Book Reviews

This study applies data envelopment analysis to evaluate the financial efficiency of a sample of 63 top US pharmaceutical advertisers, based on their sales and media advertising expenditures in 11 key media outlets (i.e. network TV, cable TV, syndicated TV, spot TV, magazines, Sunday magazines, national newspapers, newspapers, network radio, national spot radio, and outdoor). The analyses reveal that, on average, 35% of a pharmaceutical advertising budget is wasted, the largest portion of which is on network TV. In addition, the results of tobit regression indicate that magazines and Sunday magazines significantly contribute to the advertising inefficiency.     

Determinants of bond tender premiums and the percentage tendered

We analyze a large sample of US corporate bond tender offers to understand what affects tender premiums as well as the percentage of bonds tendered. For the average (median) tender offer, the tender price is 5.55% (3.24%) greater than the pre-tender market price while the percentage of bonds tendered is 82.3% (94.6%). Premiums offered by firms are greater when the firm is simultaneously soliciting consents to amend restrictive covenants and when the bond has a greater number of restrictive covenants. Premiums are also greater when long-term risk-free yields are low and the yield curve is flatter – conditions where a firm might want to lock in favorable long-term rates by issuing new debt and retiring old debt. Bondholders respond to higher tender premiums by tendering a greater percentage of their bonds – a 1% increase in tender premium increases the tendering rate by approximately 9%. Bondholders also tender a greater percentage of bonds possessing less desirable characteristics such as a short remaining maturity or bonds that are simultaneously undergoing consent solicitations. Finally, we find that tender offers are easier to complete when bond ownership concentration is greater.     

Utility maximizing portfolio insurance strategies when hedgers consider the impact of their trading on security prices

Portfolio insurance strategies can destabilize markets to such an extent that they may be counterproductive. Destabilization results when hedgers take share prices as given and follow exogenously specified price-based trading rules. We recognize that such trading rules may not be utility maximizing and that hedging affects share prices. Accordingly, we develop a portfolio insurance strategy where hedgers consider the impact of their trading on prices and endogenize their trading rule which is obtained by maximizing expected utility. Moreover, our strategy does not require the dissemination of information about the extent of portfolio-insurance based hedging activity in the economy.     

Detecting Deception: The Benefit of Looking at a Combination of Behavioral, Auditory and Speech Content Related Cues in a Systematic Manner

People communicate with each other across distance in a variety of ways, for example, via the telephone, via electronic forms of communication (the written word) or via videolinks. In this article, behavioral, auditory and speech content related cues which research has shown discriminate (to some extent) between liars and truth tellers will be discussed. Although research has indicated that people are generally poor at detecting deceit, some recent studies suggest that looking at nonverbal, auditory and speech content related responses in an objective and systematic manner will lead to more accurate classifications of liars and truth tellers. These studies will be discussed. Apart from examining the available cues objectively and systematically, lie detection might further improve if the lie detector employs certain communication techniques. In the final part of this article we will discuss some of these techniques.     

On Returning Inflation to Target

To gauge the breadth of current inflation and prospects for inflation returning to target, we consider disaggregated measures of CPI infl ation to evaluate trends and then consider diff erent scenarios for the realisation for wages and prices.

     

Unidimensional measurement and structural equation models with latent variables

This article considers various methods for constructing sets of multiple indicators that measures one and only one trait, i.e., unidimensional measurement. The article compares two procedures for constructing unidimensional measures: the modification index and tests designed specifically for assessing unidimensionality. The specific tests were shown to work better than the modification indices.     

Characteristics of Asian and white female business owners

Abstract The study was designed to compare the demographic profile, business characteristics and entrepreneurial profile of Asian and white women owning small businesses in the clothing sector in Manchester. Data were collected through personal interviews administered to a population of 60 women (30 Asian and 30 white). Results revealed that the Asian and white entrepreneurs differed significantly in their level of education, type of family and family size. The business characteristics assessed by the entrepreneurs themselves were similar. The majority of Asian entrepreneurs had prior experience of business ownership. In addition, these respondents mentioned a desire to earn more money as the primary reason for starting their venture, whereas the white entrepreneurs were motivated by the feeling of independence that they obtained through ownership. Only a few respondents had received any business-related training during the start-up phase. Personal savings and family contributions were most commonly cited as major capital sources used to start the business. The biggest problem for Asian respondents concerned the management of business, whereas for white women it was attracting customers. Our results raise broader concerns regarding the formulation and implementation of special policy measures designed to assist female business owners in the small-business sector.