bluuebunny/crossref_metadata_2025_split huggingface dataset:
Political events and the foreign direct investment decision: An empirical examination
Authors: Nigh Douglas 
Published: May 2007

AbstractThis study investigates the impact of political events on US manufacturing direct investment in Latin America. The relationship between foreign direct investment and political events (and economic factors) is examined through regression analysis of pooled time‐series (21 years) and cross‐sectional (8 countries) data. In contrast to previous studies using an econometric approach, this study finds that political events do affect direct investment decisions. Specifically, both intra‐nation and inter‐nation conflict and co‐operation have an impact on US direct investment decisions concerning Latin American countries. In addition, the host country's market size and market growth affect these decisions by US multinational firms.
Static profitability as a measure of deviations from the competitive norm
Authors: Slade Margaret E. 
Published: May 2007

AbstractRecently, several industrial‐organization economists have claimed that the rate of return on sales (II/S) is superior to the rate or return on assets (II/K) as a measure of monopoly power. This paper argues that there is no reason to prefer one index over the other. To make the point, an oligopoly model of optimizing agents is derived that yields II/K as a performance measure. The derivation leads to natural interpretations of the two indices and therefore to clarification of the circumstances under which each might be preferred.
Economies of scale and organization efficiency in banking
Authors: Todhanakasem Warapatr , Lynge Morgan J. , Primeaux Walter J. , Newbold Paul 
Published: May 2007

AbstractPrevious studies attempting to assess economies of scale in banking firms have largely relied upon cost functions. The profit‐function approach enjoys several important advantages over the cost‐function method, consequently that is the approach used in this study. A risk‐adjusted profit function estimates economies of scale of unit and branch banks; and the effects of bank holding‐company affiliation on the level of bank profits is also examined. The results indicate larger economies of scale for branch banks than for unit banks; and bank holding‐company affiliates were found to be more efficient than independent banks.
Political opinion polls and the stock market
Authors: Ioannidis C. , Thompson R. S. 
Published: May 2007

AbstractIt is a part of the received wisdom of the American and British stock exchanges that the market prefers a Conservative administration. However, attempts to test this proposition by examining market returns about the time of elections have produced contrasting and sometimes indecisive results. The present paper assumes that election outcomes will be largely anticipated by the market on the basis of published opinion forecasts. The paper examines the impact of opinion poll information on share prices over the period 1960–79—one largely characterized by two‐party competition. It is found that opinion movements towards the Conservative Party do exert a significant positive impact on the market, but only where the two main parties are relatively evenly balanced.
Misperceptions, moral hazard and incentives in groups
Authors: Gaynor Martin 
Published: May 2007

AbstractRecent work has shown that, in the presence of moral hazard, balanced‐budget Nash equilibria in groups are not Pareto‐optimal. This work shows that when agents misperceive the effects of their actions on the joint outcome there exist a set of sharing rules which balance the budget and lead to a Pareto‐optimal Nash equilibrium.
Methodology in International acquisitions: An exploratory study
Authors: Harris R. J. , Nicholis J. R. 
Published: May 2007

AbstractThere has been relatively little empirical research into international acquisition methodology; this article examines several strategy and methodology issues through an exploratory approach based mainly on seven detailed case studies of UK‐based companies. The research suggests, inter alia, that there has been greater concentration not only in terms of product categories but also in geographic markets, that the companies had well‐established acquisition and country screening criteria and that for important acquisitions there is concern to achieve a detailed ‘strategic fit’. The article concludes by making tentative recommendations for company management regarding acquisition analysis.
The economics of retail firms
Authors: Betancourt Roger , Gautschi David 
Published: May 2007

AbstractThis paper identifies retail firms as an economic institution which delivers explicit products or services to consumer together with a variety of distribution services that determine the levels of distribution costs experienced by consumers in their purchase activities. The demand for the retailer's product is derived from a household production model in which the levels of distribution services provided by the retailer play the role of fixed inputs in the household's production functions. The supply of the retailer's product is derived from a joint cost function which is non‐decreasing in the levels of distribution services provided. Profit‐maximizing behavior in monopolistically competive markets shows that retail firms have special economic incentives to become complex organizations by integrating backwards, offering multiple explicit products and operating in more than one market. In addition, monopolistically competitive retail firms in long‐run equilibrium will exhibit excess capacity, price dispersion and product choice in distribution services.
What can regulators regulate? The case of electric utility rates of return
Authors: Primeaux Walter J. 
Published: May 2007

