Dividend Policy and Corporate Performance

Substantial research has been conducted to determine the signal that results from dividend initiations and omissions. Our study extends from previous research by measuring the long-term valuation effects following dividend initiations and omissions. We find that firms initiating dividends experience favorable long-term share price performance. Conversely, firms omitting dividends experience unfavorable long-term share price performance. The long-term valuation effects resulting from dividend initiations are more favorable for firms that are smaller, that overinvest, and that had relatively poor performance prior to the initiations. The long-term effects resulting from dividend omissions are more unfavorable for large firms and for firms experiencing relatively large dividend omissions.     

WEALTH EFFECTS FROM ACQUIRING FAILED THRIFTS SINCE FIRREA

This study investigates the market reaction to acquisitions of failed thrifts since the passage of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. The study also assesses the influence of various factors on the share price response across acquirers. In general, the market reaction to the acquisitions is negative. Cross-sectional regression analysis reveals that acquisitions are likely to be more beneficial when they reflect industry diversification, a higher degree of government assistance, and less intense bidding for failed target thrifts. Our findings differ from previous studies which have documented a favorable share price response to assisted aquisitions. Apparently, the change in the amount and type of government assistance in the post-FIRREA period has affected the market reaction. Since the Resolution Trust Corporation controls the government assistance and the intensity of bidding for failed thrifts, its actions have a significant impact on the share price response to acquisitions. The results of the analysis are relevant to potential acquirers of failed thrifts, regulatory agencies, and taxpayers.     

Market Signals Associated with REIT IPOs

Previous studies have found significant but time-varying valuation effects associated with real estate investment trusts initial public offerings (REIT IPOs). Because REIT IPOs may disclose relevant information about real estate market conditions, they may serve to revalue existing real estate securities. To determine whether REIT IPOs signal information that is impounded into the share prices of other real estate securities, we assess the returns on rival portfolios of existing real estate securities upon the issuance of the IPO. On average, the rival portfolios experience insignificant effects on the REIT IPO filing date, but negative and significant abnormal returns around the issue date. A cross-sectional analysis of combined effects at the time of the filing date and issue date shows that the negative effects on the rival portfolios are more pronounced when (1) the size of the REIT IPO is larger, (2) market conditions are relatively weak, (3) more REIT IPOs come to market, and (4) the IPO is not associated with an umbrella partnership REIT.     

Cultural Discrimination: The Reasonable Accommodation of Religion in the Workplace

Reasonable accommodation of religious practices continues to be a problem in the workplace. Recent Supreme Court decisions have enabled employers to exclude employees from the decision-making process of what constitutes a reasonable accommodation of their religious beliefs through the de minimis standard. In this article it is argued that, in most cases, the reason employers have been allowed to discriminate against these employees is the contentious nature of minority religious beliefs with the mainstream religious culture. Because judges view discrimination based on religious beliefs as distinct from the other reasons for discriminatory practices, such as race, sex, or national origin, it appears unlikely that adherents to minority faiths will face any abatement of discrimination in the workplace.     

CAREER CONCERNS: INCENTIVES AND ENDOGENOUS LEARNING IN LABOUR MARKETS

Abstract. Models of career concerns provide a framework for analysing the actions that may be taken by a manager in an attempt to influence performance signals that the market uses to update its beliefs on her productivity, and the incentive problem that arises if such actions do not coincide with those that maximise the financial return to a firm's owner. This survey provides a formal introduction to the main types of models of career concerns (hidden action and hidden information), and discusses some extensions of these models. Applications of the career concerns framework to explain aspects of managerial behaviour and the form of labour market institutions are emphasised.     

Motivation and Performance of Seasoned Offerings by Closed-End Funds

We examine the motivation and performance of closed‐end funds that engage in seasoned public or rights offerings. We find that closed‐end funds are more motivated to engage in seasoned offerings when their shares exhibit a relatively high premium (compared to their corresponding NAV) and have a high degree of liquidity. We also find a significant negative valuation effect on average in response to seasoned offerings by closed‐end funds. Our cross‐sectional analysis reveals that the valuation effect at the time of the seasoned offering is more unfavorable for funds that have relatively high expense ratios and are relatively large. Furthermore, we find that the closed‐end funds experience significant negative valuation effects over the three‐year period subsequent to the seasoned offering, implying poor post‐offering performance.