are overconfident ceos born or made evidence of self attribution bias from frequent acquirers we explore the history of mergers and acquisitions made by individual ceos our study has three main findings 1 ceos first deals exhibit zero announcement effects while their subsequent deals exhibit negative announcement effects 2 while acquisition likelihood increases in the performance associated with previous acquisitions previous positive performance does not curb the negative wealth effects associated with subsequent deals and 3 ceos net purchase of stock is greater preceding subsequent deals than it is for first deals we interpret these results as consistent with self attribution bias leading to overconfidence we also find evidence that the market anticipates future deals based on the ceo s acquisition history and impounds such anticipation into stock prices

partner nationality and the structure performance relationship in strategic alliances the dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business indeed interfirm cooperation has become a crucial component of the pursuit of global competitive advantage yet such alliances are enormously complex to manage successfully in part because of the opportunity and incentive to cheat and profit at the partner s expense that is an inescapable part of these relationships consequently strategic alliances are frequently subject to high instability poor performance and premature dissolution thus an important question arises is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies incentives this question is addressed empirically in the present paper using recent work in game theory which suggests that high performance is linked to specific elements of the alliance structure further this study applies insights from international business literature suggesting th

banking panics information and rational expectations equilibrium this paper shows that bank runs can be modeled as an equilibrium phenomenon we demonstrate that some aspects of the intuitive story that bank runs start with fears of insolvency of banks can be rigorously modeled if individuals observe long lines at the bank they correctly infer that there is a possibility that the bank is about to fail and precipitate a bank run however bank runs occur even when no one has any adverse information extra market constraints such as suspension of convertibility can prevent bank runs and result in superior allocations banking panics were a recurrent phenomenon in the united states until the 1930s they have re emerged as a source of public concern and much theoretical research recently in this paper we provide an information theoretic rationale for bank runs the traditional story is that contagion is an important aspect of bank runs the idea seems to be that when the general public observes large withdrawals from the banking system fears of insolvency grow resulting in even larger withdrawals of deposits in our model some individuals withdraw because they get information that future returns are likely to be low uninformed individuals observing this also have an incentive to liquidate their investments in addition some individuals need to withdraw deposits for other than informationally based reasons thus if the random realization of such a group of individuals is unusually large then the uninformed individuals will be misled and will precipitate a run on the bank the technology is such that a large volume of withdrawals involves liquidation costs consequently runs on the bank do impose social costs a mechanism that may reduce these costs in our model is to suspend convertibility if withdrawals are high however those individuals who need to withdraw their assets for liquidity reasons are worse off ex post our model provides a rationalization for restrictions in demand deposits that were widespread prior to 1929 friedman and schwartz 7 suggest that restrictions of payments ensured

ownership based entry mode strategies and international performance this study examines the relationship between ownership entry modes and performance the ownership entry modes examined are the wholly owned modes of acquisition and new venture entry and the non wholly owned mode of joint venture entry a theoretical relationship is developed for international entry modes that is based on the contingency characteristics of resource requirements and organizational control factors this model suggests that different entry modes have different performance outcomes based upon their resource and organizational control demands the theoretical model although developed using the eclectic theoretical approach is based largely on concepts and relationships previously delineated in contingency theory our hypotheses suggest that new ventures should outperform joint ventures and joint ventures should outperform acquisitions an empirical test using a sample of 321 japanese firms entering the north american market provides supporting evidence

the effect of the governance environment on marketing channel behaviors the diamond industries in the u s china and hong kong international differences in how market exchanges are conducted e g the mode of entry level of ownership and conflict resolution have been attributed mainly to national culture and cultural distance however the cultural arguments cannot explain why economies countries with similar cultural backgrounds e g hong kong and china exhibit differences in exchange arrangements thus the cultural arguments provide little strategic guidance to multinational corporations mncs in international marketing we propose that in addition to culture the governance environment in a country namely the political economic and social institutions that facilitate or constrain the choice of governance mechanisms influences the way organizations conduct market exchanges this important factor heretofore has been ignored specifically we introduce a typology of rule based and relation based governance environment to explain how the environment affects marketing channel behaviors such as barriers to entry channel exclusivity information access trust and dispute resolution we analyze the diamond industry in the rule based governance environment in the u s and in the relation based governance environment in china and using the diamond industry in hong kong as a validation to develop theoretical propositions and strategic implications for mncs

