#2004-018A "Monetary Policy Actions and the Incentive to Invest"
by William R. Emmons, and Frank A. Schmid
August 2004

The ability of monetary policy actions to affect the private sector's incentive to invest in fixed capital is hotly debated. Whereas a downward shift in the yield curve increases the present value of expected cash flows and should spur investment, lower short term interest rates make delay more desirable. More...

PUBLISHED: Business Economics, April 2004, 39(2), pp. 24-29

#2004-004A "When For-Profits and Not-For-Profits Compete: Theory and Empirical Evidence from Retail Banking"
by William R. Emmons, and Frank A. Schmid
February 2004

We model competition in local deposit markets between for-profit and not-for-profit financial institutions. For-profit retail banks may offer a superior bundle of financial services, but not-for-profit (occupational) credit unions enjoy sponsor subsidies that allow them to capture a share of the local market. More...

#2002-026A "Cracks in the Facade: American Economic and Financial Structures After the Boom"
by William R. Emmons, and Frank A. Schmid
November 2002

The United States experienced a historic boom during the late 1990s and briefly into the new millennium, highlighted by rapid economic and productivity growth, surging corporate profitability, sustained business investment in many areas, including high technology and telecommunications, and a soaring stock market. More...

PUBLISHED: Structural Foundations of International Finance, Pier Carlo Padoan, Paul Brenton, and Gavin Boyd, Editors, (Cheltenham, UK: Edward Elgar, 2003)

#2001-024A "The Importance of Scale Economies and Geographic Diversification in Community Bank Mergers"
by William R. Emmons, R. Alton Gilbert, and Timothy J. Yeager
November 2001

Mergers of community banks across economic market areas potentially reduce both idiosyncratic and local market risk. A merger may reduce idiosyncratic risk because the larger post-merger bank has a larger customer base. Negative credit and liquidity shocks from individual customers would have smaller effects on the portfolio of the merged entity than on the individual community banks involved in the merger. More...

PUBLISHED: Journal of Financial Services Research, April 2004, 25(2-3), pp. 259-81

#2001-023A "Corporate Governance, Entrenched Labor, and Economic Growth"
by William R. Emmons, and Frank A. Schmid
November 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. More...

#2000-008A "Pricing and Dividend Policies in Open Credit Cooperatives"
by William R. Emmons, and Frank A. Schmid
March 2000

This paper develops an integrated model of pricing and dividend policies in open credit cooperatives (those that do business with members and non-members on a non-discriminatory basis). We show that both the distribution of member preferences and the amount of non-member business the cooperative does influence its optimal pricing and dividend policies. More...

PUBLISHED: Journal of Theoretical and Institutional Economics, June 2002, 158(2), pp. 234-55

#2000-006A "Banks VS. Credit Unions: Dynamic Competition in Local Markets"
by William R. Emmons, and Frank A. Schmid
February 2000

One interesting aspect of the financial services industry is that for-profit institutions such as commercial banks compete directly with not-for-profit financial intermediaries such as credit unions. In this article, we analyze competition among banks and between banks and credit unions using a dynamic model of spatial competition. More...

#1999-018A "Corporate Governance And Corporate Performance"
by William R. Emmons, and Frank A. Schmid


National corporate-governance traditions are distinctive, deeply rooted, and difficult to change. Recent research points to a country's legal traditions and its stage of economic development as important determinants of corporate-governance institutions. More...

FORTHCOMING: Corporate Governance and Globalization, edited by Gavin Boyd and Stephen Cohen, Edward Elgar, 2000

#1998-001A "Universal Banking,Allocation of Control Rights, and Corporate Finance in Germany"
by William R. Emmons, and Frank A. Schmid
February 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. More...

PUBLISHED: Federal Reserve Bank of St. Louis Review, July/August 1998, 80(4), pp. 19-42

#1997-009A "Conflict of Interest between Borrowers and Lenders in Credit Cooperatives: The Case of German Co-operative Banks"
by William R. Emmons, and Willi Mueller
March 1997

Over the last few decades, the co-operative banking sector in Germany has steadily increased its market share at the expense of other types of banks. This outcome is surprising from the standpoint of traditional economic thinking about co-operatives, which suggests that they are most appropriate for "backward" economies. More...