AbstractThe efficacy of electric utility regulation has not been finally determined. This study assesses the impact of commission regulation on the level of earnings realized by electric power utility firms. Time series data for the individual electric firms operating in Florida, Iowa and Mississippi were used in this analysis. These are the only three states regulated since World War II and it was possible to compare profit rates for the individual firms before and after commission regulation was instituted. The results show that regulation has lowered profits in some cases. However, there appears to be significant randomness in the process.
Pharmaceutical innovation and R&D investment in the UK
Authors: Prentis Roger A. , Walker Stuart R. , Heard David D. , Tucker A. Martin 
Published: May 2007

AbstractExpenditure on research and development by the pharmaceutical industry in the UK has increased five‐fold in real terms since 1964, whilst the rate of introduction of novel medicines and their sales, allowing for inflation, have remained approximately constant. One of the reasons the industry has been able to afford the higher investment in R&D is because its marketing has become far more international. In the UK the average effective patent life of new products has decreased to less than 5 years at launch, making it difficult to see how development expenditure for most products can be recouped before patent expiry without significant international sales.
The ‘winner's curse’ hypothesis and corporate takeovers
Authors: Varaiya Nikhil P. 
Published: May 2007

AbstractThe winner's curse hypothesis states that, in any bidding situation, a party which unknowingly overestimates the value of a given object tends to bid higher than its competitors and is, therefore, more likely to win it. In a takeover the magnitude of the winner's curse is defined as the difference between the bid premium of the winning bidder and the maximum offerable premium conditional on the capital market's estimate of expected takeover gains. The magnitude of the winner's curse is predicted to increase with (1) increase in the divergence of opinion amongst acquirers with respect to the size of takeover gains, (2) increase in the degree of competition for control of the target firm and (3) increase in the pre‐acquisition profitability of the winning bidder. The empirical results provide support for the winner's course hypothesis.
Marketing new technology: Markets, hierarchies, and user‐initiated innovation
Authors: Foxall Gordon R. 
Published: May 2007

AbstractThis paper is concerned to further understanding of ‘user‐initiated innovation’ which occurs when a firm exploits economically a novel device which it has invented, either by investing in its internal application as a process innovation, benefiting from the consequent enhancement of its output, or by its general marketing and diffusion, gaining from additional income in the form of fees, royalties or profits. On the basis of empirical research, the paper discusses the factors which determine the functional locus of innovation as between users and manufacturers and the appropriate forms of governance structure for each observed mode of user‐initiated product innovation, drawing appropriate conclusions for the marketing of technology.
Using data envelopment analysis to measure the efficiency of not‐for‐profit organizations: A critical evaluation—comment
Authors: Ahn T. , Charnes A. , Cooper W. W. 
Published: May 2007

AbstractThis note responds to Nunamaker (1985) who supposedly deals with deficiencies in Data Envelopment Analysis (DEA) as an approach for (1) measuring efficiencies of not‐for‐profit entities identified as Decision Making Units (DMUs) and (2) locating sources and amounts of inefficiencies in each of the inputs used and in each of the outputs produced by each DMU. Corrections and comments are offered with references supplied for interested readers who wish to examine more detailed treatments of the topics covered.
Auditor changes, information quality and bankruptcy prediction
Authors: Kluger Brian D. , Shields David 
Published: May 2007

AbstractIn periods of financial distress management may attempt to suppress unfavorable information from creditors and investors through the use of undisclosed changes in accounting methods, estimates and procedures, thus reducing the quality of the information contained in the firm's financial statements. The auditor's role in this context is to ensure that such compromise does not take place. If the auditor does not permit such accounting treatments, the company may choose to switch to another auditor who will. Empirical evidence relating auditor‐change behavior to the quality of comparative bankruptcy prediction models provides support for the notion that auditor changes before bankruptcy may be at least partially due to lack of success at suppressing unfavorable information with the current auditor. Conversely, non‐auditor switching companies appear to enjoy greater success at suppressing negative income and leverage information.
Valuation effects of rollout publicly traded partnerships in the oil and gas industry
Authors: Martin John D. , Kensinger John W. 
Published: May 2007

AbstractIn trying to explain the often painful process of corporate restructuring, fingers are frequently pointed at inefficient management. This gives short shrift, however, to an important result of breaking up large, integrated corporations and selling them in smaller pieces: it makes the capital market more nearly complete, and there are strong theoretical arguments that this enhances value. We report the results of a natural experiment that occurred in the oil and gas industry, in which eleven integrated corporations formed publicly traded partnerships to hold their domestic production properties, yet (with few exceptions) retained most of the partnership units under corporate ownership. This behavior avoids any significant change in corporate governance, and is inconsistent with the tax motive popularly attributed as the reason for forming these partnerships; yet we find that significant positive abnormal returns accrued to stockholders when the formations were announced. The results we observe, therefore, support the theory that additional value can be realized by expanding the set of opportunities available to the investment community.
Corporate hedging under personal and corporate taxation
Authors: Kale Jayant R. , Noe Thomas H. 
Published: May 2007

