Merger negotiations and the toehold puzzle

The substantial control premium typically observed in corporate takeovers makes a compelling case for acquiring target shares (a toehold) in the market prior to launching a bid. Moreover, auction theory suggests that toehold bidding may yield a competitive advantage over rival bidders. Nevertheless, with a sample exceeding 10,000 initial control bids for US public targets, we show that toehold bidding has declined steadily since the early 1980s and is now surprisingly rare. At the same time, the average toehold is large when it occurs (20%), and toeholds are the norm in hostile bids. To explain these puzzling observations, we develop and test a two-stage takeover model where attempted merger negotiations are followed by open auction. With optimal bidding, a toehold imposes a cost on target management, causing some targets to (rationally) reject merger negotiations. Optimal toeholds are therefore either zero (to avoid rejection costs) or greater than a threshold (so that toehold benefits offset rejection costs). The toehold threshold estimate averages 9% across initial bidders, reflecting in part the bidder's opportunity loss of a merger termination agreement. In the presence of market liquidity costs, a threshold of this size may well induce a broad range of bidders to select zero toehold. As predicted, the probability of toehold bidding decreases, and the toehold size increases, with the threshold estimate. The model also predicts a relatively high frequency of toehold bidding in hostile bids, as observed. Overall, our test results are consistent with rational bidder behavior with respect to the toehold decision.     

Organisational Control and the Self: Critiques and Normative Expectations

This article explores the normative assumptions about the self that are implicitly and explicitly embedded in critiques of organisational control. Two problematic aspects of control are examined – the capacity of some organisations to produce unquestioning commitment, and the elicitation of ‹false’ selves. Drawing on the work of Rom Harré, and some examples of organisational-self processes gone awry, I investigate the dynamics involved and how they violate the normative expectations that we hold regarding the self, particularly its moral autonomy and authenticity. The article concludes by arguing that, despite post-structuralist challenges, some notion of a ‹core’ or ‹real’ self still holds salience for employees negotiating their identities within regimes of control. The assumptions and expectations surrounding this aspect of self are also a pivotal element in the western intellectual tradition that promotes and enables critique.     

Modelling pesticide risk: A marginal cost–benefit analysis of an environmental buffer-zone programme

A newly developed indicator of the pesticide risk for aquatic biocenosis in surface water bodies is applied within an economic sector model, and is used to evaluate alternative designs for an environmental policy programme. For rural districts (‘Landkreise’) across Germany, different widths of riparian buffer zones adjacent to surface water bodies are evaluated in terms of efficient cost/risk ratios.     

Natural Environments and Leisure among Rural–to–Urban Immigrants: An Application of Bourdieu's Concepts of Habitus,Social and Cultural Capital,and Field

This study explored the use of natural environments for leisure among rural-to-urban immigrants by adopting Bourdieu's concepts of habitus, social and cultural capital, and field. Data were collected with the use of individual interviews with 27 participants, including Mexican immigrants in the United States, Ukrainian immigrants in Poland, Moroccan immigrants in the Netherlands, and Turkish immigrants in Germany. The findings showed that for some immigrants, practices of social capital maintenance became disconnected from recreation in natural environments, while for all participants, nature-related cultural capital had low transferability in a migratory situation. Depending on their position in a new social field, immigrants developed different strategies to use local natural environments for leisure. Some strategies contributed to preserving old habitus, while one strategy (finding substitutes) contributed to gradual changes in immigrants' nature-related habitus. We suggest that embodied and emplaced skills of using nature should be incorporated in the notion of cultural capital.     

Der Wert der Worte – Wie digitale Methoden helfen,Kommunikations- und Wirtschaftswissenschaft zu verknüpfen