legitimacy and multi level institutional environments implications for foreign subsidiary ownership structure in this study we examine from an institutional perspective the legitimacy rationale behind the choice of subsidiary ownership structure among multinational corporations mncs we suggest that when under a strong pressure to conform at the host country and local industry levels of their institutional environment mncs are likely to take a lower ownership stake in exchange for external legitimacy in the host country or local industry that their foreign subsidiaries are entering we also suggest that mncs are likely to take a higher ownership stake in response to strong internal pressure to sustain their internal legitimacy at the corporate level of their institutional environment we also propose that mncs are more likely to exchange ownership for legitimacy in local industries than in host countries and in local markets with a high level of political instability than in those with a low level of political instability these propositions are generally supported by our analysis of 4451 subsidiaries established by 898 japanese mncs that operated in 39 countries across 52 industries two digit sic between 1988 and 1999

relatively weak increases in risk and their comparative statics abstract we propose in this paper a new condition on increases in risk to obtain the desirable comparative statics properties for non linear payoffs our new concept of relatively weak increases in risk extends the definition of relatively strong increases in risk black and bulkley international economic review 1989 30 119 130

comparative statics predictions for the cross effects of central dominance changes in risk with quasilinear payoffs abstract we examine cross effects for central dominance changes in the random payoff to one activity on the willingness of a risk averter to undertake or expand a second this willingness is enhanced for quasilinear payoffs when activities are cost substitutes

comparative statics of changes in risk on monotonically and partially responsive kinked payoffs abstract this paper derives two sets of necessary and sufficient conditions on the comparative statics of changes in risk under kinked payoff functions that are monotonically responsive and partially responsive to the realization of risk respectively the former case includes the newsboy problem with backorder the latter case includes the newsboy problem without backorder and under some restrictions also includes the optimal deductible insurance problem some relatively non restrictive conditions derived from the necessary and sufficient conditions reveal that the three problems can be quite different even though they are often viewed in the literature as being congruous these conditions lead to simple predictions of the direction of change in any risk averse agent s optimal choice upon a change in risk without assuming specific functional forms for the utility function

the choice between joint venture and wholly owned subsidiary an institutional perspective the study of foreign entry mode choice has been based almost exclusively on transaction cost theory this theory focuses mainly on the impacts of firm and industry specific factors on the choice of entry mode taking the effects of country specific contextual factors as constant or less important in contrast the institutional perspective emphasizes the importance of the influence of both institutional forces embedded in national environments and decision makers cognitive constraints on the founding conditions of new ventures still this theoretical perspective has yet to provide insights into how institutional factors influence the choice of foreign entry mode the primary goal of the present study is to provide a unifying theoretical framework to examine this relationship we synthesize transaction cost and institutional perspectives to analyze a sample of 364 japanese overseas subsidiaries our results support the notion that institutional theory provides incremental explanatory power of foreign entry mode choice in addition to transaction cost theory in particular we found that multinational enterprises tend to conform to the regulative settings of the host country environment the normative pressures imposed by the local people and the cognitive mindsets as bounded by counterparts and multinational enterprises own entry patterns when making foreign entry mode choices

predisclosure information firm capitalization and security price behavior around earnings announcements several studies on the relationship between earnings reports and security price behavior provide evidence suggesting that a significant portion of the information revealed through earnings reports is reflected in security prices prior to the report month e g ball and brown 1968 and brown and kennelly 1972 this has been attributed at least partly to the existence of other more timely sources of information which allow market agents to forecast earnings prior to their release the evidence above reflects an average finding across all firms one question of interest is whether there are significant systematic crosssectional differences in the security price reactions to earnings announcements of firms which are associated with specific firm characteristics that lead to differential amounts of predisclosure information this study focuses on firm size capitalization as one such characteristic a firm

