{"title":"Corporate Finance and the Governance Implications of Removing Government Support Programs","authors":"M. Jacob, S. Johan, D. Schweizer, F. Zhan","doi":"10.2139/ssrn.2377456","DOIUrl":"https://doi.org/10.2139/ssrn.2377456","url":null,"abstract":"Governments worldwide spend trillions of dollars on business support programs. This article examines the implications to investors of phasing out one of these subsidy programs. Our setting takes advantage of a unique quasi-natural experiment, where tax subsidies for Canadian Labour-Sponsored Venture Capital Corporations (LSVCCs) were phased out in one province but not in others. Using a difference-in-differences setting, we show that fund performance—unrelated to the tax credit—decreased substantially following the enactment of the phase-out. We further show empirically that LSVCC managers continued to charge venture capital-like management fees, despite the fact that their investment strategies become more similar to mutual funds. Our data strongly support the idea that investors in companies and/or funds that unexpectedly lose government support face significant financial costs.","PeriodicalId":199939,"journal":{"name":"CGN: Governmental & Public Bodies as Investors (Sub-Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127393039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Stakeholding through the Permanent Fund Dividend: Fitting Practice to Theory","authors":"Christopher L. Griffin","doi":"10.1057/9781137015020_11","DOIUrl":"https://doi.org/10.1057/9781137015020_11","url":null,"abstract":"","PeriodicalId":199939,"journal":{"name":"CGN: Governmental & Public Bodies as Investors (Sub-Topic)","volume":"116 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124622076","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Written Testimony for the House Financial Services Subcommittee on Oversight and Investigations' Hearing on 'TARP Oversight: An Update on Warrant Repurchases and Benefits to Taxpayers'","authors":"Linus Wilson","doi":"10.2139/SSRN.1603513","DOIUrl":"https://doi.org/10.2139/SSRN.1603513","url":null,"abstract":"The increased frequency of auctions versus negotiations has ensured that taxpayers are justly rewarded for their risky investments in the banking sector. Contrary to the banking lobby’s early propaganda, the Troubled Asset Relief Program (TARP) warrants have proven to be very valuable raising $6.1 billion so far. I expect the U.S. Treasury to raise a further $4.1 billion from 236 banks with warrants outstanding based on the prices at the end of the first quarter. The administration plans to give away $3.0 billion subsidy to about 580 existing TARP recipients. The U.S. Treasury wants them to participate in a so-called Small Business Lending Fund, which would cancel the taxpayers’ warrants and convert the 5 percent preferred stock into 1 percent preferred stock. The Small Business Lending Fund is TARP 2.0, but TARP 2.0 has none of the upside for taxpayers that TARP 1.0 had. We should be contracting state ownership of the banking sector not expanding it. Finally, the sale of the 27 percent stake of Citigroup common stock has moved too slowly, and the administration should consider a large underwritten sale of that stock to lock in profits and reduce taxpayers’ firm specific risk in the large bank.","PeriodicalId":199939,"journal":{"name":"CGN: Governmental & Public Bodies as Investors (Sub-Topic)","volume":"495 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116695446","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}