Common Stock Returns in Corporate Takeover Bids: The Case of Brokerage House Acquisitions

This paper examines the common stock returns of three groups of bidders that purchased brokerage houses. Only in the cases of horizontal mergers, one brokerage house purchasing another, are there abnormal returns associated with the purchase. Neither bank holding company bidders nor non-financial bidders gain significantly when purchasing a brokerage house. Bank holding company bidders face considerable regulatory delays, and these economic disturbances may eliminate their gains. Bank holding company expansion into these non-bank activities does not appear, at the time of announcement, to either hurt or benefit them; hence, this expansion does not appear to further the loss exposure of the Federal Deposit Insurance Corporation.     

EFFECTS OF SMALL BUSINESS ACCOUNTING BASES AND ACCOUNTANT SERVICE LEVELS ON LOAN OFFICER DECISIONS

This study examines effects of four combinations of accounting bases and service levels — GAAP and income tax bases, and audit and review service levels — on loan officers' decisions, both separately and in interaction. It examines effects on loan decisions and perceptions of interest rates, default risk, confidence, and usefulness. The interaction of accounting basis and service level significantly affects perceived confidence but does not affect other decisions. Accounting basis and service level separately affect interest rates, default risk, and report usefulness, but do not affect the loan decision.     

External Monitoring of Property Appraisal Estimates and Information Asymmetry

Finance theory proposes that firms' cost of capital increases when market makers set wider spreads due to perceived higher information asymmetry across traders. Using a sample of UK investment property firms and controlling for firms' non-random selection of external monitors, we find evidence that market makers perceive information asymmetry across traders to be lower for firms employing external appraisers versus those employing internal appraisers. This evidence is consistent with liquidity-motivated traders being unable to overcome such reliability differences using asset value information from sources other than accounting. We fail to find a similar difference for firms employing Big 6 versus non-Big 6 auditors. Our findings contribute to the debate over the recognition of fair value estimates for long-lived tangible assets by documenting that reliability differences attributable to differential monitoring by appraisers can affect information asymmetry, and therefore firms' cost of capital.     

Sickness Presenteeism, Sickness Absenteeism, and Health Following Restructuring in a Public Service Organization

abstract    This study examined the relationship between sickness presenteeism, sickness absenteeism, organizational outcomes and employee health. In particular, we wanted to investigate to what degree employees were substituting sickness presence for sickness absence. Three hypotheses were tested to formalize this 'substitution proposition'. We surveyed a Canadian public service organization which was involved in a large scale downsizing initiative. For this study, 237 Personnel Corporation (pseudonym used) employees responded to the survey, representing a 66 per cent response rate. Survey results indicated that, while the workforce was of average health, sickness absenteeism was less than half that of the national average. The difference could be accounted for by sickness presenteeism – the average number of days employees attended work while ill or injured was greater than the number of days of sickness absence. The pattern of results supported the notion that employees were substituting presenteeism for absenteeism. The frequency and type of self-reported health problems were highly similar for presenteeism and absenteeism. Work factors (e.g. job security, supervisor support and job satisfaction) tested were significantly correlated with presenteeism. Presenteeism appears to be a stronger predictor of health than absenteeism, suggesting that efforts to improve workplace health may have a more immediate impact on presenteeism than on absenteeism.     

