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Author:Adams, William James 

Conference Paper
Should merger policy be changed? An antitrust perspective
AUTHORS: Adams, William James
DATE: 1987

Journal Article
The Ohio economy: a time series analysis
A time series methodology is used to understand the Ohio economy by assessing various indicators of economic activity in Ohio. These can be identified and quantified through simple methods applicable to other regional economies, as well.
AUTHORS: Hoehn, James G.; Adams, William James
DATE: 1985

Discussion Paper
Does government intervention in the small-firm credit market help economic performance?
The guaranteed lending programs of the Small Business Administration (SBA) are large and growing rapidly. The SBAs fiscal year 2008 performance budget calls for $25 billion in guaranteed loans for small businessesa new record for the agency. Some critics of SBA programs suggest they do not help small businesses or overall economic performance. Other critics suggest that these programs unfairly benefit the financial institutions that participate in SBAs guaranteed lending programs. While very little serious empirical evidence exists on whether the net economic impact of the SBAs guaranteed lending programs is positive or negative, a few recent studies provide some insight into the question. In general, they suggest a small positive impact of the SBAs programs on economic performance. However, the results are very tentative and further research is needed to declare a more definitive position. We provide a general overview of the SBAs guaranteed lending programs and summarize the results of these studies.
AUTHORS: Thomson, James B.; Adams, William James; Craig, Ben R.
DATE: 2007

Journal Article
Business failures in New England
During the 1980s, the New England economy prospered relative to the nation as a whole, with lower unemployment rates, more rapidly rising real estate prices, and lower rates of business failures. As the economic tide turned against New England at the end of the decade, the rate of business failures soared, in absolute terms as well as relative to nationwide statistics. This recent wave of business failures appears to have been far in excess of that attributable to the decline in New England economic activity. Moreoever, it has undesirable implications for the regional economy and can be expected to slow economic recovery in the area. The authors explore several explanations for the increase in business failures, including employment losses, industry mix effects, and credit availability. Their findings suggest that difficulties in the banking sector have contributed significantly to the very high rate of business failures in New England.
AUTHORS: Adams, William James; Rosengren, Eric S.; Peek, Joe
DATE: 1993

Journal Article
Antitrust policy and vertical mergers
Recently, federal regulators responsible for enforcing the antitrust laws have shown a renewed interest in the potential anticompetitive effects of vertical mergers--mergers between two independent firms in successive stages of production. This greater activism in vertical merger cases is in striking contrast to the permissive policies that prevailed throughout the 1980s, which, in turn, were a response to the Justice Department's and the Federal Trade Commission's open hostility to vertical mergers during the 1960s and 1970s.> The cyclical antitrust treatment of vertical mergers over the past three and one-half decades has been strongly influenced by the theoretical research of academic economists and lawyers. This article examines the empirical evidence of anticompetitive foreclosure in vertical mergers challenged by the Justice Department and the Federal Trade Commission during the period from 1963 to 1982. The authors find no evidence of anticompetitive market foreclosure for the sample of vertical merger cases challenged by the antitrust agencies during this period. They suggest that a more permissive policy towards vertical mergers be maintained until the theory can spell out more clearly the circumstances when vertical mergers result in anticompetitive foreclosure.
AUTHORS: Adams, William James; Rosengren, Eric S.
DATE: 1995

Working Paper
A Trojan horse or the golden fleece? small business investment companies and government guarantees
Profitability is a central concern when governments provide guarantees to increase the flow of funds to disadvantaged groups. We examine the profitability of small business investment companies (SBICs) that are chartered and regulated by the U.S. Small Business Administration (SBA) to finance the activities of small firms. We document, over the 1986-91 period, dismal performance by SBICs. Because SBICs have access to government-guaranteed funds, financial distress among SBICs can expose the SBA, and hence taxpayers, to losses. Using two alternative sample selection models, we examine the relationship between SBICs use of SBA funds and returns on equity (ROE) and survival probabilities. The first sample selection model is based on a model of failure/survival. The second selection model is based on our observation that many SBICs do not take advantage of SBA leverage: nearly one-third of SBICs use no leverage at all, and that figure rises to three-fifths for bank-owned SBICs. The results from our sample selection models indicate that SBA leverage--the amount of funds borrowed from the SBA as a percent of private capital--reduces ROE and the probability of survival. In addition, we find that the probability of using SBA leverage decreases for bank-owned SBICs relative to other SBICs and for highly profitable and efficient SBICs, while it increases for SBICs using debt to finance the activities of small firms. Thus, our results suggest that an SBICs performance is negatively correlated with SBA leverage.
AUTHORS: Brewer, Elijah; Genay, Hesna; Adams, William James; Worthington, Paula R.
DATE: 1997

Working Paper
Requiem for a market marker: the case of Drexel Burham Lambert and below-investment-grade bonds
AUTHORS: Brewer, Elijah; Adams, William James
DATE: 1997

Working Paper
Alligators in the swamp: the impact of derivatives on the financial performance of depository institutions
It has been argued that underpriced federal deposit insurance provides incentive for insured institutions to increase the value of shareholder equity by expanding into activities that shift risk onto the deposit insurer. Derivative instruments have been used by firms to change their risk exposure. Permitting firms with substantial moral hazard incentives to utilize interest-rate derivative instruments could lead to higher rather than lower exposure to risk. This article, using a sample of savings and loan associations (S&Ls), examines the proposition that involvement with interest-rate derivatives instruments increases depository institutions' risk. We find that there is a negative correlation between risk and derivatives usage. In addition, S&Ls that used derivatives experienced relatively greater growth in their fixed-rate mortgage portfolios.
AUTHORS: Brewer, Elijah; Adams, William James; Moser, James T.
DATE: 1996

Working Paper
The security issue decision: evidence from small business investment companies
Using a unique transactions-level dataset, this paper examines the investment choices of small business investment companies (SBICs), which are private venture capital firms licensed and regulated by the U.S. Small Business Administration (SBA). SBICs make debt and equity investments in small businesses, and we seek to explain their security choices. We focus on factors suggested by asymmetric information and contracting theories of security choice. Overall, our results are consistent with the predictions of contracting theory, although certain aspects of our results also support asymmetric information models. We find that projects generating tangible assets are more likely to be financed with debt than nondebt securities, consistent with contracting cost theories. We also find that repeat financings are more likely to be debt than are initial transactions between a particular small business-SBIC pair, which we interpret as evidence consistent with asymmetric information models. In addition, we find that increased firm risk generally decreases the probability of using debt, as do high levels of growth opportunities. Finally, we show that the characteristics of the SBIC providing the funding are important correlates of security choice. SBICs using higher amounts of funds or guarantees from the SBA are less likely to provide debt financing than other SBICs, while SBICs that are organized as partnerships or affiliated with banking organizations are less likely to provide debt financing than other SBICs.
AUTHORS: Brewer, Elijah; Genay, Hesna; Adams, William James; Worthington, Paula R.
DATE: 1996

Conference Paper
Does Small Business Administration guaranteed lending improve economic performance in lowincome areas?
AUTHORS: Adams, William James; Craig, Ben R.; Thompson, James B.
DATE: 2006

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