sequential formation of coalitions in games with externalities and fixed payoff division this paper analyzes a sequential game of coalition formation when the division of the coalitional surplus is fixed and the payoffs are defined relative to the whole coalition structure gains from cooperation are represented by a valuation which maps coalition structures into payoff vectors i show that any core stable coalition structure can be attained as a stationary perfect equilibrium of the game if stationary perfect equilibria may fail to exist in general games a simple condition is provided under which they exist in symmetric games furthermore symmetric stationary perfect equilibria of symmetric games generate a coalition structure which is generically unique up to a permutation of the players a general method for the characterization of equilibria in symmetric games is proposed and applied to the formation of cartels in oligopolies and coalitions in symmetric majority games journal of economic literatureclassification numbers c78 c71 1996 academic press inc

small firms and the merger mania empirical research has found an average or even superior performance of small firms this seems to be at variance with the secular concentration process and the recurrent merger waves this paper tries to integrate size and merger research higher profitability of small firms is explained by their incentive structure and shorter decision lags but also by lower wages and higher individual risk premia their faster growth in the eighties was in addition fostered by diversification of demand miniaturization of technology and a need for flexibility under uncertainty the merger wave on the other hand does not necessarily prove that large firms are superior managers and shareholders may be seduced by stockmarket optimism a sizeable industry of banks agents and lawyers have their own interests in mergers mergers may be important in declining markets and for the acquisition of technology on average mergers do not improve efficiency profits or internal growth small and large firms serve different purposes performance depends on the market incentives and technology the establishment growth and closure of small firms as well as mergers are attempts to find the optimal organization for utility maximization in a world of severe uncertainty and diverse needs

an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

clearly heard on the street the effect of takeover rumors on stock prices this article examines the effects of takeover rumors on stock prices using a sample of rumors published in the wall street journal s heard on the street column we find that the market reacts efficiently to rumors simple trading strategies based on buying or selling rumored targets stocks yield zero excess returns we document a significant price run up for rumored targets in the month before publication of the takeover rumor we find that widespread takeover rumors accurately predict imminent takeover bids less than half the time finally we find that most takeover rumors are preceded by unusual price and volume activity in the stock of the rumored target which may stimulate speculation that a large block position is being accumulated copyright 1990 by the university of chicago

on success and dissolution of the labor managed firm in the capitalist economy labor managed firms lmfs in the developed capitalist economy exhibit an interesting life cycle pattern often they come into existence as a way of reorganizing insolvent entrepreneurial profit maximizing firms yet successful lmfs tend to be assimilated to the entrepreneurial modus operandi in the long run i propose a simple theoretical model that explains this lmf phenomenon as the outcome of the lmf s interaction with outside markets especially competitive spot labor markets the interpretations and limitations of the model are also discussed as the basic framework is extended to deal with imperfections in capital markets and with contractual labor markets

international environmental agreements the role of foresight the present paper attempts to bridge the gap between the cooperative and the non cooperative approach employed to examine the size of stable coalitions formed to address global environmental problems we do so by endowing countries with foresightedness that is by endogenizing the reaction of the coalition s members to a deviation by one member we assume that when a country contemplates withdrawing or joining an agreement it takes into account the reactions of other countries ignited by its own actions we identify conditions under which there always exists a unique set of farsighted stable ieas the new farsighted ieas can be much larger than those some of the previous models supported but are not always pareto efficient

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

financial liberalization financial regulation and bank efficiency a multi country analysis this article investigates the impact of financial reforms on bank efficiency more specifically we distinguish between two different types of financial reforms i e financial liberalization measures and measures of the quality of bank regulation and supervision i e financial regulation and study their relationship to bank efficiency separately moreover we analyse whether the impact of financial liberalization on bank efficiency is conditional on the quality of regulation and supervision of the banking system we apply stochastic frontier analysis to calculate bank efficiency at the individual bank level and use a new and detailed database that measures different aspects of financial reforms the data set consists of 87 312 bank year observations covering 61 countries for the period 1996 2005 overall we show that the impact of financial liberalization policies on bank efficiency is conditional on the extent to which bank regulation and supervision has been adopted and developed

