Mark Klock - Profile on Academia.edu (original) (raw)
Papers by Mark Klock
The Impact on Intangible Capital on Tobin's q in the Semiconductor Industry
The American Economic Review, 1993
A Raisin in Reserve: Horne , Takings, and the Problem of Government Price Supports
Michigan state law review, 2016
In Horne v. Department of Agriculture, the Supreme Court recently held that the government could ... more In Horne v. Department of Agriculture, the Supreme Court recently held that the government could not assess a fine on a raisin grower for refusing to surrender a portion of his crop in compliance with a government program to artificially inflate the price of raisins, benefitting raisin producers. The Court was split, with Justice Sotomayor strongly opposed to the entire decision and Justices Ginsburg, Breyer, and Kagan dissenting in part. Interestingly, only a very brief concurring opinion written by Justice Thomas touched on the strongest foundation for the majority’s result—in order for a justly compensated taking to be constitutional, it must be for a public use, and clearly a program designed to benefit the narrow class of raisin growers at higher costs and lower raisin availability for the public is not a public use. This Article analogizes the price support program to a government-created cartel that increases prices to confer a private benefit on producers. Such programs are ...
Two Possible Answers to the Enron Experience: Will It Be Regulation of Fortune Tellers or Rebirth of Secondary Liability?
The Journal of Corporation Law, 2002
I. INTRODUCTION Even before the multi-billion dollar collapse of Enron1 and public allegations of... more I. INTRODUCTION Even before the multi-billion dollar collapse of Enron1 and public allegations of auditor misconduct against Arthur Andersen,2 there was a history of demands for IMAGE FORMULA7 reforming the audit process.3 A wide variety of factors contributed to the public calls for reform. First among these was the emergence and explosive growth of the financial derivatives industry,4 which was widely misunderstood and posed new challenges for accounting.5 Also contributing to the cry for increased oversight were large-scale and highly publicized collapsed Ponzi schemes run by rogue traders.6 Legal decisions fueled the flames. In Central Bank of Denver v. First Interstate Bank of Denver,7 the Supreme Court shocked the securities bar and overturned twenty years of appellate court precedent with its holding that secondary liability under section IOb of the Securities Exchange Act IMAGE FORMULA9 is an invalid theory for liability in private actions.8 In other cases, the Court also sy...
We investigate whether measures of intangible capital based on advertising and R&D can explain va... more We investigate whether measures of intangible capital based on advertising and R&D can explain variation in Tobin’s Q ratio for the pharmaceutical & chemical industry using data from 1982 to 2001. The study is motivated by prior literature studying this relation in other industries, recent literature investigating intangible capital in this industry, and the larger controversy about whether stock valuations have been high due to irrational investors or large investment in intangible capital. We find that our measures of intangible capital are statistically significant determinants of Tobin’s Q and explain twenty percent of the variation in our sample.
The Virtue of Home Ownership and the Vice of Poorly Secured Lending: The Great Financial Crisis of 2008 as an Unintended Consequence of Warm-Hearted and Bone-Headed Ideas
This article utilizes a simple economic model of asymmetric information to model a pooling equili... more This article utilizes a simple economic model of asymmetric information to model a pooling equilibrium in the housing market. There are two types of households in the model — disciplined and undisciplined. Disciplined households are able to distinguish themselves by saving a significant portion of their income for a down payment on a home leading to a stable equilibrium. A change in government policy which requires a rate of home ownership greater than the proportion of disciplined households causes the equilibrium to collapse. I argue that change in U.S. housing policy driven by federal legislation had exactly this effect on the housing market and was the actual cause of the 2008 financial crisis.
Corporate Ownership and Control
Bhagat and Romano (2002a, 2002b) document the importance of event study analysis of equity return... more Bhagat and Romano (2002a, 2002b) document the importance of event study analysis of equity returns in corporate governance. We extend their analysis with the argument that analysis of bond returns around important corporate events can provide additional important information. Such information is particularly important in the current active public discussions over corporate governance. We provide an example of event study analysis of bond returns examining the impact of large dividend changes on both stockholders and bondholders in an effort to differentiate between the information content (transparency) and possible wealth transfers (theft) around dividends. Our study replicates earlier studies on investment grade bonds with ambiguous results using a sample of noninvestment grade bonds. Our results suggest that for ordinary dividend changes, wealth expropriation is a significant explanation in the gain to stockholders.
The Stock Market Reaction to a Change in Certifying Accountant
Journal of Accounting, Auditing & Finance
The impact of intangible capital on Tobin's q in the semiconductor industry
American Economic Review, 1993
... Following Megna and Dennis Mueller (1991) we use a binomial specification to construct intang... more ... Following Megna and Dennis Mueller (1991) we use a binomial specification to construct intangible capital stocks: m (5) SPit= E jPit-i j=0 where P is the number of patents granted to a firm in a particular year, or the firm's research and development expenditure; m is the number ...
