This essay analyzes the changing configuration of black-owned businesses in the South over nearly a century. It divides the region into two sections—the Lower South and the Upper South—and examines changes that occurred prior to 1840, during the late antebellum era, and as a result of the Civil War. It uses a “wealth model” to define various business groups, and then creates business occupational categories based on the listings in various sources, including the U.S. censuses for 1850, 1860, and 1870. The article compares and contrasts the wealth holdings among various groups of blacks in business, and it analyzes, within a comparative framework, slave entrepreneurship, rural vs. urban business activity, color—black or mulatto—as a variable in business ownership, and slave ownership among blacks engaged in business.

This article analyzes the creation of the Fundo Crescinco, a mutual fund that Nelson Rockefeller started in Brazil in the 1950s as part of a larger effort to continue, using private means, the Good Neighbor policy of Franklin D. Roosevelt. Fundo Crescinco reflected both the liberal assumptions of many academicians of that era about the importance of the middle class to economic development and the concerns of business people about placating Latin American nationalism. The fund's history provides insight into the complex and often contradictory nature of U.S.-Latin American relations following the Second World War, and it demonstrates the limits of entrepreneurship as an extension of diplomacy.

Reiterating and broadening a theme broached by its author over a decade ago, this article seeks to redirect the attention of business historians to the central role of the individual entrepreneur in American economic history. In both giant corporations and small start-up firms, in the late twentieth century and the early nineteenth, it argues, the presence—or absence—of intelligent, organized, and creative entrepreneurs has determined the success or failure of companies much more clearly than has the nature of their organizational charts.

We are grateful to Don Panton (1989) for pointing out a problem with the IMSL version 9 of the pseudo-random number simulator, GGSTA, written by Chambers, Mallows, and Stuck (1976), which we used in (1987).

As Panton (1989) points out, the correction:

(a) may or may not materially affect the simulation per se, and/or

(b) may or may not materially affect our inferences (drawn from the simulation methodology).

This paper points out errors in the stable variate generator used by Frankfurter and Lamoureux (1987) in a recent simulation study. The study was aimed at determining whether or not the assumption of the distributional form of stock returns is important in the construction of optimal portfolios.

A majority of corporate zero-coupon bonds includes a call provision, giving the firm the right to call the bond at par value. In this paper, we investigate whether or not it is optimal for the firm to call such a bond for refunding purposes, taking into consideration the effect of corporate taxes. We find that it is not optimal to refund the bond as long as the corporate tax rate is less than 50 percent. We find that a significantly higher proportion of callable zero-coupon bonds, compared to noncallables, has restrictive financing covenants, suggesting that the call feature is included to provide flexibility at a low cost for future recapitalizations as the firm's investment opportunities change.

In this paper, we examine the behavior of the bid-ask spreads of initial public offerings of common stocks (IPOs) in the over-the-counter market. We find that, in the initial aftermarket, the quoted percentage bid-ask spreads for IPOs are, on average, about threefourths as large as those for seasoned stocks. A cross-sectional and time-series simultaneous equations analysis indicates that significant differences in the IPO and seasoned spreads persist for eight weeks in the aftermarket. Further, we find that the lower IPO spreads stem from their differential elasticities with respect to the determinants of bid-ask spreads and volume as well as from significant differences in the levels of these determinants.

February and August peaks in the growth rates of the seasonally unadjusted Industrial Production Index follow the stock market peaks documented by Rozeff and Kinney (1976) by one month. Coefficients on one-month lead growth rates in industrial production for small firms are positive and significant in time-series regressions even in the presence of the market factor. Moreover, whereas returns on large firms' stocks unidirectionally Granger cause (i.e., predict) future growth rates in industrial production at least six months in advance, returns on small firms' stocks reflect one-month lead as well as past growth rates in industrial production. For these reasons, we argue that seasonal real growth provides a partial explanation for the January stock seasonal among small firms.

An individual is repeatedly offered the opportunity to invest in a risky asset whose return distribution is unknown. Because the return distribution is constant over time, however, he is able to learn about that distribution by observing investment outcomes. Results are presented regarding the asymptotically optimal investment behavior of a risk-averse individual under these circumstances when his aim is to maximize the expected utility of his end-of-horizon wealth. For the class of isoelastic utility functions with constant relative risk averson less than one, the optimal investment approaches a constant proportion of wealth. The limiting proportion is the same as the proportion put up by the most optimistic individual when the investment opportunity is offered only once. These results are then extended by generalizing the class of utility functions under consideration and, at the same time, restricting the class of possible investment schemes. This paper is distinguished from the previous literature by the assumption of conditional independence of returns across periods.

Two alternate hypotheses, the stable Paretian and mixture of normals, have been proposed to explain the observed thick-tailed distributions of futures price movements. The two hypotheses are tested by applying the stability-under-addition test of stable distribution parameters to twenty lengthy time series of changes in daily closing futures prices. Tests are conducted on both the original data series and randomized data. The results offer support for the mixture of normals hypothesis.

This study examines whether stock returns provide forecasts of changes in interest rates and inflation. In contrast to earlier work that indicated that changes in expected inflation negatively affect stock returns, we find a statistically significant positive relation between stock returns and future inflation rate changes as well as a significant positive relation between stock returns and future interest rate changes. Real estate investment trusts, which are particularly interest- and inflation-sensitive securities, provide better forecasts than a broad market index. Finally, we find that most of the evidence supporting the forecasting ability of stock returns occurs in the October 1979 to October 1982 period when the Federal Reserve Board chose not to counteract interest rate changes.

A large mean price change is observed on the last daily NYSE transaction. This suggests that closing prices may not consistently represent stock values. Transaction prices are studied to further characterize the day-end price rise and to determine whether it is due to any limited subsample of stocks or dates. The results indicate that the phenomenon is pervasive over most firms and days. Some evidence suggests that it is caused by a change in the frequency of ask prices at day-end.