raiders or saviors the evidence on six controversial investors abstract carl icahn irwin jacobs carl lindner david murdock victor posner and the late charles bluhdorn are usually portrayed as corporate raiders the evidence here however shows that between 1977 and 1982 when it was first announced that they had purchased stock in a given firm stock prices on average increased significantly the investors activities in target firms for the two years following the initial stock purchase are likewise inconsistent with raiding we discuss two hypotheses that are consistent with the evidence first these investors improve the management of target firms second they are systematically able to identify under priced stocks

farsighted coalitional stability abstract i define the largest consistent set a solution concept which applies to situations in which coalitions freely form but cannot make binding contracts act publicly and are fully farsighted in that a coalition considers the possibility that once it acts another coalition might react a third coalition might in turn react and so on without limit i establish weak nonemptiness conditions and apply it to strategic and coalitional form games and majority rule voting i argue that it improves on the von neumann morgenstern stable set as it is usually defined but is consistent with a generalization of the stable set as in the theory of social situations journal of economic literature classification numbers c70 c71

corporate financial policy and corporate control abstract this paper presents evidence that stockholder wealth declines on average when managers respond to attempted hostile takeovers with defensive changes in asset and ownership structure the data also indicate that these corporate restructurings are typically quite large and that many are attempts by managers to create barriers specific to the hostile bidder and or to consolidate a block of voting securities in the hands of management allies the evidence suggests that defensive motives whether beneficial or harmful influence corporate asset and ownership structure

standstill agreements privately negotiated stock repurchases and the market for corporate control abstract standstill agreements are voluntary contracts which limit a substantial stockholder s ownership interest in a corporation for a specified number of years they are often accompanied by repurchase of the substantial stockholder s shares at a premium above the market price standstills and premium buybacks reduce competition for corporate control and provide differential treatment of large block stockholders the analysis indicates a statistically significant negative average effect on non participating stockholder wealth associated with standstill agreements negotiated premium repurchases are also associated with negative but less significant stockholder returns the evidence is inconsistent with the hypothesis that these management actions are in the best interests of non participating stockholders

negotiated block trades and corporate control we identify negotiated trades of large percentage blocks of stock as corporate control transactions when a block trades and the firm is not fully acquired cumulative abnormal returns average 5 6 and 33 of the chief executives are replaced within a year stock price increases are larger when control passes to the new blockholder when management does not resist the blockholder s effort to influence corporate policy and when the block purchaser eventually fully acquires the firm these findings suggest that the specific skills and expertise of blockholders and not just the concentration of ownership are important determinants of firm value we examine 106 negotiated trades of at least 5 of the common stock of new york stock exchange nyse and american stock exchange amex listed corporations our primary objective is to assess the impact of these transactions on the firms whose shares are traded we also investigate the importance of active block investor s specific managerial expertise and incentives for firm value the emerging literature on concentrated ownership focuses on how the level of ownership affects a blockholder s incentives to undertake a variety of corporate decisions although it has been recognized that a blockholder s identity also can be important less attention has been paid to this issue several recent studies however provide evidence that blockholders incentives and expertise are not homogeneous for example holderness and sheehan 1985 find that the stock market reacts more favorably to initial block accumulations by six controversial investors who are often portrayed in the press as raiders than to initial accumulations by a random sample of investors morck shleifer and vishny 1988 find that firm value tends to be lower when the firm is run by a member of the founder s family than when it is run by an officer unrelated to the founder brickley lease and smith 1988 document that institutional blockholders are less willing to vote against management on antitakeover amendments when they are likely to have business dealings with the firm when a block trades the concentration of ownership typically does not change but the blockholder s identity does

the dominance of inefficiencies over scale and product mix economies in banking abstract this study measures and analyzes inefficiencies for all u s banks in 1984 inefficiencies are measured relative to a thick frontier cost function and are found to dominate measured scale and product mix economies most inefficiencies are operational in nature involving the overuse of physical inputs rather than financial involving overpayment of interest also technical inefficiencies proportionate overuse of all inputs dominate allocative inefficiencies improper mix of inputs these results suggest that competitive pressures in banking from deregulation will be focused primarily on banks that do not control costs rather than on those of a particular size or product mix

co determination and innovation this paper examines the effect of the german co determination law of 1976 mitbestg on the innovative activity of german firms co determination applies to firms with 2 000 employees or more data from 1971 1976 and 1981 1990 on 148 firms are used to compare the number of patents granted to co determined firms before and after the introduction of the law several control variables are applied and in particular in order to avoid a possible bias from specific effects of firm size we compare the co determined firms with others before and after 1976 the results do not support the view that co determination slows down technological progress and reduces innovativity

