Going public: The impact of insiders' holdings on the price of initial public offerings

Many entrepreneurs dream of seeing their company's securities trading in the public marketplace. Although going public has many benefits for a firm's founders and insiders, the process is often confusing and intimidating. One of the questions that investment bankers are asked frequently by insiders is, “What determines the price of a stock in the initial public offering?” This article presents empirical evidence that the stock price in an initial public offering (IPO) is directly related to the percentage of the firm's equity retained by the insiders. In other words, the offering price is relatively high when it appears that the insiders are not “bailing out” when the firm goes public.This research investigates equity ownership structure as a determinant of the pricing of IPOs. The hypothesis to be tested is: IPOs with higher (lower) insider holdings at the time of the offering are priced higher (lower) as a result of lower (higher) required rates of return. Support for the hypothesis is based on agency theory, which postulates that additional risk is created when there is a perceived separation of ownership and control.There are several implications of this research. First, a greater appreciation of the sophistication of the IPO market with regard to the actions of the insiders should be gained. Second, the reader's knowledge of the activity and relative pricing of IPOs during the 1978–1985 time period should be enhanced. Third, insiders should realize that actions regarding their relative equity holdings at the time of the offering have an impact on the price of the offering. Finally, the reader should recognize that even in “hot markets” the actions of insiders at the time of an initial public offering regarding the sale of equity are monitored by the market.     

Drivers and barriers to environmental supply chain management practices: Lessons from the public and private sectors

This study explores the factors that drive or hinder organisations to implement green supply chain management initiatives. A literature review identifies the main categories of internal and external drivers of green supply chain management practices, including organisational factors, regulation, customers, competitors and society, but there is little indication of suppliers as drivers for green supply chain management. Internal barriers include cost and lack of legitimacy, whereas external barriers include regulation, poor supplier commitment and industry specific barriers. An explorative study is conducted based on interviews from seven different private and public sector organisations. Encouragingly, across the organisations, more drivers than barriers to environmental supply chain management are identified. Organisations seem to be more influenced by external rather than internal drivers. The barriers to environmental supply chain management experienced by organisations tend to be both internal and external.     

Reducing the ecological footprint of urban cars

This study develops the policy-making capabilities of the Ecological Footprint. The new capabilities we introduce in our Ecological Footprint model allow us to clarify policy options in the face of the increasing management complexity due to a more interconnected and uncertain world. We investigate the effectiveness of three illustrative policy options for reducing the Ecological Footprint of urban car transport: (1) improvements in efficiency/technology, (2) substitution with alternate fuel mixes, and (3) the reduction in demand by altering urban form. We investigate the success of policy options for a subnational case study jurisdiction in Australia, but in the uncertain global context. We use a resilience framework that considers critical social, economic, and environmental variables, multiple scales, and multiple possible futures. We find that delaying policy options to mitigate CO₂ emissions from the transport sector will increase the risks borne by society as a result of future global uncertainty, the uncertain timing of globally coordinated action on climate change and the timing of peak oil. We also find that the success of local policy is affected by the global future which prevails. The use of the Ecological Footprint allows policy to be informed by the consequences of both CO₂ emissions and increasing demand for land. The study provides a decision-making framework that allows local decision makers to make robust policy despite global uncertainty. This framework has wider applicability to other nations and/or subnational jurisdictions worldwide.     

Developing country product choice: Footwear in Ethiopia

Footwear manufacture offers opportunities for factor substitution both for the manufacture of given products and across products. This paper contains an inter-product comparison between six synthetic projects employing mixes of techniques previously identified as being least-cost for Ethiopian factor prices. The projects are designed to produce identical output volumes. It is argued that choices between projects to make products that are not perfect substitutes for each other should not be based on a single criterion such as present values or the sizes of the capital investments. Rather a range of criteria should be considered. A number of these are examined and a possible strategy for the Ethiopian footwear industry is suggested.     

The choice of technique in a batch production industry: Some lessons from a study of bolt and nut manufacture

In a batch industry the characteristics of an establishment's output (scale, batch size, product dimensions) are critical determinants of the least-cost technique. In bolt and nut manufacture the least-cost technique draws selectively on different technologies for different parts of the product mix. Sensitivity analysis suggests that factor prices alone are relatively unimportant in determining the least-cost solution. Three technologies widely used in engineering industries - machining, hot forging and cold forming - are considered at four scales of output for a specified product mix comprising bolts and nuts conforming to an international standard. (For each technology a range of different machines is included.)     

The choice of technology,economic efficiency and employment in developing countries

This paper comprises a bald presentation of some results of an enquiry into the choice of technology in the sugar and footwear indutries in Ethiopia and Ghana, and a bold examination of some implications of these results. The baldness can be justified by the need for brevity and the fact that more complete results, more fully described, will shortly be available; the boldness by the desire to focus attention on a number of issues which can stand airing in provocative form.The paper is organized in three parts. The first provides a brief theoretical introduction (to help fix ideas); the second describes the research and presents the results; and the third considers some equations raised by the findings.     

The Mediating Effects of Job Satisfaction and Organizational Commitment on Turnover Intention,in the Relationships Between Pay Satisfaction and Work–Family Conflict of Casino Employees

Pay satisfaction (PS) and work–family conflict (WFC) are increasingly important to researchers and organizational scholars. This study tests the influence between PS and WFC in relation to turnover intention (TI). Using regressions, this study found that job satisfaction and organizational commitment mediate the effects of PS and WFC on TI. The findings provide fresh insights linking the job factors and TI. Managers should understand the needs of their employees in order to retain them. The identified solutions could help reduce turnover rates.     

Economics of advertising: Emerging functions of Internet advertising

This paper intends to highlight the emerging force of the Internet as an advertising medium. The economic functions of Internet advertising are examined. Moreover, the paper aims to evaluate the relative impacts on optimal advertising models. Our discussion also includes analysis of associated price-cost margins with respect to optimal advertising budgets and strategic reactions. All in all, this paper should provide entrepreneurs with more crucial knowledge of advertising strategies offered by the new medium. Moreover, it will equip scientists and technologists with more insights into the economic aspects and strategic values of Internet advertising. This revised version was published online in August 2006 with corrections to the Cover Date.