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on Law and Economics |
| By: | Brian Cheffins; John Armour |
| Abstract: | Private equity, characterized by firms operating as privately held partnerships organizing the acquisition and 'taking private' of public companies, is currently dominating the business news due to deals growing rapidly in number and size. If the trend continues unabated, the 1989 prediction by economist Michael Jensen of 'the eclipse of the public corporation' could be proved accurate soon. This paper argues matters will work out much differently, with private equity being at least partially eclipsed. One possibility is that current market and legal conditions, which are highly congenial to public-to-private transactions, could be disrupted in ways that cause the private equity surge to stall or even go into reverse. The paper draws on history to make this point, discussing how the spectacular rise of conglomerates in the 1960s was reversed in subsequent decades and how the 1980s buyout boom led by LBO associations -- the private equity firms of the day -- collapsed. Factors that undercut conglomerate mergers and buyouts by LBO associations (e.g. the tightening of debt markets and increased regulation) potentially could do the same with the current wave of private equity buyouts, and cause at least a temporary eclipse of private equity deals. Even if conditions remain favorable to private equity, its eclipse is likely to occur in a different way. Privacy has been a hallmark of private equity, with industry leaders operating as secretive partnerships that negotiate buyouts behind closed doors and restructure portfolio companies outside the public gaze. However, assuming market conditions remain sufficiently favorable, top private equity firms, following the lead of the Blackstone Group, may well carry out public offerings. If this happens, then even if the taking private of publicly quoted companies remains a mainstream pursuit, the exercise will occur largely under the umbrella of public markets. |
| JEL: | K22 N20 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp339&r=law |
| By: | Alvin E Roth; Richard A Posner; Christine Jolls; Christopher Avery |
| Date: | 2007–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:843644000000000288&r=law |
| By: | Gómez-Sorzano, Gustavo |
| Abstract: | I apply the Beveridge-Nelson business cycle decomposition method to the time series of per capita murder in the State of Arizona (1933-2005). Separating out “permanent” from “cyclical” murder, I hypothesize that the cyclical part coincides with documented waves of organized crime, internal tensions, breakdowns in social order, crime legislation, social, and political unrest, and recently with the periodic terrorist attacks to the U.S. The estimated cyclical component of murder warns that terrorist attacks in the U.S. soil, and foreign wars fought by the country from 1941 to 2005, have affected Arizona creating estimated turning point dates clearly marked by the most tragic terrorist attacks to the nation: the shut down in power in NYC in 1965, the World Trade Center Bombing in 1993, and 9/11 2001. Other indexes already constructed include the attacks indexes for the U.S (http://mpra.ub.uni-uenchen.de/1145/01/MPRA_paper_1145.pdf), New York City (http://mpra.ub.uni-muenchen.de/4200/01/MPRA_paper_4200.pdf), and Massachusetts (http://mpra.ub.uni-muenchen.de/4342/01/MPRA_paper_4342.pdf). These indexes must be used as dependent variables in structural models for terrorist attacks, and in models assessing the effects of terrorism over the U.S. economy. |
| Keywords: | A model of cyclical terrorist murder in Colombia; 1950-2004. Forecasts 2005-2019; the econometrics of violence; terrorism; and scenarios for peace in Colombia from 1950 to 2019; scenarios for sustainable peace in Colombia by year 2019; decomposing violence: terrorist murder in the twentieth in the United States; using the Beveridge and Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks; decomposing violence: terrorist murder and attacks in New York State from 1933 to 2005; terrorist murder; cycles of violence; and terrorist attacks in New York City during the last two centuries; cycles of violence; and terrorist attacks index for the State of Massachusetts. |
| JEL: | D74 K14 O51 K42 N42 H56 C22 |
| Date: | 2007–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4360&r=law |
| By: | Carbonai, Davide; Di Bartolomeo, Giovanni |
| Abstract: | This paper investigates the market structure of the insurance business by analyzing the (interlock) linkages among companies created by their directors. We focus on the non-life business since this is a sector relatively closed with respect to the competition with other financial activities; an absence of industry competition cannot thus be compensated by other agents. We apply the graph theory to describe the network and the principal component analysis to summarize information and verify the correlation between direct interlocking and companies’ market shares. |
| Keywords: | Non-life insurance; antitrust; competition; interlocking directorates; network economics. |
| JEL: | K23 K21 K0 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4420&r=law |