equilibrium binding agreements abstract we study equilibrium binding agreements the coalition structures that form under such agreements and the efficiency of the outcomes that result we analyze such agreements in a context where the payoff to each player depends on the actions of all other players thus a game in strategic form is a natural starting point unlike the device of a characteristic function explicit attention is paid to the behavior of the complementary set of players when a coalition blocks a proposed agreement a solution concept and its applications are discussed journal of economic literature classification numbers c70 c71

competition and cooperation in corporate governance the effects of labor institutions on blockholder effectiveness in 23 european countries we provide an analysis of the costs and benefits of blockholding in europe where it is a dominant but certainly not universal corporate governance strategy for shareholders of publicly listed firms we find that the effectiveness of blockholding is conditioned by the specific labor institutions that distinguish european countries from the rest of the world and that these institutional effects involve both competition and cooperation between blockholders and collective labor interests we also find that relational blockholders are better able to cope with or benefit from these institutional effects than arm s length blockholders empirically we use advanced meta analytic methods on a total sample of 748 569 firm year observations derived from 162 studies covering 23 european countries

the impact of liberalization and foreign investment in colombia s financial sector abstract this study analyzes financial liberalization measures undertaken in 1990 of which an opening to foreign investment was a major component after a brief description of the major changes in legislation on foreign investment we compare performance of foreign owned vs domestic banks first using a descriptive approach then in a more systematic manner using econometric analysis panel data estimations reveal that financial liberalization in general had a beneficial impact on bank behavior in colombia by increasing competition lowering intermediation costs and improving loan quality although the positive contribution of foreign entry may be overstated in recent studies by not controlling for other liberalization factors foreign and domestic entry beginning in 1990 did improve bank behavior by enhancing operative efficiency and competition however the greater competition may have resulted in increased risk and a subsequent deterioration in loan quality particularly among domestic banks

toehold acquisitions shareholder wealth and the market for corporate control this study examines the valuation consequences of control related outcomes that fol low toehold acquisitions we find evidence that toehold acquisitions facilitate valueenhancing control transfers the types of control transfers not only include takeovers but also internal mechanisms such as proxy fights and management turnovers we find that toehold targets experiencing such control transfers exhibit an abnormal increase in share value while those not experiencing such control transfers exhibit an abnormal de crease in share value the results suggest that the positive valuation effect associated with toehold acquisitions reflects the expected benefits of subsequent control transfers

risk arbitrage in takeovers this article studies the role of risk arbitrageurs in takeovers and the source of their advantage we show how the presence of arbitrageurs affects the value of the target shares since arbitrageurs are more likely to tender therefore an arbitrageur has the informational advantage of knowing he bought shares in equilibrium the number of arbitrageurs buying shares and the price they pay are determined endogenously we also present several empirical implications including the relationship among trading volume takeover premium liquidity of the shares and the number of risk arbitrageurs investing in one particular deal copyright 2002 oxford university press

when competitive advantage doesn t lead to performance the resource based view and stakeholder bargaining power what if rent from a competitive advantage is appropriated so it cannot be observed in performance measures the resourcebased view was not formulated to examine who will get the rent yet this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent knowledge based assets are promising because firm specificity social complexity and causal ambiguity make them hard to imit ate however the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors this essay integrates the resource based view with the bargaining power literature by defining the firm as a nexus of contracts this new lens can help to explain when rent will be generated and simultaneously who will appropriate it in doing so it provides a more robust theory of firm performance than the resource based view alone it is also suggested that this lens might be useful for examining other theories of firm performance

own company stock in defined contribution pension plans a takeover defense abstract if managers induce employees to hold company stock in defined contribution pension plans as a form of takeover defense then changes in state laws that enhance managerial protection should lead to a reduction in employer stock in 401 k plans delaware s mid 1990s validation of the poison pill in conjunction with a staggered board was followed by a significant decline in employee ownership within defined contribution plans for firms incorporated in delaware evidence using governance data suggests that this is due to responses of firms with staggered boards binary choice models confirm that employee ownership in defined contribution plans lowers takeover probabilities

