4 publications classées par:
type de publication
: Revue avec comité de lecture
Dimopoulos Theodosios & Stefano Sacchetto (2016). Technological Heterogeneity and Corporate Investment. Journal of Economic Dynamics and Control, 66, 20-35. [abstract]
Abstract We propose an importance-sampling procedure to improve the computational performance of the simulated method of moments (SMM) for the estimation of structural models with fixed parameter heterogeneity. The main advantage of the procedure is that it does not require to simulate observations every time that the structural parameters change during the minimization of the SMM criterion function. We illustrate the use of our method by estimating a neoclassical model of investment for a sample of US manufacturing companies, allowing the technological parameters to vary across firms.
Dimopoulos T. & Sacchetto S. (2014). Preemptive Bidding, Target Resistance, and Takeover Premiums. Journal of Financial Economics, 114(3). [abstract]
Abstract We evaluate empirically two sources of large takeover premiums: preemptive bidding and target resistance. We develop an auction model that features costly sequential entry of bidders in takeover contests and encompasses both explanations. We estimate the model parameters by simulated method of moments for a sample of US takeovers. Our estimates imply that target resistance explains the entire magnitude of the premium in 74% of successful single-bidder contests. Simulation experiments show that initial bidders have, on average, a higher valuation for the target than rival bidders, so that a relatively low initial bid is sufficient to deter a rival from entry.
Cahiers de recherche
Dimopoulos Theodosios & Hannes Wagner (2016). Corporate Governance and CEO Turnover Decisions. HEC Lausanne and SFI. [pdf] [abstract]
Abstract This paper provides a cross-country analysis to determine whether CEO turnover is a credible disciplining device for managers, whether it is effective in delivering performance improvements, and whether better governance improves the credibility and effectiveness of CEO turnover. The analysis is based on a detailed panel of 5,300 CEO years and spans two distinctly different financial systems-the U.K. and Germany-over the period 1995-2005. We find that CEOs face a credible threat of being removed for underperformance and that the hiring of new CEOs is effective in realizing large profitability improvements in the following years. We also find both relations to be virtually identical in both countries, despite large structural governance differences. Further, we consider a large number of firm-specific governance mechanisms previously proposed as indicators of better governance and find no evidence that any of them improves the observed relations between firm performance and CEO turnover. Taken together, our results suggest that replacing the CEO is an important component of successful turnarounds in underperforming firms and that this economic mechanism appears to work in nearly identical ways across very different financial markets, and across firms with very different quality of governance.
Dimopoulos Theodosios & Stefano Sacchetto (2016). Merger Activity in Industry Equilibrium. HEC Lausanne and SFI. [pdf] [abstract]
Abstract We study the effects of mergers and acquisitions on industry dynamics. We develop an infinite-horizon model of a competitive industry that features mergers, entry, and exit by heterogeneous firms over the business cycle. Merger synergies arise from improvements in productivity and cost reductions. Consistent with the empirical evidence, our model generates procyclical entry and merger activity, countercyclical exit, and acquirers' returns are negatively related to firm size. The presence of a merger market induces higher entry rates and lower exit rates, increases the mean and variance of the cross-sectional distribution of firm-level productivities, and makes mean industry productivity procyclical.