The Impact on Intangible Capital on Tobin's q in the Semiconductor Industry
American Economic Review, 1993
We investigate whether measures of intangible capital based on advertising and R&D can explain va... more We investigate whether measures of intangible capital based on advertising and R&D can explain variation in Tobin's Q ratio for the pharmaceutical & chemical industry using data from 1982 to 2001. The study is motivated by prior literature studying this relation in other industries, recent literature investigating intangible capital in this industry, and the larger controversy about whether stock valuations have been high due to irrational investors or large investment in intangible capital. We find that our measures of intangible capital are statistically significant determinants of Tobin's Q and explain twenty percent of the variation in our sample.
SSRN Electronic Journal, 2000
Financial markets do not function well when fraud is pervasive. It has been well documented that ... more Financial markets do not function well when fraud is pervasive. It has been well documented that financial fraud has increased following changes in securities law that occurred in the 1990's. Also around September of 2009, the investigations into the SEC examinations of Bernard Madoff Investment Securities, LLC were completed and released to the public. The simple facts reveal an alarming level of incompetence and lack of financial literacy on the part of the guardians of the integrity of our financial markets. I suggest two important tools for addressing these problems. One is to supplement enforcement of anti-fraud rules with more private attorney generals by expressly creating a private right of action for aiding and abetting violations of securities laws. This will foster a stronger culture of integrity and ethical conduct in the auditing profession. An additional tool is to increase financial literacy in our law schools which supply the regulators of our markets.
University of Pittsburgh Law Review, 2015
The Affordable Care Act seeks to remedy the problem of information asymmetry in the health insura... more The Affordable Care Act seeks to remedy the problem of information asymmetry in the health insurance market by mandating that everyone obtain health insurance or pay a penalty, and by requiring the States to expand Medicaid or lose existing federal funds. In NFIB v. Sebelius, Chief Justice Roberts held that Congress’ power to regulate under the Commerce Clause could not justify the Individual Mandate to purchase insurance, but that the penalty could be construed as a tax and upheld under the taxing power. Chief Justice Roberts also held the Medicaid Expansion to be an unconstitutional use of spending power, but determined that the Medicaid Expansion could remain with the States having the option to keep existing funding and not expand or expand and take the incremental funding. Eight Justices disagreed with the Chief Justice on the Individual Mandate, and six Justices disagreed with the Chief Justice on the Medicaid Expansion. This creates a paradox in that a supermajority of the Co...
SSRN Electronic Journal, 2000
There has been only one longer period of stability in the Court's history, and that was in the ea... more There has been only one longer period of stability in the Court's history, and that was in the early nineteenth century when far fewer cases were decided. Because the composition of the Court held constant for so long, the SRCE presents a unique opportunity to conduct a statistical analysis of the Justices' votes. I present a statistical empirical analysis of voting for this period, both for the potentially interesting results and as an example of how to conduct and present an empirical study which is objective and replicable. Some of the findings include the following: only a few pairs of Justices have statistically significant differences in voting records; the magnitude of the departure from independent voting is enormous in statistical terms; Justice Thomas is the most predictable Justice; and Justice Scalia is the least-changed Justice. Of particular interest is a finding that is contrary to conventional wisdom. Conventional wisdom suggests that the median Justice closest to the center, presumably Justice Kennedy, is the most influential Justice. However, I have developed a measure of influence which employs the statistically significant effects the Justices have on each other, and this suggests that the most influential Justices on the Court during the SRCE were Rehnquist, Souter, and Breyer.
SSRN Electronic Journal, 2000
The Virtue of Home Ownership and the Vice of Poorly Secured Lending: The Great Financial Crisis of 2008 as an Unintended Consequence of Warm-Hearted and Bone-Headed Ideas
This article utilizes a simple economic model of asymmetric information to model a pooling equili... more This article utilizes a simple economic model of asymmetric information to model a pooling equilibrium in the housing market. There are two types of households in the model — disciplined and undisciplined. Disciplined households are able to distinguish themselves by saving a significant portion of their income for a down payment on a home leading to a stable equilibrium. A change in government policy which requires a rate of home ownership greater than the proportion of disciplined households causes the equilibrium to collapse. I argue that change in U.S. housing policy driven by federal legislation had exactly this effect on the housing market and was the actual cause of the 2008 financial crisis.