stable coalition structures with externalities this paper argues that the sign of external effects of coalition formation provides a useful organizing principle in examining economic coalitions in many interesting economic games coalition formation creates either negatie externalities or posi tie externalities for nonmembers examples of negative externalities are research coalitions and customs unions examples of positive externalities include output cartels and public goods coalitions i characterize and compare stable coalition structures under the following three rules of coalition formation the open

coalitions agreements and efficiency if agents negotiate openly and form coalitions can they reach efficient agreements we address this issue within a class of coalition formation games with externalities where agents preferences depend solely on the coalition structures they are associated with we derive ray and vohra s 1997 notion of equilibrium binding agreements using von neumann and morgenstern abstract stable set and then extend it to allow for arbitrary coalitional deviations as opposed to nested deviations assumed originally we show that while the new notion facilitates the attainment of efficient agreements inefficient agreements can nevertheless arise

comparing capitalisms understanding institutional diversity and its implications for international business this paper examines the role of institutional analysis within the field of international business ib studies within ib institutions matter but the view of institutions tends to be thin utilizing summary indicators rather than detailed description and thus approaches institutions as unidimensional variables that impact on particular facets of business activity this paper argues that ib research would be usefully advanced by greater attention to comparing the topography of institutional landscapes and understanding their diversity a number of alternative case based approaches are outlined that draw on a growing comparative capitalisms literature in sociology and political science the paper develops a number of empirical examples to show the utility and limits of these approaches for ib scholars

financial liberalization and bank efficiency a comparative analysis of india and pakistan this paper provides a comparative analysis of the evolution of the technical efficiency of commercial banks in india and pakistan during 1988 1998 a period characterized by far reaching changes in the banking industry brought about by financial liberalization data envelopment analysis is applied to two alternative input output specifications to measure technical efficiency and to decompose technical efficiency into its two components pure technical efficiency and scale efficiency the consistency of the estimated efficiency scores are checked by examining their relationship with three traditional non frontier measures of bank performance in addition the relationship between bank size and technical efficiency is examined it is found that the overall technical efficiency of the banking industry of both countries improved gradually over the years especially after 1995 unlike public sector banks in india public sector banks in pakistan witnessed improvement in scale efficiency only it is also found that banks are relatively more efficient in generating earning assets than in generating income this is attributed to the presence of high non performing loans in addition it is found that the gap between the pure technical efficiency of different size groups has declined over the years

the wealth effect of merger activity and the objective functions of merging firms abstract this paper studies the net effects of the long run sequence of events leading to merger and of merger per se on shareholder wealth the appropriate measure of the wealth effect is shown to be the abnormal dollar return cumulated over time using this measure the long run wealth effect of the event sequence culminating in merger is significantly negative for acquiring firms for acquired firms the effect is negative but not significant the immediate impact of merger per se is positive and highly significant for acquired firms but larger in absolute value and negative for acquiring firms the evidence also reveals that measured abnormal rates of return to acquiring firms are sensitive to a slight variation in model specification and dependent on firm size with smaller firms earning significantly negative post merger returns

the impact of liberalization on the productive efficiency of indian commercial banks abstract we examine the productive efficiency of 70 indian commercial banks during the early stages 1986 1991 of the ongoing period of liberalization we use data envelopment analysis to calculate radial technical efficiency scores we then use stochastic frontier analysis to attribute variation in the calculated efficiency scores to three sources a temporal component an ownership component and a random noise component we find publicly owned indian banks to have been the most efficient followed by foreign owned banks and privately owned indian banks we also find a temporal improvement in the performance of foreign owned banks virtually no trend in the performance of privately owned indian banks and a temporal decline in the performance of publicly owned indian banks we attempt to explain these patterns in terms of the government s evolving regulatory policies

country level institutions firm value and the role of corporate social responsibility initiatives drawing on transaction cost theories and the resource based view of a firm we posit that the value of corporate social responsibility csr initiatives is greater in countries where an absence of market supporting institutions increases transaction costs and limits access to resources using a large sample of 11 672 firm year observations representing 2445 unique firms from 53 countries during 2003 2010 and controlling for firm level unobservable heterogeneity we find supportive evidence that csr is more positively related to firm value in countries with weaker market institutions we also provide evidence on the channels through which csr initiatives reduce transaction costs we find that csr is associated with improved access to financing in countries with weaker equity and credit markets greater investment and lower default risk in countries with more limited business freedom and longer trade credit period and higher future sales growth in countries with weaker legal institutions our findings provide new insights on non market mechanisms such as csr through which firms can compensate for institutional voids

