Multiparty Competition, Founding Elections and Political Business Cycles in Africa

Political business cycle (PBC) theory and empirics typicallyassume that elections are competitive. Yet, as empirical workon PBCs turns increasingly to developing countries for evidence,this assumption becomes untenable. We propose and test two empiricalhypotheses regarding PBCs: first, we should only see cycleswhen elections involve multiparty competition; secondly, weshould see larger cycles in ‘founding’ elections.Using a new indicator of multiparty competition and macroeconomicdata from Africa, we find strong support for our first hypothesisand moderate support for the second. These findings have implicationsfor democratic transitions and the compatibility of economicand political reform in nascent democracies.     

Takeover Contests with Asymmetric Bidders

Target firms often face bidders that are not equally well informed,which reduces competition, because bidders with less informationfear the winner’s curse more. We analyze how targets shouldbe sold in this situation. We show that a sequential procedurecan extract the highest possible transaction price. The targetfirst offers an exclusive deal to a better-informed bidder,without considering a less well-informed bidder. If rejected,the target offers either an exclusive deal to the less well-informedbidder, or a modified first-price auction. Deal protection devicescan be used to enhance a target’s commitment to the procedure.(JEL G34, K22, D44)     

Deliberate learning in corporate acquisitions: post‐acquisition strategies and integration capability in U.S. bank mergers

This paper introduces a knowledge‐based view of corporate acquisitions and tests the post‐acquisition consequences on performance of integration decisions and capability‐building mechanisms. In our model, the acquiring firm decides both how much to integrate the acquired firm and the extent to which it replaces this firm's top management team. It can also learn to manage the post‐acquisition integration process by tacitly accumulating acquisition experience and explicitly codifying it in manuals, systems, and other acquisition‐specific tools. Using a sample of 228 acquisitions in the U.S. banking industry, we find that knowledge codification strongly and positively influences acquisition performance, while experience accumulation does not. Furthermore, increasing levels of post‐acquisition integration strengthen the positive effect of codification. Finally, the level of integration between the two merged firms significantly enhances performance, while replacing top managers in the acquired firm negatively impacts performance, all else being equal. Implications are drawn for both organizational learning theory and a knowledge‐based approach to corporate strategy research. Copyright © 2004 John Wiley & Sons, Ltd.     

Computer adoption and returns in transition

Across nine transition economies, it is the young, educated, English‐speaking workers with the best access to local telecommunications infrastructures who work with computers. These workers earn about 25 percent more than do workers of comparable observable skills who do not use computers. Controlling for likely simultaneity between computer use at work and labour market earnings makes the apparent returns to computer use disappear. These results are corroborated using Russian longitudinal data on earnings and computer use on the job. High costs of computer use in transition economies suppress wages that firms can pay to their workers who use computers.     

Real assets, financial assets, liquidity and the lemon problem

Return obtained by diversification is based on average quality. Similarly, under asymmetric information, the price at which an asset can be sold reflects the average quality of assets. Therefore, 4under some conditions, sale of an asset under asymmetric information is a useful alternative to diversification. This idea is developed with a model that incorporates a liquidity shock. One key result is that investment in real assets is higher under asymmetric information than under symmetric information. The model can explain why the ratio of real assets to financial assets is higher in emerging economies than in developed countries.     

Potential targets: An analysis of stock price reactions to acquisition program announcements

Stockholders of potential targets experience a statistically significant wealth gain of 0.59% over the 3-day window surrounding the acquisition program announcement. Potential targets are defined as those firms that subsequently receive bids. Using alternative definitions, such as a portfolio of all firms in the industry of the target or firms within the target industry with a higher probability of receiving a bid as predicted by a maximum likelihood logit model, yield qualitatively similar results. These findings suggest that events, such as program announcements, release significant merger related information well before a target is formally approached with implications for wealth effects at subsequent bids. As with normal targets, the likelihood of receiving a bid for targets that are part of a broad-based program of acquisitions increases in the level of agency problems, managerial inefficiency and in the proportion of tangible assets in the target.

TV viewing and physical activity: a segment analysis for social marketing

• Elevated television viewing and physical inactivity promote sedentary behavior, leading to obesity. Yet, modifying the behavior has received a limited academic investigation. Thus, the purpose of this exploratory study is to develop segments relating to such behavior, and propose TV viewing‐reduction and physical activity‐enhancing strategies for the various segments.
• Using data from a mall, the multiple regression and analysis of variance (ANOVA) led to the identification of four segments: alert, inactive, action, and ideal. Results indicate that those engaged in physical activity appear to watch less TV, and that age and gender do not have a significant impact on TV viewing. The managers can use the findings, segments, and strategies to create appeals for target social marketing.

Copyright © 2007 John Wiley & Sons, Ltd.     

Cross‐Section of Expected Returns and Extreme Returns: The Role of Investor Attention and Risk Preferences

Previous work finds a negative and significant relation between the maximum daily return over the past one month and expected future stock returns. We determine that this effect is more pronounced for stocks that achieve their maximum daily returns toward the end of the month and stocks that are associated with capital losses show greater reversals. These results suggest the effect is related to investor attention and risk preferences.     

Confidence Distribution,the Frequentist Distribution Estimator of a Parameter: A Review

In frequentist inference, we commonly use a single point (point estimator) or an interval (confidence interval/“interval estimator”) to estimate a parameter of interest. A very simple question is: Can we also use a distribution function (“distribution estimator”) to estimate a parameter of interest in frequentist inference in the style of a Bayesian posterior? The answer is affirmative, and confidence distribution is a natural choice of such a “distribution estimator”. The concept of a confidence distribution has a long history, and its interpretation has long been fused with fiducial inference. Historically, it has been misconstrued as a fiducial concept, and has not been fully developed in the frequentist framework. In recent years, confidence distribution has attracted a surge of renewed attention, and several developments have highlighted its promising potential as an effective inferential tool. This article reviews recent developments of confidence distributions, along with a modern definition and interpretation of the concept. It includes distributional inference based on confidence distributions and its extensions, optimality issues and their applications. Based on the new developments, the concept of a confidence distribution subsumes and unifies a wide range of examples, from regular parametric (fiducial distribution) examples to bootstrap distributions, significance (p‐value) functions, normalized likelihood functions, and, in some cases, Bayesian priors and posteriors. The discussion is entirely within the school of frequentist inference, with emphasis on applications providing useful statistical inference tools for problems where frequentist methods with good properties were previously unavailable or could not be easily obtained. Although it also draws attention to some of the differences and similarities among frequentist, fiducial and Bayesian approaches, the review is not intended to re‐open the philosophical debate that has lasted more than two hundred years. On the contrary, it is hoped that the article will help bridge the gaps between these different statistical procedures.     

Refining teaching and assessment methods in fulfilling the needs of employment: A Malaysian perspective

Institutions of Higher Education (HEIs) play a pivotal role in advancing the type of knowledge that can spur the economic growth of a nation. The last 30 years or so have witnessed an ever-widening gap between the nature of teaching and learning in HEIs and ways of obtaining and disseminating knowledge within the society at large, which has contributed to a recalibration of pedagogy and assessment to the needs of employment in Malaysia. The reality in most public universities in Malaysia today is that the inordinate emphasis on research and rankings has, not surprisingly, impacted on teaching and its related activities. With this in mind, this paper addresses the pedagogical issues related to teaching, learning, and assessment in higher education institutions in Malaysia and their probable relationship with employment.