Merger negotiations and the toehold puzzle

The substantial control premium typically observed in corporate takeovers makes a compelling case for acquiring target shares (a toehold) in the market prior to launching a bid. Moreover, auction theory suggests that toehold bidding may yield a competitive advantage over rival bidders. Nevertheless, with a sample exceeding 10,000 initial control bids for US public targets, we show that toehold bidding has declined steadily since the early 1980s and is now surprisingly rare. At the same time, the average toehold is large when it occurs (20%), and toeholds are the norm in hostile bids. To explain these puzzling observations, we develop and test a two-stage takeover model where attempted merger negotiations are followed by open auction. With optimal bidding, a toehold imposes a cost on target management, causing some targets to (rationally) reject merger negotiations. Optimal toeholds are therefore either zero (to avoid rejection costs) or greater than a threshold (so that toehold benefits offset rejection costs). The toehold threshold estimate averages 9% across initial bidders, reflecting in part the bidder's opportunity loss of a merger termination agreement. In the presence of market liquidity costs, a threshold of this size may well induce a broad range of bidders to select zero toehold. As predicted, the probability of toehold bidding decreases, and the toehold size increases, with the threshold estimate. The model also predicts a relatively high frequency of toehold bidding in hostile bids, as observed. Overall, our test results are consistent with rational bidder behavior with respect to the toehold decision.     

Organisational Control and the Self: Critiques and Normative Expectations

This article explores the normative assumptions about the self that are implicitly and explicitly embedded in critiques of organisational control. Two problematic aspects of control are examined – the capacity of some organisations to produce unquestioning commitment, and the elicitation of ‹false’ selves. Drawing on the work of Rom Harré, and some examples of organisational-self processes gone awry, I investigate the dynamics involved and how they violate the normative expectations that we hold regarding the self, particularly its moral autonomy and authenticity. The article concludes by arguing that, despite post-structuralist challenges, some notion of a ‹core’ or ‹real’ self still holds salience for employees negotiating their identities within regimes of control. The assumptions and expectations surrounding this aspect of self are also a pivotal element in the western intellectual tradition that promotes and enables critique.     

International trade,integration and industrial location: The case of Germany

The paper confronts empirical results on the spatial distribution of integration effects and export activities in the FRG with prediction based on different theoretical approaches. It is proved that integration has at most very slightly favoured the higher agglomerated regions, and has not been to the detriment of the periphery. Export activities contributed to regional industrial despecialization and to decreasing interregional disparities. Population potentials, calculated with different distance parameters, regional productivity, the sectoral composition of industry, and average firm size are tested as explanatory variables. The results question that there are contemporary effective ‘regional’ determinants of integration effects.     

Rezensionen

Ohne Zusammenfassung     

Meeting planners’ use and evaluation of convention and visitor bureaus

The MICE industry represents one of the fastest growing segments of the tourism industry. Yet, it is only in recent years that the economic contribution of this industry segment has been recognized and the relationships among the various industry players have been examined in more depth. This study focuses on the relationship between meeting planners and convention and visitor bureaus (CVBs). Results of the study indicate that association meeting planners utilize CVBs more frequently than corporate planners. Meeting planners mainly use free rather than fee-based CVB services, with destination information and referral services being the most popular. The desire to deal directly with suppliers represents the major reason for meeting planners bypassing CVBs in their convention/meeting planning. Implications of the study results are discussed.     

Doing femininity and respectability: social networks and social capital among female members of Dutch student organisations

This research explores the complexities that underlie the formation of women’s social networks at traditional social student organisations in the Netherlands, advancing theory on the intersectionality of gender and class in leisure space. Building on Pierre Bourdieu’s theory of social capital it investigates if these social networks are segregated, and to what extent their divisions depend on previously acquired economic, cultural and symbolic capital. It analyses the hierarchical structures and ‘ranking’ of women’s year clubs within student organisations, and examines how the enactment and achievement of femininity determines women’s ability to move through social space. Finally, it investigates the use of social capital for women’s career progression. Semi-structured interviews were held with 20 women who were current or former members of one of the most traditional Dutch student organisations, the corps. Their accounts were used to gather information about the meaning women gave to their membership, and shed light on the role of previously acquired capital in the formation of clubs. Our findings show that women’s previously acquired social capital allowed them easier access to corps’ space and advanced their ability to navigate it. The establishment and ranking of year clubs and their members demonstrate the power dynamics that operate within the corps and the way class underlines network formation. Femininity was deemed one of the important markers of respectability and the enactment and achievement of ‘proper’ femininity determined women’s recognition and position in corps space. Despite the hierarchies of placement in the corps, most women profit from the social capital they acquired during membership, and can use it in selective ways for career progression and acquisitions.     

The selection of migrants and returnees in Romania

This paper uses census and survey data to identify the wage earning ability and the selection of recent Romanian migrants and returnees on observable characteristics. We construct measures of selection across skill groups and estimate the average and the skill‐specific premium for migration and return for three typical destinations of Romanian migrants after 1990. Once we account for migration costs, we find evidence that the selection and sorting of migrants are driven by different returns to skills in countries of destination. Our identification strategy for the effects of work experience abroad permits a cautious causal interpretation of the premium to return migration. This premium increases with migrants' skills and drives the positive selection of returnees relative to non‐migrants. Based on the compatibility of the results with rationality in the migration decisions, we simulate a rational‐agent model of education, migration and return. Our results suggest that for a source country like Romania relatively high rates of temporary migration might have positive long‐run effects on average skills and wages.