the roles of corporate governance in bank failures during the recent financial crisis abstract this paper analyzes the roles of corporate governance in bank defaults during the recent financial crisis of 2007 2010 using a data sample of 249 default and 4 021 no default us commercial banks we investigate the impact of bank ownership and management structures on the probability of default the results show that defaults are strongly influenced by a bank s ownership structure high shareholdings of outside directors and chief officers managers with a chief officer position such as the ceo cfo etc imply a substantially lower probability of failure in contrast high shareholdings of lower level management such as vice presidents increase default risk significantly these findings suggest that high stakes in the bank induce outside directors and upper level management to control and reduce risk while greater stakes for lower level management seem to induce it to take high risks which may eventually result in bank default some accounting variables such as capital earnings and non performing loans also help predict bank default however other potential stability indicators such as the management structure of the bank indicators of market competition subprime mortgage risks state economic conditions and regulatory influences do not appear to be decisive factors in predicting bank default

determinants of bank cost efficiency in transition economies evidence for latin america central and eastern europe and south east asia in this study we adopt wang s 2002 heteroscedastic stochastic frontier model which allows us to investigate bank cost efficiency and to measure the marginal effects of some variables on both the level and the variability of inefficiency in recent years the financial crisis has significantly affected the banking systems of the transition countries hence the efficiency is of major importance for the stability of the banks regarding the determinants of efficiency we find evidence that banks that follow a more cautious strategy characterized by lower risk appetite and average expectations on profitability have higher cost efficiency we also find that traditional deposit taking and loan making still remain the most efficient activity of the banks additionally the results showed that a higher gross domestic product growth rate implies an increase in the inefficiency level indicating an unsustainable bank management behaviour which in periods of economic growth adopts policies that can generate

capital labor and the firm a study of german codetermination under the german corporate governance system of codetermination employees are legally allocated control rights over corporate assets through seats on the supervisory board that is the board of nonexecutive directors the supervisory board oversees the management board the board of executive directors approves or rejects its decisions and appoints its members and sets their salaries we empirically investigate the implications of this sort of labor participation in corporate decision making we find that companies with equal representation of employees and shareholders on the supervisory board trade at a 31 stock market discount as compared with companies where employee representatives fill only one third of the supervisory board seats we show that under equal representation management board compensation provides incentives that are not conducive to furthering shareholders interests possibly because labor maximizes a different objective function than shareholders we document that under equal representation companies have longer payrolls than their one third representation peers have finally we provide evidence that shareholders respond to the allocation of control rights to labor by linking supervisory board compensation to firm performance and by leveraging up the firm jel g32 g34

technical scale and allocative efficiencies in u s banking an empirical investigation a nonparametric frontier approach is used to calculate the overall technical pure technical allocative and scale efficiencies for a sample of 322 independent banks the sample was drawn from the federal deposit insurance corporation tapes on the reports of condition and reports of income call reports for the year 1986 the results indicated a low level of overall efficiency the main source of inefficiency was technical in nature rather than allocative separate efficiency frontiers were constructed to test the effect of branching however the distributions of efficiency measures for branching and non branching banks were not found to be different

blocks liquidity and corporate control the paper develops a simple model of corporate ownership structure in which costs and benefits of ownership concentration are analyzed the model cornpares the liquidity benefits obtained through dispersed corporate ownership with the benefits from efficient management control achieved by some degree of ownership concentration the paper reexamines the free rider problem in corporate control in the presence of liquidity trading derives predictions for the trade and pricing of blocks and provides criteria for the optimal choice of ownership structure the recent incomplete contracting approach in corporate finance has considerably improved our understanding of how small firms determine their capital structure the basic setting considered in this line of research is one where a founder manager seeks funding from one or several financiers the main premise is that the founder manager in her dealings with the financiers is primarily concerned with maintaining her private benefits of control for small firms these are often quite large relative to the financial returns thus for a small firm the problem of determining the financial structure often reduces to the problem of how to obtain fundingr while giving away as little control as possible to the financiers of course most financiers insist on some form of protection so that the final compromise reached in most financial contracts for small firms is one resembling a debt contract or a venture capital contract which protects the founder manager s control as long as the firm is performing adequately this perspective for small firms does not extend naturally to large firms because the private benefits of control of the managers for large firms are likely to be small relative to the firm s monetary returns so that protection of these benefits is not an overriding consideration moreover large firms