The Stock Market Reaction to Securities Class Action Filings Post PSLRA
The Stock Market Reaction to Class Action Filings Post PSLRA
Dividend and debt decisions of firms
The Impact on Intangible Capital on Tobin's q in the Semiconductor Industry
The American Economic Review, 1993
A Raisin in Reserve: Horne , Takings, and the Problem of Government Price Supports
Michigan state law review, 2016
In Horne v. Department of Agriculture, the Supreme Court recently held that the government could ... more In Horne v. Department of Agriculture, the Supreme Court recently held that the government could not assess a fine on a raisin grower for refusing to surrender a portion of his crop in compliance with a government program to artificially inflate the price of raisins, benefitting raisin producers. The Court was split, with Justice Sotomayor strongly opposed to the entire decision and Justices Ginsburg, Breyer, and Kagan dissenting in part. Interestingly, only a very brief concurring opinion written by Justice Thomas touched on the strongest foundation for the majority’s result—in order for a justly compensated taking to be constitutional, it must be for a public use, and clearly a program designed to benefit the narrow class of raisin growers at higher costs and lower raisin availability for the public is not a public use. This Article analogizes the price support program to a government-created cartel that increases prices to confer a private benefit on producers. Such programs are ...
Two Possible Answers to the Enron Experience: Will It Be Regulation of Fortune Tellers or Rebirth of Secondary Liability?
The Journal of Corporation Law, 2002
I. INTRODUCTION Even before the multi-billion dollar collapse of Enron1 and public allegations of... more I. INTRODUCTION Even before the multi-billion dollar collapse of Enron1 and public allegations of auditor misconduct against Arthur Andersen,2 there was a history of demands for IMAGE FORMULA7 reforming the audit process.3 A wide variety of factors contributed to the public calls for reform. First among these was the emergence and explosive growth of the financial derivatives industry,4 which was widely misunderstood and posed new challenges for accounting.5 Also contributing to the cry for increased oversight were large-scale and highly publicized collapsed Ponzi schemes run by rogue traders.6 Legal decisions fueled the flames. In Central Bank of Denver v. First Interstate Bank of Denver,7 the Supreme Court shocked the securities bar and overturned twenty years of appellate court precedent with its holding that secondary liability under section IOb of the Securities Exchange Act IMAGE FORMULA9 is an invalid theory for liability in private actions.8 In other cases, the Court also sy...
We investigate whether measures of intangible capital based on advertising and R&D can explain va... more We investigate whether measures of intangible capital based on advertising and R&D can explain variation in Tobin’s Q ratio for the pharmaceutical & chemical industry using data from 1982 to 2001. The study is motivated by prior literature studying this relation in other industries, recent literature investigating intangible capital in this industry, and the larger controversy about whether stock valuations have been high due to irrational investors or large investment in intangible capital. We find that our measures of intangible capital are statistically significant determinants of Tobin’s Q and explain twenty percent of the variation in our sample.
The Virtue of Home Ownership and the Vice of Poorly Secured Lending: The Great Financial Crisis of 2008 as an Unintended Consequence of Warm-Hearted and Bone-Headed Ideas
This article utilizes a simple economic model of asymmetric information to model a pooling equili... more This article utilizes a simple economic model of asymmetric information to model a pooling equilibrium in the housing market. There are two types of households in the model — disciplined and undisciplined. Disciplined households are able to distinguish themselves by saving a significant portion of their income for a down payment on a home leading to a stable equilibrium. A change in government policy which requires a rate of home ownership greater than the proportion of disciplined households causes the equilibrium to collapse. I argue that change in U.S. housing policy driven by federal legislation had exactly this effect on the housing market and was the actual cause of the 2008 financial crisis.
Corporate Ownership and Control
Bhagat and Romano (2002a, 2002b) document the importance of event study analysis of equity return... more Bhagat and Romano (2002a, 2002b) document the importance of event study analysis of equity returns in corporate governance. We extend their analysis with the argument that analysis of bond returns around important corporate events can provide additional important information. Such information is particularly important in the current active public discussions over corporate governance. We provide an example of event study analysis of bond returns examining the impact of large dividend changes on both stockholders and bondholders in an effort to differentiate between the information content (transparency) and possible wealth transfers (theft) around dividends. Our study replicates earlier studies on investment grade bonds with ambiguous results using a sample of noninvestment grade bonds. Our results suggest that for ordinary dividend changes, wealth expropriation is a significant explanation in the gain to stockholders.
The Stock Market Reaction to a Change in Certifying Accountant
Journal of Accounting, Auditing & Finance
The impact of intangible capital on Tobin's q in the semiconductor industry
American Economic Review, 1993
... Following Megna and Dennis Mueller (1991) we use a binomial specification to construct intang... more ... Following Megna and Dennis Mueller (1991) we use a binomial specification to construct intangible capital stocks: m (5) SPit= E jPit-i j=0 where P is the number of patents granted to a firm in a particular year, or the firm's research and development expenditure; m is the number ...