AbstractResearchers have argued that financial distress costs and corporate tax shields can induce value‐maximizing corporations to hedge their operating cash flows. We demonstrate that, for a fixed level of debt in the capital structure, the presence of personal income taxation and corporate non‐debt tax shields may cause hedging to lower the value of the firm. When the hedging decision is evaluated at the optimal capital structure, hedging increases firm value.
Considerations for mathematical programming models in discriminant analysis
Authors: Koehler Gary J. 
Published: May 2007

AbstractThis paper surveys problems that may appear in mathematical programming formulations for linear discriminant analysis. For some, there are known solutions. Other problems have not been adequately addressed. Specific problems and considerations include the choice of objective, unacceptable or improper solutions, side constraints, data translation and transformations, unbounded solutions, inconsistencies, gaps, and the balancing of misclassifications. Subject areas: Linear discriminant analysis, statistical methods, linear programming.
Classification performance of mathematical programming techniques in discriminant analysis: Results for small and medium sample sizes
Authors: Stam Antonie , Jones Dennis G. 
Published: May 2007

AbstractThe performance on small and medium‐size samples of several techniques to solve the classification problem in discriminant analysis is investigated. The techniques considered are two widely used parametric statistical techniques (Fisher's linear discriminant function and Smith's quadratic function), and a class of recently proposed nonparametric estimation techniques based on mathematical programming (linear and mixed‐integer programming). A simulation study is performed, analyzing the relative performance of the above techniques in the two‐group case, for various small sample sizes, moderate group overlap and across six different data conditions. Training samples as well as validation samples are used to assess the classificatory performance of the techniques. The degree of group overlap and sample sizes selected for analysis in this paper are of interest in practice because they closely reflect conditions of many real data sets. The results of the experiment show that Smith's nonlinear quadratic function tends to be superior on the training samples and validation samples when the variances–covariances across groups are heterogeneous, while the mixed‐integer technique performs best on the training samples when the variances–covariances are equal, and on validation samples with equal variances and discrete uniform independent variables. The mixed‐integer technique and the quadratic discriminant function are also found to be more sensitive than the other techniques to the sample size, giving disproportionally inaccurate results on small samples.
Heuristic solution procedures for a mixed‐integer programming discriminant model
Authors: Rubin Paul A. 
Published: May 2007

AbstractMixed‐integer programming models for the two‐group discriminant problem appear to be more promising, in terms of accuracy, than are linear programming models, but at a substantial computational cost. This paper poses a particular mixed‐integer model and suggests heuristics, based on linear programming, for obtaining suboptimal but “good” solutions to it. The heuristics are compared to the mixed‐integer model using Monte Carlo simulation with Gaussian data.
Modeling the performance of US direct investment in Japan: Some empirical estimates
Authors: Nakamura Masao 
Published: May 2007

AbstractForeign firms' direct investments in Japan increased from about $930 million in 1984 to $2.2 billion in 1987, and are still increasing at a rapid rate. Most of these investments come from the United States and Europe. In this paper a short‐run model for the performance of a foreign parent firm's subsidiary in Japan is presented. The model is based on theories presented by Hymer, Caves, Buckley and Casson, among others, and consists of two equations: one for profitability and the other for growth. Duality is used to relate a parent firm's activities to its subsidiary firm's profitability. The model is estimated using data for US firms' subsidiaries in the Japanese chemical industry. We find that for jointly owned subsidiaries (joint ventures), imports from US parent firms and the R&D spending by both US and Japanese parent firms are major determinants of profitability and growth. US firms' fully owned subsidiaries, however, exhibit considerably different profit and growth behavior than their jointly owned counterparts. Because of the small sample sizes used, it is not possible to ascertain the sources of the observed differences.
Do norms of decision‐making styles, organizational design and management affect performance of Japanese firms? an exploratory study of medium and large firms
Authors: Shibata G. , Tse D. , Vertinsky I. , Wehrung D. 
Published: May 2007