the regulation of labor author s botero juan djankov simeon la porta rafael lopez de silanes florencio shleifer andrei abstract we investigate the regulation of labor markets through employment collective relations and social security laws in 85 countries we find that the political power of the left is associated with more stringent labor regulations and more generous social security systems and that socialist french and scandinavian legal origin countries have sharply higher levels of labor regulation than do common law countries however the effects of legal origins are larger and explain more of the variation in regulations than those of politics heavier regulation of labor is associated with lower labor force participation and higher unemployment especially of the young these results are most naturally consistent with legal theories according to which countries have pervasive regulaory styles inherited from the transplantation of legal systems

dynamic capabilities what are they this paper focuses on dynamic capabilities and more generally the resource based view of the firm we argue that dynamic capabilities are a set of specific and identifiable processes such as product development strategic decision making and alliancing they are neither vague nor tautological although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence they have significant commonalities across firms popularly termed best practice this suggests that they are more homogeneous fungible equifinal and substitutable than is usually assumed in moderately dynamic markets dynamic capabilities resemble the traditional conception of routines they are detailed analytic stable processes with predictable outcomes in contrast in high velocity markets they are simple highly experiential and fragile processes with unpredictable outcomes finally well known learning mechanisms guide the evolution of dynamic capabilities in moderately dynamic markets the evolutionary emphasis is on variation in high velocity markets it is on selection at the level of rbv we conclude that traditional rbv misidentifies the locus of long term competitive advantage in dynamic markets overemphasizes the strategic logic of leverage and reaches a boundary condition in high velocity markets copyright 2000 john wiley sons ltd

banking efficiency in the nordic countries abstract evidence of the relative competitiveness of the banking industries in three nordic countries is provided by applying data envelopment analysis of productivity on the national and the pooled data sets the analysis produces a detailed account of how well banks from different countries and different sizes may be prepared to meet the more intense competition of a common european banking market

stock price effects and costs of secondary distributions abstract this study does not support the view that a large number of shares can be sold at the prevailing market price and at a small cost a significant stock price decrease is observed at the initial announcement of secondary distributions the price declines are greater for offerings by officers and directors and for larger offerings but are significant for all types of sellers and for large and small offerings there is no significant price decline at the offering when secondaries are announced in advance underwriting and other selling costs are substantial and are positively related to relative offering size

economic policy uncertainty ceo characteristics and firm r d expenditure a bayesian analysis this paper applies a linear bayesian regression model to study the effects of economic policy uncertainty epu and chief executive officer ceo characteristics on firm research and development r

moral hazard competition and contract design empirical evidence from managerial franchised and entrepreneurial businesses in norway agency theory emphasizes the role of ownership control and incentives in encouraging managers to improve efficiency owners often tie managers to contracts that reduce conflict of interest between owners and managers the differences between alternative business ownership structures have been investigated according to theory we expect managers with an outcome dependent dealer contract to be more efficient than managers with a more integrated and less performance based employee dealer contract we also analyse how competitive pressure might reduce the moral hazard problem and therefore affect contract design berle and means the modern corporation and private property macmillan new york 1932 long ago stated that the market mechanism could constrain the agency problem even so this problem has scarcely been investigated empirically this paper also considers the contractual effect of potential monitoring costs education and relationship age in a model tested on data from 175 dealer contracts in a

financial sector liberalization bank privatization and efficiency evidence from pakistan abstract the pakistani banking system has been transformed over the past 15 years through liberalization the entry of private banks the privatization of public sector banks and the tightening of prudential regulations the effects of these changes on bank productivity and relative efficiency are investigated using various techniques bank productivity in terms of profits has increased and new entrants have been efficient but the dispersion of efficiency remains wide the privatized banks improved their profit efficiency in the period immediately following their privatization but in the subsequent years only one significantly improved its efficiency whereas the other did not differentiate itself in terms of efficiency from the remaining state owned banks the new private domestic banks generally proved to be among the most efficient and sometimes out performed the foreign banks