nationality and subsidiary ownership patterns in multinational corporations this paper examines the notion that the multinational s nationality influences its foreign subsidiary ownership decisions it identifies theoretically meaningful constructs to represent nationality and examines under carefully controlled conditions their influence on subsidiary ownership preferences in american and european multinationals the paper concludes that there are indeed significant differences in ownership preferences among various nationalities that can be explained using cultural as well as economic variables but that these differences may become weaker in larger multinationals

once bitten not necessarily shy determinants of foreign market re entry commitment strategies we investigate foreign market re entry commitment strategies namely the changes in the modes of operation commitment undertaken by multinational enterprises mnes as they return to foreign markets from which they had previously exited we combine organisational learning theory with the institutional change literature to examine the antecedents of re entry commitment strategies from an analysis of 1020 re entry events between 1980 and 2016 we find that operation mode prior to exit is a strong predictor of subsequent re entry mode contrary to the predictions of learning theory we did not find support for the effect of experience accumulated during the initial market endeavour on the re entry commitment strategies of mnes in turn exit motives significantly impact on the re entrants decision to re enter via a different mode of operation by either increasing or decreasing their commitment to the market we show that re entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market when favourable host institutional changes occur during the time out period re entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market

analyzing foreign market entry strategies extending the internalization approach a new fully integrated analysis of the foreign market entry decision is presented encompassing the choice between exporting licensing joint venturing and wholly owned foreign investment the choice between acquisition and greenfield investment is examined and so too are options based on subcontracting and franchising the model extends the insights of internalization theory and draws on concepts from the economics of industrial organization a special feature of the model is the distinction between investment in production facilities and investment in distribution facilities an important practical distinction that has been overlooked in much of the international business literature the strength of competition from indigenous rivals is emphasized as a determinant of entry strategy into both production and distribution

industry information diffusion and the lead lag effect in stock returns i argue that the slow diffusion of industry information is a leading cause of the lead lag effect in stock returns i find that the lead lag effect between big firms and small firms is predominantly an intra industry phenomenon moreover this effect is driven by sluggish adjustment to negative information and is robust to alternative determinants of the lead lag effect small less competitive and neglected industries experience a more pronounced lead lag effect the lead lag effect is related to the post announcement drift of small firms following the earnings releases of big firms within the industry

outside risk aversion and the comparative statics of increasing risk in quasi linear decision models necessary and sufficient conditions are derived to determine the effect of increases in rothschild stiglitz risk on optimal decisions in a class of competitive models with price uncertainty outside risk aversion and composite outside risk aversion are defined the effect of increased risk on the optimal decision is controlled by composite outside risk aversion it is decomposed into a wealth effect controlled by downside risk aversion and an uncertainty effect controlled by outside risk aversion composite outside risk aversion is shown to be equivalent to outside risk aversion so that the uncertainty effect controls the overall effect copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

comparative statics and non expected utility preferences abstract researchers have shown that many though not all of the basic results of expected utility analysis can be more or less directly generalized to non expected utility preferences this paper describes the essential difference between results which can be extended in this manner and those which cannot and shows that an important family of comparative statics theorems falls into the former class

the impact of culture on the strategy of multinational enterprises does national origin affect ownership decisions this paper tests the proposition that national origin affects the strategies of multinational enterprises by looking at the determinants of the choice they make between entering the united states through partially versus wholly owned subsidiaries we pool entries into the united states made by firms based in two countries japan and finland which differ both in their cultural characteristics and in their cultural distance to the united states after carefully controlling for the known firm and industry level determinants of subsidiary ownership strategies we find that cultural distance between the home base of the investor and the target country or perhaps political risk exerts a powerful influence on ownership of subsidiaries but cultural characteristics of the home base do not

