter pay levels unrelated to incentives but it does enhance incentives, dramatically raising total pay in the process. Subsequently, incentive levels in the formerly opaque economy (Canada) rise rapidly to levels comparable to the transparent economy (the USA) within several years.
ABSTRACT We utilize seventeen years of comprehensive daily portfolio and trading identified at th... more ABSTRACT We utilize seventeen years of comprehensive daily portfolio and trading identified at the level of individual investors to analyze the relative trading performance of the entire population of Finnish households making their own decisions and the population of foreign nominee institutions investing other people’s money. We utilize a new methodology we dub the “holding-period-invariant (HPI) portfolio approach. The conventional calendar-time portfolio approach imposes a heroic assumption that all investors mechanically turn over their entire portfolio at a specified interval corresponding to an assumed horizon. By contrast, our methodology is entirely free of such bias and allows for the endogenous nature of investment timing decisions made by millions of informed households. Our finding that households are the superior traders is consistent with the predictions of Hayek (1945), as well as the noisy rational expectations literature, but is the reverse of the existing empirical literature derived from calendar-time portfolios.
ABSTRACT This article represents a discussion of some important issues concerning so-called &... more ABSTRACT This article represents a discussion of some important issues concerning so-called "independent" directors of large publicly traded corporations. Importantly, it draws on the findings of a recent comprehensive study by Peter Swan and David Forsberg on the effects of regulatory policy changes mandating aspects of the structure of corporate boards in Australia over the period 2001–12. This is the first time that the impact of the Australian rules has been addressed in such a manner. The Australian rules as promulgated by the Australian Security Exchange's Corporate Governance Council closely resemble those adopted in the UK and most other countries excluding the USA. These rules are peculiar in that they aim to ensure that the role of both incentivised and knowledgeable directors on boards is minimised. Such rules can leave minority shareholders exposed to management that is unchecked by adequate monitoring. Particularly relating to the application of such rules to banks and insurance companies, recent evidence shows that they have helped to promote the onset and severity of financial crises such as the global financial crisis by degrading governance standards. Thus evidence suggests that financial regulators are part of the problem, not the solution, to attaining global governance rules that promote successful outcomes and financial stability.
Some casual evidence suggests and popular imagination maintains that planned obsolescence is an i... more Some casual evidence suggests and popular imagination maintains that planned obsolescence is an increasingly important feature of durable goods production in modern capitalist economies (for example, Packard 1961, chaps. 5-12). How often does one hear someone exclaim, " ...
ABSTRACT We investigate the impact of mandated individual CEO pay disclosure in a natural experim... more ABSTRACT We investigate the impact of mandated individual CEO pay disclosure in a natural experiment conducted by Canada in which disclosure is unexpected with retrospective revelation of pre-disclosure pay. We match each named CEO by size and industry with a comparable CEO from the USA and employ a “difference in differences” comparison methodology using the matched sample. We find that disclosure does not appear to alter pay levels unrelated to incentives but it does enhance incentives, dramatically raising total pay in the process. Subsequently, incentive levels in the formerly opaque economy (Canada) rise rapidly to levels comparable to the transparent economy (the USA) within several years.
ABSTRACT We utilize seventeen years of comprehensive daily portfolio and trading identified at th... more ABSTRACT We utilize seventeen years of comprehensive daily portfolio and trading identified at the level of individual investors to analyze the relative trading performance of the entire population of Finnish households making their own decisions and the population of foreign nominee institutions investing other people’s money. We utilize a new methodology we dub the “holding-period-invariant (HPI) portfolio approach. The conventional calendar-time portfolio approach imposes a heroic assumption that all investors mechanically turn over their entire portfolio at a specified interval corresponding to an assumed horizon. By contrast, our methodology is entirely free of such bias and allows for the endogenous nature of investment timing decisions made by millions of informed households. Our finding that households are the superior traders is consistent with the predictions of Hayek (1945), as well as the noisy rational expectations literature, but is the reverse of the existing empirical literature derived from calendar-time portfolios.
ABSTRACT This article represents a discussion of some important issues concerning so-called &... more ABSTRACT This article represents a discussion of some important issues concerning so-called "independent" directors of large publicly traded corporations. Importantly, it draws on the findings of a recent comprehensive study by Peter Swan and David Forsberg on the effects of regulatory policy changes mandating aspects of the structure of corporate boards in Australia over the period 2001–12. This is the first time that the impact of the Australian rules has been addressed in such a manner. The Australian rules as promulgated by the Australian Security Exchange's Corporate Governance Council closely resemble those adopted in the UK and most other countries excluding the USA. These rules are peculiar in that they aim to ensure that the role of both incentivised and knowledgeable directors on boards is minimised. Such rules can leave minority shareholders exposed to management that is unchecked by adequate monitoring. Particularly relating to the application of such rules to banks and insurance companies, recent evidence shows that they have helped to promote the onset and severity of financial crises such as the global financial crisis by degrading governance standards. Thus evidence suggests that financial regulators are part of the problem, not the solution, to attaining global governance rules that promote successful outcomes and financial stability.
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Papers by Peter Swan