the effects of deregulation on the performance of financial institutions the case of spanish savings banks this paper examines the impact of regulatory reform on the performance of spanish savings banks the focus is whether increased competition brought on by deregulation affected performance of banks over time output technical efficiency which is defined in terms of the production possibility frontier is also examined empirical results show declining levels of output technical efficiency along with a significantly high rate of technical progress in spite of declining technical efficiency during this period evidence of an increasing trend in productivity growth is found

deregulation ownership and productivity growth in the banking industry evidence from india this paper analyzes the relationship between deregulation and total factor productivity tfp growth in the indian banking industry using a generalized shadow cost function approach tfp growth is decomposed into a technological change a scale and a miscellaneous component a disaggregated panel data analysis using the population of public and private banks over 1985 96 that covers both pre and post deregulation periods indicates that a significant decline in regulatory distortions and the anticipated increase in tfp growth have not yet materialized following deregulation while private sector banks have improved their performance mainly due to the freedom to expand output public sector banks have not responded well to the deregulation measures

ownership of equity in dual class firms abstract the paper investigates the hypothesis that large shareholders use shares with differential voting rights for the purpose of expropriating minority shareholders consistent with several theoretical arguments but inconsistent with the expropriation hypothesis we find that large shareholders own much more equity than required for control we also show how the law can construct a regulation which reduces the opportunity for expropriation and at the same time allows for the possible benefits of differential voting rights

deregulation and productivity decline the case of spanish savings banks abstract during the 1980s many regulatory constraints limiting competition in spanish banking were relaxed or removed although deregulation came later to savings banks than to the rest of the banking sector two consequences of partial deregulation of savings banks have been a rapid growth in branching activity much of it geographically dispersed and a burst of merger activity in this paper we investigate productive efficiency and total factor productivity change in spanish savings banks over the 1986 1991 post deregulation period neither branching nor mergers provide an adequate explanation for the magnitude or the nature of the productivity decline we observe over the period

core deposits and physical capital a reexamination of bank scale economies and efficiency with quasi fixed inputs this paper compares measures of bank production efficiency assuming all bank inputs are completely variable with measures obtained from specifications which take account of the quasi fixed nature of core deposits and bank physical capital and the treatment of certain deposits as outputs the empirical results imply that scale economy measures vary substantially for small to medium sized banks whereas those for the largest banks are fairly robust to the different specifications estimates of economies of scope were found to be invariant to different input output specifications whereas efficiency measures varied significantly with changes in the specification of the cost function and with the definition of outputs and inputs copyright 1995 by ohio state university press

firm value in commonly uncertain times the divergent effects of corporate governance and csr economic uncertainty disrupts firms ability to create value most related literature examines how various organizational characteristics affect value under extreme conditions the global financia

the impact of financial liberalization on bank efficiency evidence from latin america and asia this article investigates the impact of financial liberalization on bank efficiency using data for a sample of over 4000 bank year observations from ten emerging economies for the period 1991 2000 we use data envelopment analysis dea to calculate bank efficiency at the individual bank level bank efficiency measures are then aggregated at the country level to investigate the relationship between financial liberalization and bank efficiency using a panel least square fixed effects model overall we find strong support for the positive impact of financial liberalization programmes on bank efficiency

the stability of hedonic coalition structures we consider the partitioning of a society into coalitions in purely hedonic settings i e where each player s payoff is completely determined by the identity of other members of her coalition we first discuss how hedonic and nonhedonic settings differ and some sufficient conditions for the existence of core stable coalition partitions in hedonic settings we then focus on a weaker stability condition individual stability where no player can benefit from moving to another coalition while not hurting the members of that new coalition we show that if coalitions can be ordered according to some characteristic over which players have single peaked preferences or where players have symmetric and additively separable preferences then there exists an individually stable coalition partition examples show that without these conditions individually stable coalition partitions may not exist we also discuss some other stability concepts and the incompatibility of stability with other normative properties journal of economic literature classification numbers c71 a14 d20