AbstractThe success and resilience of Japanese firms have led many scholars and practitioners to theorize and speculate about the impact of what they have termed the 'Japanese management style' upon performance. There have been few studies that have attempted to explore empirically the links between the way Japanese firms organize, manage and decide, and their performance. This paper investigates the association between norms of decision‐making style, organizational design and management, and some measures of firm performance. The empirical pattern of norms was assessed on the basis of responses of a random sample (N= 349) of Japanese managers. The study demonstrates that while there appears to be no support for the proposition that certain norms universally affect performance, in some sectors the impacts of norms on decision‐making style, organizational design and management may be significant. The study concludes with the implications for theory building of this empirical exploration.
The theory of contracts and labor practices in Japan and the United States
Authors: Kanemoto Yoshitsugu , MacLeod W. Bentley 
Published: May 2007

AbstractLabor management practices in Japan are quite different from those in the United States. We begin with the assumption that markets are incomplete, and use recent developments in contract theory to develop a conceptual framework to understand why the differences have been maintained. Our basic message will be that the American and Japanese systems are examples of two different equilibria. The distinguishing feature of these two equilibria will be the extent to which exit is used as a method of contract enforcement. In the United States there is a greater tendency for the use of exit because active markets exist for senior workers. In contrast, there is virtually no market for mid‐career workers in Japan. We also discuss the implications of this fundamental difference for the structure of the internal and external labor markets.
Top executive pay and performance
Authors: Main Brian G. M. 
Published: May 2007

AbstractUsing data on 241 of Britain's largest industrial companies, the pay received by top executives in 1985 is studied as a function of corporate performance. An attempt is made to estimate the extent to which executive pay and shareholder wealth are linked. Rival explanations, relating pay to the assets, employment level and turnover of the company, are also examined. No support is found for the managerialist view that remuneration tends to be correlated with size attributes. The results do, however, suggest that, while much of the variation in executive pay remains unexplained, there is evidence of executive remuneration policy serving to effect incentive alignment between the executive's and shareholders' interests.
Abandoned mergers and the market for corporate control
Authors: Taffler Richard J. , Holl Peter 
Published: May 2007

AbstractThis paper investigates the financial performance cf a sample of UK firms involved in abandoned mergers during the period 1977–81. Predictions derived from a broadly neoclassical theory of merger activity are tested empirically and implications for the theory of the firm are discussed. Using an extension of discriminant analysis for firms in our samples we cannot find any evidence to suggest that the market for corporate control exercises discipline in completed mergers or in abandoned ones. In the latter case we suggest that the motives for takeovers tend to reflect managerial rather than shareholder interests.
The impact of the foreign corrupt practices act on us exports
Authors: Beck Paul J. , Maher Michael W. , Tschoegl Adrian E. 
Published: May 2007

AbstractIn 1977 the Foreign Corrupt Practices Act (FCPA) was enacted to penalize US firms and their employees for paying bribes to foreign government officials. If bribe payments influence the awarding of contracts and the FCPA regulation differentially affects US exporters compared to foreign competitors, then US exporters' bribe‐paying ability and market share would be expected to decline. This study provides empirical evidence that the FCPA had a negative effect on US exports to non‐Latin American countries but not to bribery prone ones in Latin America.
Price‐matching policies: An empirical case
Authors: Hess James D. , Gerstner Eitan 
Published: May 2007

AbstractPromises by retailers to match the prices of their competitors give an impression of fierce price competition. These policies, however, may deter rivals from cutting prices because the threat of price matching makes it more likely that market share will not be gained. This paper empirically tests these two conflicting theories using data collected from grocery stores in a market where several stores had announced that they would match the prices of the low‐price supermarket. The evidence supports the theory that price‐matching policies help supermarkets avoid price competition and therefore lead to generally higher prices.
The effects of mergers on price and output: Two case studies from the airline industry
Authors: Werden Gregory J. , Joskow Andrew S. , Johnson Richard L. 
Published: May 2007

AbstractThe literature on industrial organization contains very little direct evidence on the effects of actual mergers. This study estimates the effects of two recent airline mergers approved by the Department of Transportation over the objection of the Department of Justice. The merger of TWA and Ozark appears to have caused a slight increase in fares and a far greater reduction in service on city pairs out of St Louis. The merger of Northwest and Republic appears to have caused a significant increase in fares and a significant reduction in overall service on city pairs out of Minneapolis‐St Paul.
Accounting choice: The role of monitoring costs
Authors: Knoeber Charles R. , McKee A. James 
Published: May 2007

AbstractFocusing on monitoring costs, the agency framework is used to extend and test the positive theory of accounting choice. To reduce monitoring cost, a firm is predicted to adopt those accounting methods employed by other firms facing the most similar economic environment. This allows the firm's shareholders (typically acting through the Board of Directors) to use the performance of these other firms to better impute and reward its own manager's performance. This hypothesis is tested and supported by examining, for a sample of industrial firms, the choice of depreciation method.