Using a sample of 1,992 banks from 39 OECD countries during the 1999-2013 period, we examine whether the imposition of higher capital ratios is effective in reducing risk and improving the efficiency and profitability of banking institutions. We demonstrate that while risk-and non-risk based capital ratios improve bank efficiency and profitability, risk-based capital ratios fail to decrease bank risk. Our results cast doubts on the validity of the weighting methodologies used for calculating risk-based capital ratios and on the efficacy of regulatory monitoring. The ineffectiveness of riskbased capital ratios with regard to bank risk is likely to be exacerbated by the adoption of the new Basel III capital guidelines. While Basel III requires banks to hold higher liquidity ratios along with higher capital ratios, our findings suggest that imposing higher capital ratios may have a negative effect on the efficiency and profitability of highly liquid banks. Our results hold across different subsamples, alternative risk, efficiency, and profitability measures and a battery of estimation techniques.

We investigate whether and how political systems affect the financial soundness of conventional and Islamic banks. Using factors extracted from principal component analysis, we find that Islamic banks underperform their conventional counterparts in more democratic political systems but outperform them in hybrid and Sharia'a-based legal systems. The findings reflect the challenges Islamic banks face in Western countries in terms of perception, financial infrastructure, and regulatory constraints while mirroring the recognition of their specificities and their cultural and religious compliance with Sharia'a law in Muslim countries. The findings are robust to a battery of alternative estimation techniques and methods of correcting standard errors.

We perform content analysis on a unique sample of 2,074 first-instance published takeover rumors to study how the rationale underlying a publication relates to its credibility and its association with firm returns and rumor accuracy. While most takeover rumors are inaccurate, we find that distinguishing between various justifications of potential takeover activity as provided within the published article serves to predict takeover announcements, subsequent firm abnormal returns, andto a lesser extentpremiums. In addition, we note a clear distinction in results based upon the informative versus speculative nature of the rumor. We interpret this evidence as supportive of our hypothesis that the underlying rationale justifying the release of public information affects firm share prices and aids in predictability. JEL Classification codes: G14; G34; G30 * The authors would like to thank the Fonds Quebecois de la Recherche sur la Societe et la Culture (2015-NP-182891), the Social Sciences and Humanities Research Council (430-2013-0502), as well as Concordia University (seed funding program) for the funding of this research.

Purpose – The purpose of this paper is to examine whether and how family ownership enhances or damages firm value. Design/methodology/approach – The paper studies a sample of Canadian companies listed on the Toronto Stock Exchange (TSX) between 1999 and 2007 and apply multivariate regression with firm value as a dependent variable. The paper measures firm value as Tobin ' s Q and ROA based either on net income or EBITDA. The independent variables include family firm dummy and ownership percentage. Findings – It is found that control-enhancing mechanisms which are often employed by family companies add value to companies. Furthermore, it is found that agency conflicts between ownership and management are less costly than those between majority and minority shareholders, suggesting that family ownership helps resolve the agency conflicts between ownership and management and in turn enhances firm value. Finally, it is found that family companies with founders as CEOs outperform those with descendants as CEOs. Research limitations/implications – The paper studies Canadian family firms; as such, the sample size is not relatively large. Nonetheless, the results should be generalized as Canada is one of the largest markets in the world and have high integration with the rest of the world. Practical implications – The results suggest investors should invest in family ownership firms. Originality/value – The paper shows whether firm ownership increases firm value and the determinant of family firm value.

AbstMctThis paper examines the stock and accounting performance of three major airlines in the United States in the aftermath of the September 11, 2001, termrist attacks. September I I (9/1 I ) resulted in dramatic changes in the airline industry and had significant implications for the economic gains and future pmspects of most airlines. Our study focuses on the stock market's perception of the viability of low-cost versus full-service business models in the afermath of 9/11. We choose Southwest Airlines as a typical low-cost airline and compare its accounting and stock performance to two full-service airlines, Continental and Northwest. We find that Southwest's performance was highly superior to that of Continental and Northwest and argue that Southwest's business model, in the eyes of investors, provides the firm with significantly more financial and operational flexibility than full-service airlines. Southwest's lower operating costs, consumer trust, p d u c t offering, corporate structure, workforce and work practices, as well as operational pmedures are all factors that appear to contribute to Southwest's relative success. RCsudCet article dtudie la performance boursi2re et comptable & tmis gramis transporteurs driens oMmnt aux hats-Unis au l e h m a i n &s attentats du I I septembre 2001. Ces dvdnements ont entmfd &s changements m d i c u (2002,2003) discuss the strategies that both types of air-~~ We are grateful to two anonymous refand to colleagues at Coocordia University for useful comments. In addition, we wish to thank Dolrucdce 'Ihiengtham and Michael Yi Lin for providing superb rtscarch assistance. Address mrn?spondence to Triant Flouris. Director. International Aviation MBA Program, John Molson School of Business, Coocordia University. Montreal, QC. Canada H3G 1M8. Email: ttlouris@jmsb.concordia.ca OMAC 2005 3lines have pursued in reaction to the September 11,2001 (9/11) attacks and outline how those airlines have fared after 9/11. Although Lawton provides a brief review of the airlines' stock performance, his discussion is mostly qualitative in nature. Carter and Simkins (2004) provide a quantitative analysis of the stock performance of a sample of U.S. airlines after the events of 9/11, but do not focus on performance differences between lowcost and full-service airlines.formance or systematic and unsystematic volatility of the respective airlines. Our study fills this gap by providing a comprehensive quantitative analysis of a small sample of lowcost and full-service carriers around 9/11.