ADVERTISING SUNK COSTS AND CREDIBLE SPATIAL PREEMPTION

Large sunk investments in advertising allow managers to credibly preempt potential entrants by introducing new products prior to anticipated increases in market growth. Previous investment in advertising can lower a firm's cost to introduce new products allowing it to credibly preempt potential entrants. Entrants may not have enough residual share to find it profitable to enter later, and incumbents find it profitable to keep new products in the market even if entrants choose to enter. I present empirical evidence from the RTE cereal industry.     

Toxic hazard reduction with passive mitigation systems

A major component of the United States Environmental Protection Agency's 112(r) Risk Management Program Rule is the evaluation and control of potential public exposures to toxic chemicals. The rule requires identification and evaluation of a worst case accidental toxic release scenario, but provides for the inclusion of passive mitigation systems in modeling the dispersion hazard zones that are to be communicated to the public. These passive mitigation systems can be taken into account in the consequence modeling if they will withstand the initiating event that causes the accidental release and function as intended. This paper discusses several passive mitigation systems that can be designed as an integral part of storage or processing of highly toxic chemicals. These include, but are not limited to, optimizing storage conditions, design of secondary containment, toxic vapor generation control, and enclosure design. The effectiveness of various passive mitigation systems is evaluated using consequence modeling for case studies involving highly toxic chemicals such as phosgene, chlorine, and ethylene oxide.     

ENVIRONMENTAL FINANCE: VALUE AND RISK IN AN AGE OF ECOLOGY

Environmental issues are restructuring markets and redirecting capital flows throughout the world. An outline is provided of concerns facing the development of an environmentally responsible or ‘environmental finance’ perspective. It reviews the major ways in which organizations are responding to environmental threats and opportunities in the three major branches of finance — corporate finance, investments and financial institutions — highlighting in particular novel programs and initiatives. In the past, financial concerns have exacerbated the degradation of the natural environment; in the future, they probably hold the key to their preservation.     

The differential impact on stockholder wealth of various antitakeover provisions

This paper examines the relationship between the passage of six types of corporate antitakeover provisions (supermajority, classified boards, fair-price, reduction in cumulative voting, anti-greenmail and poison pills) and stockholder wealth. Our event study from a sample of 381 firms that adopted 486 antitakeover provisions in the 1984 to 1988 period indicates a strongly negative effect on stockholder wealth, supporting the management entrenchment view of the antitakeover provisions. Moreover, the empirical results of this paper indicate that the market reacts equally negatively to both non-operating provisions that require stockholder approval and to operating provisions that do not require stockholder approval. However, separate analyses of the antitakeover provisions provide some support for the argument that stockholders discriminate between individual provisions.