Land Rent,Ethics, and Capitalism's Gestation Crisis:

Abstract As population increases land rises in value and this causes greater and greater payments to land owners without any contribution to production by them. This wrongly deprives producers of increasing amounts of income that they produced and are entitled to. As the process proceeds, it threatens the viability of capitalism itself as it lowers profits for the prime movers in the economic system. Home ownership in the US is becoming increasingly difficult for young people as the price of land keeps rising. Economic progress has been very fast in countries that tax land and seek its equitable distribution and is lagging in those that do not. The high unemployment rates in Europe are related to this unfair distribution of income.     

The Economic Significance of the Cross-Sectional Autoregressive Model: Further Analysis

We reexamine whether investors can gain abnormal returns using the cross-sectional autoregressive model of stock returns. We find that the pattern of abnormal returns obtained is inconsistent over the time period 1934–94. We adjust for the higher commission costs in the pre-May 1 1975 period, a point overlooked in Jegadeesh (1990), by assuming a conservative one-way transaction cost of 0.75%. For the post-May 1 1975 period, we use a one-way transaction cost of 0.25%. The results show that investors who invest only on the long side would earn insignificant 'after-transaction cost' abnormal returns in the post-World War II period, 1946–94. The 'after-transaction cost' abnormal return from the short strategy is about 0.5% for the period 1946–94. This article shows that an investor would not earn abnormal returns using this model considering that it is more costly in practice to sell securities short and that most investors would not earn interest on short sale proceeds.     

The Estimation of Systematic Risk under Differentiated Risk Aversion: A Mean-Extended Gini Approach

This paper examines a mean-Gini model of systematic risk estimation that resolves some econometric problems with mean-variance beta estimation and allows for heterogeneous risk aversion across investors. Using the mean-extended Gini (MEG) model, we estimate systematic risks for different degrees of risk aversion. MEG betas are shown to be instrumental variable estimators that provide econometric solutions to biases generated by the estimation of mean-variance (MV) betas. When security returns are not normally distributed, MEG betas are proved to differ from MV betas. We design an econometric test that assesses whether these differences are significant. As an application using daily returns, we estimate MEG and MV betas for U.S. securities.     

Liquidity,the Value of the Firm,and Corporate Finance

The theory of corporate finance has been based on the idea that a company's market value is determined mainly by just two variables: the company's expected after‐tax operating cash flows or earnings, and the risk associated with producing them. The authors argue that there is another important factor affecting a company's value: the liquidity of its own securities, debt as well as equity. The paper supports this argument by reviewing the large and growing body of evidence showing that differences—and changes—in liquidity can have major effects on the pricing of corporate stocks and bonds or, equivalently, on investors' required returns for holding them. The authors also suggest that the liquidity of a company's securities can be managed by corporate policies and actions. For those companies whose value is likely to be increased by having more liquid securities—which is by no means true of all companies (mature firms that don't need outside capital may well benefit from having more concentrated ownership and hence less liquidity)—management should consider actions such as reducing leverage and substituting dividends for stock repurchases as well as measures designed to increase the effectiveness of their disclosure and investor relations program and the size of their investor base.     

Maize and the Free Trade Agreement between Mexico and the United States

Setting the price of maize in rural Mexico above the world priceis inefficient and likely to have negative distributional effectsbecause many subsistence producers, and all landless workers,are net buyers; in fact it screens out the relatively poor ratherthan the relatively rich. The policy objective, therefore, shouldbe to move toward free trade. This would yield large gains inefficiency. The Free Trade Agreement provides an ideal opportunity to pursuethis objective. It will provide freer entrance into the UnitedStates for other agricultural products as well as a broad rangeof manufactured products. Insuring secure and sustained accessfor labor-intensive agricultural and manufactured products canhelp ease the impact on the labor market of a transition awayfrom subsistence maize cultivation.     

Sociocultural Integration in Mergers and Acquisitions: Unresolved Paradoxes and Directions for Future Research

Despite decades of research, the key factors for success in mergers and acquisitions (M&As) and the reasons why M&As often fail remain poorly understood. While attempts to explain M&A success and failure have traditionally focused on strategic and financial factors, an emergent field of inquiry has been directed at the sociocultural and human resources issues involved in the integration of acquired or merging firms. This research has sought to explain M&A performance and underperformance in terms of the impact that variables such as cultural fit, management style similarity, the pattern of dominance between merging firms, the acquirer's degree of cultural tolerance, and the social climate surrounding a takeover have on the postmerger integration process. In this article, we attempt to take stock of, and synthesize, the findings from research on sociocultural and human resources integration in M&A, to identify conflicting perspectives and unresolved questions as well as several underresearched areas, and then use our analyses to propose an agenda for the next stage of research in this field. © 2013 Wiley Periodicals, Inc.