beyond entry mode choice explaining the conversion of joint ventures into wholly owned subsidiaries in the people s republic of china while there is a vast amount of research on firms choice of ownership form when entering a foreign market little attention has been paid to changes in ownership forms of operation abroad after initial entry using transaction cost economics and institutional theory we identify a number of factors that may help to explain the likelihood of foreign firms converting their joint venture with a local firm into a wholly owned subsidiary we formulate a number of hypotheses and test them against data collected through a questionnaire survey of managers representing foreign subsidiaries in the people s republic of china prc that are run either as international joint ventures ijvs or as wholly owned foreign subsidiaries wfoes that have recently been converted from ijvs into a wfoe the paper contributes to research by showing that transaction cost based thinking is useful for explaining not only the initial choice of ownership mode when entering a new market but also the potential subsequent changes of this ownership mode by combining transaction cost theory with arguments from institutional theory the study identifies a number of factors that contribute to explaining post entry changes of foreign firms ownership forms in the prc and provides empirical evidence of this phenomenon

are foreign owned firms more likely to pay bribes than domestic ones evidence from emerging markets summary an extensive literature exists on the adverse effects of corruption on inward fdi and the impact this may have on economic development but the reverse causality has not been fully explored legislation in the us and the eu prohibits firms from engaging in corrupt practices in foreign countries and this suggests that foreign owned firms might be less likely to pay bribes however such legislation may be ineffective because foreign firms have to adapt to local market conditions or risk being uncompetitive using firm level data for 41 emerging countries a probit model estimates the probability that a firm pays bribes to allow for possible endogeneity this probit analysis is repeated with an instrument to proxy for endogenous foreign ownership then a propensity score matching technique tests for differences in the propensity to pay bribes by domestic and foreign firms the paper finds no difference in the behavior of foreign owned and domestic firms with respect to corrupt practices results are robust to different levels of foreign ownership and support the view that foreign owned firms adapt to local practices and are neither more nor less likely to pay bribes than comparable domestic firms the paper finds that other variables including bureaucracy government contracts and perceived difficulties with civil society legal and political do have statistically significant effects on increasing bribery and that some others such as per capita gdp tend to reduce bribery the study concludes that there is no evidence that foreign ownership after investment has occurred tends to reduce bribery but it does support the view that foreign owned firms adopt local behavioral norms

do bad bidders become good targets this paper empirically examines one motive for takeovers to change control of firms that make acquisitions that diminish the value of their equity firms that subsequently become takeover targets make acquisitions that significantly reduce their equity value and firms that do not become takeover targets make acquisitions that raise their equity value within the sample of acquisition by targets the acquisitions that reduce equity value the most are those that are later divested either in bust up takeovers or restructuring programs to thwart the takeover this evidence is consistent with theories advanced by marris manne and jensen concerning the disciplinary role played by takeovers

global strategy and multinationals entry mode choice this paper makes a case directed towards establishing the importance of global strategic considerations in choosing multinationals entry mode specifically it is our contention that beyond the environmental and transaction specific factors well established in the literature to affect the entry mode decision we should also consider the strategic relationship a multinational envisages between its operations across borders in reaching this decision after incorporating various global strategic variables into an eclectic framework of the factors influencing the entry mode choice this paper tests both the validity of the overall framework and the importance of each entry mode determinant in differ entiating among entry modes this is done based on ninety six multinational managers responses to a survey questionnaire concerning their entry mode decision experiences the results suggest that an express incorporation of global strategic variables into an analysis of the entry mode decision is warranted

increases in risk and deductible insurance abstract this paper examines how mean preserving transformations in the loss distribution affect the optimal level of deductibility in an insurance contract if marginal utility is convex increases in risk affecting losses only below the deductible are shown to lead to a reduction in coverage higher deductible which can be viewed as an increase in precautionary savings on the other hand a transformation that spreads losses more towards the tails of the distribution leads to an increase in coverage lower deductible whenever preferences exhibit nonincreasing absolute risk aversion