corporate governance and labour management an international comparison preface 1 corporate governance and labour management an international comparison 2 corporate governance and employees in the united states 3 markets and relationships finance governance and labour in the united kingdom 4 corporate governance and employees in germany changing linkages complementarities and tensions 5 corporate governance in germany ownership codetermination and firm performance in a stakeholder economy 6 corporate governance and labour management in the netherlands getting the best of both worlds 7 labour in french corporate governance the missing link 8 corporate governance and employment relations spain in the context of western europe 9 corporate governance and industrial relations in italy 10 corporate governance labour and employment relations in japan the future of the stakeholder model 11 towards a comparative perspective on corporate governance and labour management enterprise coalitions and national trajectories

to steal or not to steal firm attributes legal environment and valuation data on corporate governance and disclosure practices reveal wide within country variation that decreases with the strength of investors legal protection a simple model identifies three firm attributes related to that variation investment opportunities external financing and ownership structure using firm level governance and transparency data from 27 countries we find that all three firm attributes are related to the quality of governance and disclosure practices and firms with higher governance and transparency rankings are valued higher in stock markets all relations are stronger in less investor friendly countries demonstrating that firms adapt to poor legal environments to establish efficient governance practices

welfare improving employment protection this paper derives new results on the welfare effects of employment protection using data from 17 oecd countries we show that there exists an inverse u shape relationship between employment protection and economic growth using a simple theoretical model with non contractible specific investments we show that over some range increasing employment protection does indeed raise welfare we also show that the optimal level of employment protection depends on other labour market features such as the bargaining power of workers and the existence of wage rigidities like the minimum wage

financial deregulation and total factor productivity change an empirical study of turkish commercial banks abstract in january 1980 a new liberal economic policy was adopted in turkey to promote financial market development and increase the efficiency and productivity of the financial sector by fostering competition among banks as a result of this policy the turkish banking system witnessed a series of legal structural and institutional changes throughout the 1980s to enhance their competitive viability turkish banks responded by streamlining their operations and investing in new technology utilizing a dea type malmquist total factor productivity change index we examine productivity growth efficiency change and technical progress in turkish commercial banks during the deregulation of financial markets in turkey we found that all forms of turkish banks although in different magnitudes have recorded significant productivity gains driven mostly by efficiency increases rather than technical progress efficiency increases however were mostly owing to improved resource management practices rather than improved scales our results also indicate that private banks began to close their performance gap with public banks in the new environment

repetition reputation and raiding i develop a multitarget takeover model with bid revisions in which bidders desire a reputation for having low valuations such a reputation increases the likelihood that future targets will accept low premium bids bidders develop reputation by using low take it or leave it offers consequently tender premiums bid revision rates and success rates are lower for continuing bidders than for those considering only a single target success rates vary within a series and reputation building is more likely with highly correlated target valuations i provide an exploratory empirical analysis consistent with lower premiums from continuing bidders and discuss some resulting implications regarding raiders conglomerates and resistance strategies article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

the effects of corporate restructuring on aggregate industry specialization it has been widely argued that the purpose of corporate restructuring during the 1980s was to produce a population of more industry specialized competitive firms in response to intensifying global competition a number of studies show that corporate restructuring resulted in increased corporate focus during the 1980s however no study has yet examined whether corporate restructuring resulted in increased specialization at the industry level during the 1980s this study examines this issue first we examine whether or not aggregate industry specialization increased during the 1980s that is we ask did the average firm in any given u s industry become more or less specialized to that industry during the 1980s second we examine whether corporate restructuring was a significant determinant of change in aggregate industry specialization during the 1980s using a sample of 686 four digit sic industries and 64 two digit industry groups this study finds that aggregate industry specialization declined very slightly at both the four digit and two digit level between 1981 and 1989 this study also finds that sell offs of establishments through corporate control transactions or interfirm asset sales had no significant effect on aggregate industry specialization

technical efficiency and scale efficiency in the italian banking sector a non parametric approach measures of technical and scale efficiencies are derived in the italian banking industries by implementing non parametric data envelopment analysis on a cross section of 174 italian banks taken in 1991 the methodology of the parametric and non parametric approaches to measure efficiency are discussed the existence of both technical and allocative efficiency is established this result is robust to modifications in the specification of inputs and outputs suggested by the intermediation approach and by the asset approach in implementing both the intermediation and the asset approach the traditional specification of inputs is modified to allow an explicit role for financial capital in addition regression analysis is used on a bank specific measure of inefficiency to investigate determinants of banks efficiency efficiency is best explained by productive specialization size and to a lesser extent by location