What Role Taxes and Regulation? A Second Look at Open Market Share Buyback Activity in the UK

This paper re-examines the evidence on open market share repurchase activity reported by Rau and Vermaelen (2002) for the UK. Using data from the Securities Data Corporation (SDC), Rau and Vermaelen conclude that the level of repurchase activity is trivial. They attribute the low repurchase volume to regulatory restrictions that limit companies' ability to take advantage of an undervalued stock price and conclude that the bulk of repurchase activity that does occur is driven by the desire to generate tax credits for pension funds. Using data collected from a variety of sources, we find that the SDC substantially understates UK open market buyback activity. Based on our more comprehensive dataset we conclude that (a) pension funds' tax considerations are not the primary cause of UK share repurchases and (b) despite the prevailing regulatory environment, underpricing still represents an important determinant of repurchase activity.     

How to measure mutual fund performance: economic versus statistical relevance

In the present paper a comprehensive assessment of existing mutual fund performance models is presented. Using a survivor‐bias free database of all US mutual funds, we explore the added value of introducing extra variables such as size, book‐to‐market, momentum and a bond index. In addition to that we evaluate the use of introducing time‐variation in betas and alpha. The search for the most suitable model to measure mutual fund performance will be addressed along two lines. First, we are interested in the statistical significance of adding more factors to the single factor model. Second, we focus on the economic importance of more elaborate model specifications. The added value of the present study lies both in the step‐wise process of identifying relevant factors, and the use of a rich US mutual fund database that was recently released by the Center for Research in Security Prices.     

EDUCATION AND MODERNITY

Modernity is the combination of capitalism and democracy. Its economic core is based on property rights, which mobilise the organisation of resources. It also requires mass education to select intellectual talent for a complex division of labour. Western education paradoxically lacks developed property rights and a class of owners who seek profits through the satisfaction of consumer (educational) demand. Most of the intellectual ills in our society reflect this absence of modernity in our educational arrangements.     

Umpire and batsman: Is it cricket to be both?

The paper is a response to Richard De George's essay, Theological Ethics and Business Ethics. It defends the possibility of theologically oriented approaches to business ethics by pointing out certain deficiencies in business ethics narrowly based on the premisses of analytic moral philosophy. In particular it argues, in a manner consistent with Alasdair MacIntyre's After Virtue (1981), that such a program of business ethics is insufficiently critical of its own roots in the social fiction of bureaucratic rationality. After showing how this ideology governs De George's negative judgments on theological approaches to business ethics, the author outlines a program of critical reflection that would draw from the intellectual traditions of both theology and philosophy in order to facilitate a dialogue in business ethics that no longer is captive in the Iron Cage of bureaucratic rationality. Dennis P. McCann is an Associate Professor of Religious Studies at De Paul University. He has served on the faculties of Reed College and Lewis and Clark College. He is the author of Christian Realism and Liberation Theology (1981) and a co-author of Polity and Praxis: A Program for American Practical Theology (1985).