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We study the impact of stronger shareholder control on bondholders. We find that the passage of shareholder-sponsored governance proposals causes a decline in credit default swap spreads, indicating a net positive effect on bondholders. Evidence suggests that the direct benefit of stronger shareholder control, through the "management disciplining" channel, is larger than the combined adverse effects of directly escalating shareholder-bondholder conflict and indirectly exacerbating exposure to shareholder opportunism. Results are stronger for firms with existing high levels of shareholder-bondholder conflict and for proposals that mitigate managerial entrenchment without exacerbating risk-shifting. Finally, stronger shareholder control improves credit ratings and operating performance in the long-term. [ABSTRACT FROM AUTHOR]

This paper presents a model of a public pension fund's choice of portfolio risk. Optimal portfolio allocations are derived when pension fund management maximize the utility of wealth of a representative taxpayer or when pension fund management maximize their own utility of compensation. The model's implications are examined using annual data on the portfolio allocations and plan characteristics of 125 state pension funds over the 2000–2009 period. Consistent with agency behavior by public pension fund management, we find evidence that funds chose greater overall asset – liability portfolio risk following periods of relatively poor investment performance. In addition, pension plans that select a relatively high rate with which to discount their liabilities tend to choose riskier portfolios. Moreover, consistent with a desire to gamble for higher benefits, pension plans take more risk when they have greater representation by plan participants on their Boards of Trustees. [ABSTRACT FROM PUBLISHER]

As far as the electricity market is considered, both governments and private sector are interested in energy supply industry and so consider it essential to predict energy demand. Solution of the problem depends on availability of a model. This paper proposes a systematically developed model. It is based on a previously performed exogeneity investigation of various quantified variables. A certain nonlinear model among a collection of 100 models with different inputs is chosen as the most appropriate model. Structure of all nonlinear competing models is established according to logical conjunctive and disjunctive relationships between variables. Different combinations of the exogenous variables generate these models. At first, unacceptable models are put away applying coefficient sign significance criterion and error validity. An automated fuzzy decision-making process determines the winner model, which is a hybrid nonlinear model, among the other remaining models. [ABSTRACT FROM AUTHOR]