The Case for Britain Joining the EMS

Nigel Healey, of Leeds Polytechnic, argues that Britain should join the Exchange Rate Mechanism of the European Monetary System. He claims that the EMS would provide an anchor for economic policy in the absence of effective targets for monetary growth.     

Partnership perspectives in tourism and recreational property development

Property development partnerships are increasingly being seen in the UK as a means of achieving tourism and recreational projects. This article briefly examines the nature of the relevant property development market; characteristics and attitudes of involved organisations; purposes, benefits and mechanics of partnerhsips (illustrated by two case studies); and future directions for partnerships. The issues and potential approaches identified are, to varying extents, of relevance to project implementation in developed and developing countries.     

Modelling multinational telecommunications demand with limited data

Forecasting the diffusion of innovations in the telecommunications sector is a constantly recurring problem for national providers. The problem is characterised by short data series making the estimation of model parameters unreliable. However, the same innovation will be diffusing simultaneously in other national markets, although with a different start date. The use of this cross-sectional data in constructing innovation diffusion models is investigated here. Four models for pooling the cross-sectional data are described and two diffusion models are discussed although only one, the Gompertz model is used throughout. Three innovation data sets are used in the evaluation of the models: digital cellular telephones, ISDN connections and fax connections. The pooled diffusion forecasts proved to be more accurate in several comparisons relative to a naïve benchmark and to individual forecasts when available.     

ISSUER SOPHISTICATION AND UNDERPRICING IN THE NEGOTIATED MUNICIPAL BOND MARKET

Research on municipal bond offerings has established the determinants of effective competitive bidding, but no comparable research has been undertaken for the negotiated method. This study examines the effect of issuer sophistication on the interest costs for a sample of negotiated issues. The first part of the paper reviews the theory relating issuer sophistication, negotiated issues, and underpricing. The second part presents statistical evidence supporting the theory that the net interest cost of a sample of negotiated issues declines as issuer sophistication increases.     

Venture-backed Private Equity Valuation and Financial Statement Information

The relationship between (a) private and public equity market valuations and (b) financial statement information is examined for a sample of 502 venture capital backed companies from six different industries over the 1993–2003 period. Financial statement information explains a sizable component of the levels of and changes in valuation in both the Pre-IPO and Post-IPO periods. The findings support prior research for Post-IPO companies that revenues are value enhancing and costs are value diminishing. For the Pre-IPO period, we find that cost of sales; sales, marketing, general and administrative; and research and development are value enhancing—even when revenues are included in the analysis. This is consistent with costs incurred by early-stage, venture-backed companies having a strong “investment aspect” as the companies build a platform/infrastructure to grow revenue and validate their business model(s). We document the growth of early stage companies for revenues and costs in both calendar time (by round of private equity financing) and event time (relative to their eventual IPO).