transaction cost determinants and ownership based entry mode choice a meta analytical review entry mode choice is a critical ingredient of international entry strategies and has been voluminously examined in the field the findings however are very mixed especially with respect to transaction cost related factors in determining the ownership based entry mode choice this study conducted a meta analysis to quantitatively summarize the literature and empirically generalize more conclusive findings based on the 106 effect sizes of 38 empirical studies the meta analysis shows that the findings of the existing studies are moderated to varying degrees by both study setting factors and statistical artifacts although the combined overall effects of transaction cost based determinants are consistent with the predictions of transaction cost economics we extensively discuss the implications of meta analytical results especially moderating effects of location country of origin industry type and statistical artifacts highlight the measurement adequacy equivalence and multidimensionality of transaction cost determinants and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice

state ownership effect on firms fdi ownership decisions under institutional pressure a study of chinese outward investing firms this study investigates the effect of state ownership on chinese firms foreign direct investment fdi ownership decisions it adopts a political perspective to extend the application of institutional theory in international business research specifically it examines firms heterogeneous responses to external institutional processes during foreign market entry while taking into consideration the political affiliation of firms with the external institutions we argue that state ownership creates the political affiliation of a firm with its home country government which increases the firm s resource dependence on home country institutions while at the same time influencing its image as perceived by host country institutional constituents such resource dependence and political perception increase firms tendency to conform to rather than resist isomorphic institutional pressures we tested our hypotheses using primary data for 132 fdi entries made by chinese firms during 2000 2006 and we found that the effects of home regulatory host regulatory and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high

portfolio choice under noisy asset returns abstract the lack of a clear effect of increases in risk upon the demand for risky assets has led to many restrictions on the types of risk increases and or on consumer preferences in order to obtain unambiguous comparative statics this paper examines the particularly simple yet overlooked case of white noise added to the return distribution it is shown that kimball s standard risk aversion is sufficient for noise to lead to reduced demand for risky assets

corporate takeover bids methods of payment and bidding firms stock returns this study explores the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids the results reveal significant differences in the abnormal returns between common stock exchanges and cash offers the results are independent of the type of takeover bid i e merger or tender offer and of bid outcomes these findings supported by analysis of nonconvertible bonds are attributed mainly to signalling effects and imply that the inconclusive evidence of earlier studies on takeovers may be due to their failure to control for the method of payment recent studies on corporate takeovers provide inconclusive results on the valuation effects of acquisitions on the common stock of bidding firms 1 substantial differences are reported between the studies that analyze acquisitions initiated as tender offers and those that confine their samples to merger proposals the existence of mixed empirical findings for the bidding firms makes it difficult to interpret existing evidence and to draw conclusions about the managers acquisition motivations nevertheless the reason for the substantial difference between empirical findings on mergers and tender offers still remains an unresolved issue it is observed however that mergers are usually common stock exchange offers whereas tender offers are usually cash offers given that different methods of financing a project have different signalling implications myers and majluf 39 the differential stock returns of bidders in mergers and tender offers may be due to the method of acquisition financing

increases in risk and linear payoffs this paper is concerned with the effect of increases in risk on optimal decision variables for the class of linear payoffs the authors show that for this class of payoffs one can extend the class of admissible increases in risk and obtain the desirable comparative statics properties they propose the definition of a relatively weak increase in risk and apply it to the case of the competitive firm with constant marginal costs the standard portfolio model and the coinsurance problem copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the comparative statics of cumulative distribution function changes for the class of risk averse agents abstract the primary question addressed is when does a particular change in the cumulative distribution function cdf describing a random variable always cause all risk averse decision makers to adjust the choice variable in the same direction a necessary and sufficient condition involving both the decision model and the cdf change is derived this condition allows the researcher to determine the tradeoff between assumptions on the economic model and the cdf changes which are necessary and or sufficient to yield determinate comparative static results several applications are included

