AN EMPIRICAL TEST OF AN EX-ANTE MODEL OF THE DETERMINATION OF STOCK RETURN VOLATILITY

The assumption that changing expected cash flows and discount factors affect a security's return is at the foundation of many financial models. This study examines empirically the hypothesis that expected stock return variability is a function of cash flow and discount rate uncertainty. Maximum likelihood estimation techniques and expectational data are employed. Strong, positive relationships are found, verifying the foundations of the ex-ante models with ex-ante data and providing a better understanding of security markets by explaining, in part, the causes of expected stock price variability.     

AN EXAMINATION OF MERGER SYNERGISM

The empirical research discussed in this paper measures the synergistic effects of mergers on the stockholders of the acquiring and acquired firms. Synergism is defined as the incremental wealth to the shareholders of both merging firms due to the merger—net of any potential gains achievable through investors' personal diversification over the common stocks of the merging firms. Three types of mergers are identified and studied—nonconglomerate, conglomerate with increasing financial leverage, and conglomerate with decreasing financial leverage. The results indicate that these types of mergers are affected differently by the combination. Moreover, the evidence suggests operational and/or financial synergism.     

PAPER PROPHETS: AN AUTOCRITIQUE

With the hindsight of some 15 years scholarship, we can now discern some sizeable flaws in the flow of argument in Paper Prophets. On the face of it, the main problem is to do with a disjuncture between, on one hand, the series of cases studies presented at the outset and, on the other, the subsequent analysis of these cases. The problem is noteworthy because it has recurred on numerous occasions, in various literatures especially where case and ethnographic investigations have been involved. The problem is, in essence, about how researchers should ‘frame’ or construct case material in a manner that is both faithful to the case evidence (including the actor’s understanding of affairs) and the researcher’s own interests in the investigation. This problem pre-dates contemporary ethnographic, management, and accounting research; it is at the core of Marx’s revision of Hegel’s dialectical method. This paper redresses the deficiency with a four-stage approach to dialectical research that is derived from the works of Marx and Hegel. The first stage involves acknowledging the particular research interest of studies like Paper Prophets that focus on problems emanating from the instabilities of capitalism, and that these instabilities are embodied in commodity form itself. The second stage involves identifying the ‘self-activating mechanisms’ (or internal relations) that are integral to the empirical phenomena. The Third phase involves appropriating the evidence; an effort distinguished from other forms of empiricism by its pursuit of a ‘realism in process’. The final phase involves reconstructing evidence in a way that elucidates the political possibilities associated with the ‘self-activating’ mechanisms of material processes; that is, rendering these mechanisms political intelligible.     

THE EMERGENCE OF AN OFFSHORE ECONOMY

There has been growing interest over the past few years in the changing political structure of the world. Predictions range from the withering away of the state to the advent of a global state. This article proposes an alternative scenario: that the state system is not disappearing, but is in the process of creating secondary, relatively unregulated juridical spaces in which economic activities can develop more or less without hindrance. This secondary space, known as `offshore', already dominates international finance and shipping, and plays a significant role in international trade and telecommunications. Offshore is a barrier to the extension of those social provisions that were traditionally provided by states. This paper offers an insight into the ways by which increasing integration of the global market is supported and facilitated by the state system.     

ACCOUNTING REGULATION: AN ALTERNATIVE PERSPECTIVE

This paper analyses the debate over accounting regulation. Accepting the need for regulation, it first rejects the view of accounts as maps before going on question the conventional wisdom that the incompatibility of "interests" means that lack of agreement on standards is inevitable. It argues that conflicts over accounting standards are the result of clashes of worldview rather than interest, and provides evidence of this by analysing the debate over three contentious standards. The conclusion is that an agreed conceptual framework is feasible, although not on the basis currently envisaged.     

AN EMPIRICAL INVESTIGATION OF STOCK DIVIDENDS-IN-KIND

We investigate share price reactions to announcements of dividends payable in the common stock of corporations different from the issuing firm. We find that firms that declare these dividends (typically investment companies) experience positive abnormal returns upon announcement. We also find that such dividends are more likely to be declared when the shares to be distributed have peaked in value. Consistent with this finding, we document negative announcement-period abnormal returns for firms having their shares distributed. Additional tests reveal that prices respond more negatively when the information signal is strongest, when outside ownership is more dispersed, and when management is more entrenched.