Identity, identification, and relationship through social alliances

The authors studied social alliances, a type of corporate societal marketing initiative. Their research finds that social alliances are an important means whereby employees identify more closely with their organizations while gaining a greater sense of being whole, integrated persons. Furthermore, this integration allows both organizations and their members to align their commercial identities with their moral and social identities. As organizational members struggled to resolve conflicts within their own identities, they were aided by social alliances, which in turn led them to identify more with their organizations. Unlike previous research, the findings suggest that the kind of connections referred to by the informants went well beyond the cold, rational associations described in previous research to emotional attachments that appear to be critical to organizational identification. The results also suggest that participation in social alliances may result in multiple forms of identification: intra- and interorganiza-tion identification. Ida E. Berger (bergeri@ryerson.ca) is the associate director of faculty affairs and a professor of marketing in the School of Business Management at Ryerson University. She received her Ph.D. from the University of Toronto. Her articles have appeared in leading marketing journals, including theJournal of Consumer Research, Public Policy and Marketing, theJournal of Consumer Psychology, andCalifornia Management Review. Her current research interests include social alliances, voluntary and nonprofit sector studies, diversity, and the value of sports in social inclusion. Her teaching interests include marketing theory, consumer behavior, and marketing communications. Peggy H. Cunningham (pcunningham@business.queensu.ca) is the Marie Shantz Teaching Associate Professor of Marketing, School of Business, in the Queen’s University. She completed her Ph.D. at Texas A&M University. Dr. Cunningham’s research interests revolve around two related themes: marketing ethics and marketing partnerships (international strategic alliances, partnerships between for-profit and not-for-profit organizations, relationships between firms and their customers). These areas of study are linked by their focus on the concepts of trust, integrity, and commitment. She is the coauthor of the Canadian editions of a number of marketing textbooks (Marketing Management; Principles of Marketing; and Marketing: An Introduction). Her work is published in a number of journals, including theJournal of the Academy of Marketing Science, the Journal of International Marketing, and California Management Review. Minette E. Drumwright (mdrum@mail.utexas.edu) is an associate professor with a joint appointment in the College of Communication (Department of Advertising) and the College of Liberal Arts at The University of Texas at Austin. Previously, Dr. Drumwright was on the marketing faculties of Harvard Business School and the University of Texas Business School. She currently is the faculty chair of the Bridging Disciplines Program in Ethics and Leadership at the University of Texas. She has a Ph.D. in business administration (marketing) from the University of North Carolina at Chapel Hill. Dr. Drumwright’s current research is in the areas of corporate social responsibility, marketing for nonprofit organizations, and business ethics. Her focus is on understanding how managers and consumers integrate noneco-nomic criteria related to society into their decision making. Dr. Drumwright has studied noneconomic criteria in various contexts, including cause-related marketing, partnerships between companies and nonprofit organizations, socially responsible buying behavior, and corporate volunteerism. Her articles and cases have been published in various books and journals, includingCalifornia Management Review, theJournal of Advertising, and theJournal of Marketing.     

Embodied and Disembodied Technical Change in Fisheries: An Analysis of the Sète Trawl Fishery, 1985–1999

Overfishing and excess capacity in mostfisheries around the world have generated considerableand increasing concern about their biological and economic performance ramifications. Theseproblems, in part, stem from substantialinvestment in technical improvements to boats andequipment in fishing fleets, which exacerbatesexcess fishing capacity and low returns tofishing effort and investment, given regulatoryand biological constraints. However, little attempt hasbeen made to quantify the extent or effects oftechnical change in fisheries. In this paper, we usedetailed data on innovation patterns for 19vessels in the Sète trawl fleet of southernFrance to evaluate the contributions oftechnical change to catch rates. We find thatembodied technical change enhanced productivity by approximately one percent per year between 1985 and 1999, but that external (disembodied) events counteractedthis trend, causing a net output decline ofabout three percent per year.     

A brief technology assessment of the Carbon Dioxide effect

Significant increases in atmospheric carbon dioxide are occuring as a result of fossil fuel combustion. More than a four-fold increase over preindustrial levels may occur by the year 2100. Heating of the atmosphere, changes in precipitation patterns and global storm paths, and other resulting effects are sure to cause significant social changes. This article is essentially a methodological case study demonstrating a useful but inexpensive type of technology assessment. It summarizes current research findings on “the CO₂ effect,” and presents hitherto unpublished findings that resulted from a brief but systems-oriented approach. These findings suggest that most published forecasts of phenomena associated with a CO₂ buildup may be systematically low because various positive feedback relationships are not reflected.