The use of digital methods offers a chance to connect communication science with economics. In recent years, a growing body of research in economics has turned its attention to media content, assuming that journalistic coverage contains hitherto neglected information relevant for business cycles or financial market movements. Interestingly, these approaches largely ignore communication science’s established theories and empirical findings. This paper aims at building a bridge between the two disciplines. Its contribution is threefold: a) it provides an overview of the most important approaches in economics that incorporate media content; b) it operationalizes the concept of the “narrative”, as it is used in economics, and distinguishes it from the concept of the “frame”, essential in communication science; c) exemplifying our approach, we present a new Uncertainty Perception Indicator (UPI) based on the topic modeling method Latent Dirichlet Allocation (LDA), that enables us to isolate different factors of economic policy uncertainty contained in media coverage.Economic studies treat journalistic media content as a proxy for sentiment prevalent in society. Typically, they rely on frequency analyses of certain keywords, like “recession” or “inflation”. Even more sophisticated approaches, such as Shiller (2017), who calls for establishing a new branch of “narrative economics”, or Baker et al. (2016), who construct a comprehensive set of media-based indicators, make no or little reference to communication science. This neglect could be discounted as pure ignorance, but this misses the point. Being a predominantly empirical discipline today, economics relies on long time-series of data, that have not been available for media content, a gap rendering the two disciplines largely incompatible.The gap is also reflected in terminology. “Frame” is a major analytical concept in communication science, while the term “narrative” has become in vogue in economics. Although both concepts are closely connected, they are rarely properly distinguished from each other. “Frame” can be considered as a rather static concept that applies during a limited period of time. “Narrative”, in contrast, implies dynamic properties, i.?e., the sorting of events, causes and effects over time, that explain how the current state of the world has come about, as stressed by Tenenboim-Weinblatt et al. (2016).In this paper, we propose a synergetic concept. Following Entman (1993), a media frame contains four elements: a) a problem definition, b) a problem diagnosis, c) a moral judgement, and d) possible remedies. We augment this approach by adding two more elements. According to our definition, a media narrative comprises a frame, or several ones, plus e) one or several protagonists—persons, institutions, or social groupings (nations, classes, etc.)—, whose relationships are (often) antagonistic and may change over time; and f) events, that are chronologically integrated and that are (often) assumed to constitute causal relationships. To put it metaphorically: a frame is to a narrative what a still photo is to a movie. Both are valuable concepts; the still photo shows more details, while the movie provides a contextualization over time.Topic models like LDA are valuable tools for the measurement of media narratives. The probabilistic approach enables researchers to conduct what may be called “macro-content analyses”, an exercise that focuses on average reporting patterns in large text corpora and can be translated into numerical time-series, thereby facilitating compatibility with empirical economics. Based on a topic’s frequency analysis, its top words and top articles, “mean media narratives” can be formulated, that integrate certain events, protagonists and frames.In our case study, we exemplify this concept by applying it to an indicator that is currently popular in economics, the Economic Policy Uncertainty Index (Baker et al. 2016). The EPU aims at capturing political developments that are exogenous to economic models and therefore unpredictable. Essentially, the indicator is based on the counts of articles containing a set of search words, such as “uncertain”, “economic” as well as institutions like the European Central Bank. Using identical search words as the EPU for Germany, we construct a similar corpus for the years 1994 to 2017. By conducting an LDA-based analysis, we are able to extract additional relevant information from the data. In particular, the evolution of different uncertainty factors and their development over time can be detected.Our Uncertainty Perception Indicator (UPI) contains six relevant news topics that are highly relevant for market developments: central banks, the national government, international politics, the business cycle, companies, and society. While the EPU merely shows how often uncertainty concerning economic policy is mentioned in the media, the UPI also indicates the origins of uncertainty. By grouping the six topics into three analytical categories—governments, markets, and society—we find a distinct break in the time-series. Before the financial crisis of 2008, the perception of uncertainty was rather balanced between the three factors. Since then, however, economic uncertainty has mainly been driven by political actors, most prominently by central banks. The corresponding narratives are a two-chapter story: in the first part, up to 2008, stable financial markets and smoothed business cycles prevailed, making central banking a rather straight-forward task. The second part is characterized by multiple crises, leaving central banks as dominant actors, that intervened with unconventional measures. Thereby, they became stabilizing forces, but at the same time sources of uncertainty with respect to the timing and the impact of these measures.     

Doing femininity and respectability: social networks and social capital among female members of Dutch student organisations

This research explores the complexities that underlie the formation of women’s social networks at traditional social student organisations in the Netherlands, advancing theory on the intersectionality of gender and class in leisure space. Building on Pierre Bourdieu’s theory of social capital it investigates if these social networks are segregated, and to what extent their divisions depend on previously acquired economic, cultural and symbolic capital. It analyses the hierarchical structures and ‘ranking’ of women’s year clubs within student organisations, and examines how the enactment and achievement of femininity determines women’s ability to move through social space. Finally, it investigates the use of social capital for women’s career progression. Semi-structured interviews were held with 20 women who were current or former members of one of the most traditional Dutch student organisations, the corps. Their accounts were used to gather information about the meaning women gave to their membership, and shed light on the role of previously acquired capital in the formation of clubs. Our findings show that women’s previously acquired social capital allowed them easier access to corps’ space and advanced their ability to navigate it. The establishment and ranking of year clubs and their members demonstrate the power dynamics that operate within the corps and the way class underlines network formation. Femininity was deemed one of the important markers of respectability and the enactment and achievement of ‘proper’ femininity determined women’s recognition and position in corps space. Despite the hierarchies of placement in the corps, most women profit from the social capital they acquired during membership, and can use it in selective ways for career progression and acquisitions.     

International trade,integration and industrial location: The case of Germany

The paper confronts empirical results on the spatial distribution of integration effects and export activities in the FRG with prediction based on different theoretical approaches. It is proved that integration has at most very slightly favoured the higher agglomerated regions, and has not been to the detriment of the periphery. Export activities contributed to regional industrial despecialization and to decreasing interregional disparities. Population potentials, calculated with different distance parameters, regional productivity, the sectoral composition of industry, and average firm size are tested as explanatory variables. The results question that there are contemporary effective ‘regional’ determinants of integration effects.