Working Paper
Corporate governance, entrenched labor, and economic growth
Schmid, Frank A.; Emmons, William R. (2001)
The German system of codetermination contributes to the entrenchment of labor. We show in a two-period model of project choice that entrenched labor leads to underinvestment and overstaffing. We provide empirical evidence that German firms subject to codetermination with equal representation of workers on supervisory boards during 1989-93 were, on average, overstaffed. In addition, the fraction of employees in codetermined firms has decreased over time. The expanded reach of codetermination during the mid-1970s therefore may have contributed to the deterioration of German economic growth ...
Working Papers , Paper 2001-023

Journal Article
Castles in the sky?
Schmid, Frank A. (2002-09)
National Economic Trends , Issue Sep

Journal Article
Macroeconomic news and real interest rates
Schmid, Frank A.; Kliesen, Kevin L. (2006-03)
Economic news affects the perceptions of investors, forecasters, and policymakers about the strength or weakness of the economy. These expectations are updated on the basis of regularly occurring surprises in macroeconomic announcement data. The response of asset prices to positive or negative announcement surprises has been a regular feature of the literature for more than 20 years. In this vein, the authors evaluate the responses of the yield of 10-year Treasury inflation-indexed securities to nearly three dozen macroeconomic announcements. They find that the real long-term rate of interest ...
Review , Volume 88 , Issue Mar , Pages 133-144

Journal Article
Quality spreads in the bond market
Schmid, Frank A. (1999-07)
Monetary Trends , Issue Jul

Working Paper
Universal banking, allocation of control rights, and corporate finance in Germany
Schmid, Frank A.; Emmons, William R. (1998)
Corporate governance practices differ greatly in the United States and Germany. This paper describes the main institutional features of the German corporate governance system, focusing on universal banks and codetermination. The paper also summarizes existing empirical evidence that has investigated how- and how well- this system works.
Working Papers , Paper 1998-001

Journal Article
The Asian crisis and the exposure of large U.S. firms
Schmid, Frank A.; Emmons, William R. (2000-01)
A deep financial and economic crisis ravaged many Asian nations during 1997 and 1998. In this article, William Emmons and Frank Schmid examine the impact of the crisis on corporate risk for a subset of large U.S. firms that are included in the S&P 100 stock-market index. They find that the Asian crisis changed many of these firms' exposure to stock-market movements-that is, their "betas" or sensitivity to stock-market risk. In particular, the extent of a firm's sales exposure to Asia appears to be an important link through which the crisis affected beta. This effect is amplified by ...
Review , Volume 82 , Issue Jan , Pages 15-34

Journal Article
Credit unions and the common bond
Schmid, Frank A.; Emmons, William R. (1999-09)
A distinguishing feature of credit unions is the legal requirement that members share a common bond. This organizing principle recently became the focus of national attention when the Supreme Court and the U.S. Congress took opposite sides in a controversy regarding the number of common bonds (fields of membership) that could coexist within a single credit union. In this article, Emmons and Schmid develop and simulate a model of credit-union formation and consolidation to examine the effects of common-bond restrictions on the performance of credit unions. The performance measures are ...
Review , Volume 81 , Issue Sep , Pages 41-64

Journal Article
The stock market: beyond risk lies uncertainty
Schmid, Frank A. (2002-07)
In the cover story, stock market investors will find out why it's so important to distinguish between these two sides of randomness.
The Regional Economist , Issue Jul. , Pages 4-9

Conference Paper
Banks and corporate finance in Germany
Gorton, Gary; Schmid, Frank A. (1995)
Proceedings , Paper 469

Journal Article
Asset mispricing, arbitrage, and volatility
Schmid, Frank A.; Emmons, William R. (2002-11)
Market efficiency remains a contentious topic among financial economists. The theoretical case for efficient markets rests on the notion of risk-free, cost-free arbitrage. In real markets, however, arbitrage is not risk-free or cost-free. In addition, the number of informed arbitrageurs and the supply of financial resources they have to invest in arbitrage strategies is limited. This article builds on an important recent model of arbitrage by professional traders who need?but lack?wealth of their own to trade. Professional abitrageurs must convince wealthy but uninformed investors to entrust ...
Review , Volume 84 , Issue Nov