mergers and the market concentration doctrine evidence from the capital market the last 3 decades of vigorous enforcement of u s antimerger laws is based on the market concentration doctrine one of the oldest and most controversial propositions in industrial economics this doctrine which is an implication of oligopoly models in the tradition of cournot 1838 1927 and nash 1950 holds that the level of industry concentration is a reliable index of the industry s market power the empirical implication is that a relatively high level of industry concentration which in the presence of entry barriers is believed to facilitate intraindustry collusion or dominant firm pricing should be associated with relatively large industrywide monopoly rents following bain 1951 numerous the market concentration doctrine predicts that a horizontal merger is more likely to have collusive anticompetitive effects the greater the merger induced change in industry concentration since a collusive anticompetitive merger generates an increase in the industry s quality adjusted product price or a decrease in factor prices it also follows from the doctrine that the mergerinduced expected benefits to the product market rivals of the merging firms should be an increasing function of the concentration change the empirical results of this paper which are based on the industry wealth effect of a large sample of horizontal mergers including cases found in violation of antimonopoly laws fail to support this prediction this conclusion is robust with respect to assumptions concerning the probability that a proposed merger will be prevented by the law enforcement agencies and it continues to hold after transforming the industry wealth effect into a hypothetical constant expected change in the industry s product price the results imply that the levels of concentration and market shares found in the department of justice s merger guidelines are unlikely to identify truly anticompetitive mergers i wish to thank paul asquith gregg jarrell rex thompson walter vandaele the participants of the economics workshop at the antitrust division of the u s department of justice and a referee of this journal for helpful comments earlier drafts were presented at the 1983 meetings of the european association for research in industrial economics and at the 1984 meetings of the western finance association financial support from the social sciences and humanities research council of canada grant no 494 83 0091 and the u s federal trade commission is also gratefully acknowledged 1 a closely related but somewhat less general prediction is that high levels of concentration should be associated with relatively high supracompetitive product prices although

the transaction costs theory of joint ventures an empirical study of japanese subsidiaries in the united states this paper offers the first large sample empirical study of the factors which influence the choice of japanese firms between full or partial ownership of their u s manufacturing subsidiaries it studies for the first time the ownership policies of investors of a single home country in a single host country thus keeping variations within home and host countries constant one methodological improvement over previous studies is the use as independent variables of the relevant characteristics of the investing firms these had been proxied in previous studies by data on u s industries entered the results suggest that the degree of ownership taken by japanese manufacturing investors in their american subsidiaries is driven by the same general transaction costs variables that determine the choices made by their u s counterparts japanese parents joint venture when they need to combine with other firms intermediate inputs which are subject to high market transaction costs an intriguing result however is the lack of significance of two variables which in the u s case strongly push towards full control of foreign subsidiaries in this study neither the japanese parent s r d nor its advertising intensities had any significant impact on their ownership policies

do tender offers create value new methods and evidence abstract conventional techniques of estimating takeover value improvements measure only a fraction of the total gain and include revelation about bidder stand alone value to address these biases we develop the probability scaling method which rescales announcement date returns and the intervention method which uses returns at intervening events perceived value improvements are larger than traditional methods indicate we cannot reject the hypothesis that bidders on average pay fair prices combined bidder target stock returns are higher for hostile offers lower for equity offers and lower for diversifying offers these effects reflect revelation about bidder stand alone value not differences in gains from combination

national culture transaction costs and the choice between joint venture and wholly owned subsidiary transaction cost theory posits that culture plays a limited role in the choice between jv and wos in contrast research suggests that firms preferred level of ownership in their foreign subsidiaries is influenced primarily by cultural traits this study provides additional evidence in this ongoing debate by replicating hennart s transaction cost model of entry mode choice in two different national contexts japanese firms investing in the u s and the u s firms investing in japan the results suggest that the transaction cost explanation for the ownership choice holds in the both national contexts yet the propensity to choose jv or wos significantly varied between japanese and the u s firms