The Impact on Intangible Capital on Tobin's q in the Semiconductor Industry
American Economic Review, 1993
We investigate whether measures of intangible capital based on advertising and R&D can explain va... more We investigate whether measures of intangible capital based on advertising and R&D can explain variation in Tobin's Q ratio for the pharmaceutical & chemical industry using data from 1982 to 2001. The study is motivated by prior literature studying this relation in other industries, recent literature investigating intangible capital in this industry, and the larger controversy about whether stock valuations have been high due to irrational investors or large investment in intangible capital. We find that our measures of intangible capital are statistically significant determinants of Tobin's Q and explain twenty percent of the variation in our sample.
SSRN Electronic Journal, 2000
Financial markets do not function well when fraud is pervasive. It has been well documented that ... more Financial markets do not function well when fraud is pervasive. It has been well documented that financial fraud has increased following changes in securities law that occurred in the 1990's. Also around September of 2009, the investigations into the SEC examinations of Bernard Madoff Investment Securities, LLC were completed and released to the public. The simple facts reveal an alarming level of incompetence and lack of financial literacy on the part of the guardians of the integrity of our financial markets. I suggest two important tools for addressing these problems. One is to supplement enforcement of anti-fraud rules with more private attorney generals by expressly creating a private right of action for aiding and abetting violations of securities laws. This will foster a stronger culture of integrity and ethical conduct in the auditing profession. An additional tool is to increase financial literacy in our law schools which supply the regulators of our markets.
University of Pittsburgh Law Review, 2015
The Affordable Care Act seeks to remedy the problem of information asymmetry in the health insura... more The Affordable Care Act seeks to remedy the problem of information asymmetry in the health insurance market by mandating that everyone obtain health insurance or pay a penalty, and by requiring the States to expand Medicaid or lose existing federal funds. In NFIB v. Sebelius, Chief Justice Roberts held that Congress’ power to regulate under the Commerce Clause could not justify the Individual Mandate to purchase insurance, but that the penalty could be construed as a tax and upheld under the taxing power. Chief Justice Roberts also held the Medicaid Expansion to be an unconstitutional use of spending power, but determined that the Medicaid Expansion could remain with the States having the option to keep existing funding and not expand or expand and take the incremental funding. Eight Justices disagreed with the Chief Justice on the Individual Mandate, and six Justices disagreed with the Chief Justice on the Medicaid Expansion. This creates a paradox in that a supermajority of the Co...
SSRN Electronic Journal, 2000
There has been only one longer period of stability in the Court's history, and that was in the ea... more There has been only one longer period of stability in the Court's history, and that was in the early nineteenth century when far fewer cases were decided. Because the composition of the Court held constant for so long, the SRCE presents a unique opportunity to conduct a statistical analysis of the Justices' votes. I present a statistical empirical analysis of voting for this period, both for the potentially interesting results and as an example of how to conduct and present an empirical study which is objective and replicable. Some of the findings include the following: only a few pairs of Justices have statistically significant differences in voting records; the magnitude of the departure from independent voting is enormous in statistical terms; Justice Thomas is the most predictable Justice; and Justice Scalia is the least-changed Justice. Of particular interest is a finding that is contrary to conventional wisdom. Conventional wisdom suggests that the median Justice closest to the center, presumably Justice Kennedy, is the most influential Justice. However, I have developed a measure of influence which employs the statistically significant effects the Justices have on each other, and this suggests that the most influential Justices on the Court during the SRCE were Rehnquist, Souter, and Breyer.
SSRN Electronic Journal, 2000
The Virtue of Home Ownership and the Vice of Poorly Secured Lending: The Great Financial Crisis of 2008 as an Unintended Consequence of Warm-Hearted and Bone-Headed Ideas
This article utilizes a simple economic model of asymmetric information to model a pooling equili... more This article utilizes a simple economic model of asymmetric information to model a pooling equilibrium in the housing market. There are two types of households in the model — disciplined and undisciplined. Disciplined households are able to distinguish themselves by saving a significant portion of their income for a down payment on a home leading to a stable equilibrium. A change in government policy which requires a rate of home ownership greater than the proportion of disciplined households causes the equilibrium to collapse. I argue that change in U.S. housing policy driven by federal legislation had exactly this effect on the housing market and was the actual cause of the 2008 financial crisis.
The Stock Market Reaction to Securities Class Action Filings Post PSLRA
The Stock Market Reaction to Class Action Filings Post PSLRA
Dividend and debt decisions of firms