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

the effects of recent terrorist attacks on risk and return in commodity markets abstract the event study methodology of brown and warner 1985 is adopted and augmented to evaluate the effect of the recent terrorist attacks on risk and returns in commodity markets the methodology is supplemented with various techniques such as the non parametric ranking test and kernel regression to find out if 20 terrorist attacks including in paris nice brussels stockholm manchester jakarta london and melbourne generated abnormal returns asset pricing models are fitted with interaction variables while garch tarch egarch and parch models are used to determine changes in systematic risk our results show abnormal returns and delayed reactions of up to 120 days in the commodity markets evidence which defies the efficient market hypothesis in addition we identify sector and commodity effects in risk analysis

the gains to bidding firms from merger abstract this study examines the effect of mergers on the wealth of bidding firms shareholders bidding firms gain significantly during the twenty one days leading to the announcement of each of their first four merger bids these results fail to support the capitalization hypothesis that bidders gains are captured at the beginning of merger programs bidders abnormal returns are positively related to the relative size of the merger partners and the gains during the announcement period are larger for mergers which are successful though the gains are larger prior to 1969 merger bids after 1969 also significantly increase the wealth of bidding firms shareholders the results suggest that the inconclusive findings of the earlier studies may be due to methodological deficiencies the findings of this study are consistent with value maximizing behavior by the management of bidding firms

anticipation acquisitions and bidder returns industry shocks and the transfer of information across rivals we document market anticipation of merger bids and show that less anticipated bids earn significantly higher announcement returns subsequent bidders in the industry experience significant and positive abnormal returns around the time of initial industry bid announcements these results suggest that announcement period returns underestimate the wealth effects of bidding after accounting for anticipation bidding activity is on average a significant wealth creating event moreover bidders pursuing public targets increase shareholder wealth and bidders in stock swaps do not lose these results contradict conventional wisdom our results shed light on the correct magnitude of acquisition returns and on the transfer of information throughout an industry around the time of an economic shock the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

global cities and multinational enterprise location strategy we combine the concept of location derived by economic geographers with theories of the multinational enterprise mne and the liability of foreignness developed by international business scholars to examine the factors that propel mnes toward or away from global cities we argue that three distinctive characteristics of global cities global interconnectedness cosmopolitanism and abundance of advanced producer services help mnes overcome the costs of doing business abroad and we identify the contingencies under which these characteristics combine with firm attributes to exert their strongest influence consistent with these arguments our analysis of a large sample of mne location decisions using a multilevel multinomial model suggests not only that mnes have a strong propensity to locate within global cities but also that these choices are associated with a nuanced interplay of firm and subsidiary level factors including investment motives proprietary capabilities and business strategy our study provides important insights for international business scholars by shedding new light on mne location choices and also contributes to our understanding of economic geography by examining the heterogeneous strategies and capabilities of mnes the primary agents of economic globalization that shape the nature of global cities

yes we really do need more entry mode studies a commentary on shaver in a recent commentary published in this journal shaver raises the provocative question of whether we need more entry mode studies after assessing the reasons for shaver s doubts and further developing his broad research suggestions we conclude that this question should be answered affirmatively we derive three important questions for future entry mode research 1 what determines the evolution of operations resulting from suboptimal mode choices 2 what causes the replication of past mode choices 3 how is the entry decision process structured focusing on these questions should assure a bright future for entry mode research

institutional cultural and transaction cost influences on entry mode choice and performance in this study we examine foreign market entry mode choice and firm performance for a sample of european union firms examining both financial and non financial performance measures we attempt to determine if firms that select their entry mode based on transaction cost institutional context and cultural context variables perform better than firms that make other mode choices we found that mode choice did matter firms whose mode choice could be predicted by the extended transaction cost model performed significantly better on both financial and non financial measures than did firms whose mode choice could not be predicted by the extended transaction cost model implications for future research are discussed

portfolio choices and asset prices the comparative statics of ambiguity aversion we investigate the comparative statics of more ambiguity aversion as defined by klibanoff marinacci and mukerji 2005 in the context of the static two asset portfolio problem it is not true in general that more ambiguity aversion reduces the demand for the uncertain asset we exhibit some sufficient conditions to guarantee that ceteris paribus an increase in ambiguity aversion reduces the demand for the ambiguous asset and raises the equity premium for example this is the case when the set of plausible distributions of returns can be ranked according to the monotone likelihood ratio order we also show how ambiguity aversion distorts the price kernel in the alternative portfolio problem with complete markets for contingent claims

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency