THE PRICING OF EQUITY CARVE‐OUTS DURING THE 1990s

We examine the level of underpricing and characteristics of equity carveouts (ECOs) from 1990 to 1998 (the 1990s) and from 1999 to 2000 (the bubble period). For a sample of 458 ECOs, we find a mean initial return of 8.75% for the 1990s and 47.76% for the bubble period. The results suggest that, similar to other initial public offerings (IPOs), ECOs have been more willing to accept underpricing through time because of an increased importance in analyst coverage and the increased use of spinning, the practice where investment bankers allocate IPOs to high‐profile customers to garner potential future business.     

What Do You Know,Who Do You Know?: School as a Site for the Production of Social Capital and its Effects on Income Attainment in Poland and the Czech Republic

This paper criticizes traditional approaches to stratification, which suggest that education contributes to inequality solely by endowing people with different amounts of human capital (knowledge and skills) or credentials. What these approaches overlook is the social component of education—friends, acquaintances and other connections one accumulates while in school. These connections reduce the uncertainty inherently present in the hiring process by compensating for lack of information with trust. We argue that social capital gained while in school has an independent effect on individual income, and show how this effect varies by education and experience levels. Conceptualizing schooling as an important source of social capital and finding ways to disentangle the effects of human and social capital on individual income are a contribution that economic sociologists can make to the study of education and inequality.     

Information structure and stochastic control performance

The linear quadratic control problem with unknown parameters is analytically intractable. To obtain an analytically tractable strategy the statistical assumptions frequently considered are (1) fixed known parameters, (2) independent random parameters, and (3) independent path dependent stochastic parameters. Also considered are three information structures — (1) no observations, (2) observations without anticipation, and (3) observations with anticipation. Treating the assumptions as true, the performance of the strategies is shown to monotonically improve with respect to the information structure in order 1, 2, 3 and with respect to the statistical assumptions in order 2, 3, 1. The results provide estimates of the performance losses due to position and parameter uncertainty for the unknown parameter case.     

Intra-industry foreign direct investment: Its rationale and trade effects

Zusammenfassung Intra-industrielle Direktinvestitionen im Ausland: Ihre Gründe und Auswirkungen auf den AuΒenhandel. — Der Aufsatz zeigt, daΒ intra-industrielle Direktinvestitionen oder die daraus finanzierte Produktion im Ausland Formen des internationalen wirtschaftlichen Engagements sind, die ihre Begründung sowohl im intra-industriellen Handel als auch in der inter-industriellen Produktion finden. Dies wird an Hand einer Taxonomie aufgezeigt. Es wird argumentiert, daΒ intra-industrielle Direktinvestitionen im Ausland eine natürliche Folge der gleichen Faktoren sind, die zu intra-industriellem Handel führen, wobei unternehmensspezifische Vorteile wichtiger sind als die in einem Land begründeten Vorteile. Intra-industrielle Auslandsinvestitionen bedeuten auΒerdem, daΒ internationale Transaktionen am besten in hierarchischer Form und nicht über (Kassa-)M?rkte durchgeführt werden, und zwar aus Gründen, die den g?ngigen Theorien über multinationale Operationen entnommen werden k?nnen. Ganz sicher folgt sowohl aus der Theorie als auch aus den verfügbaren Daten, daΒ die intra-industrielle Produktion wahrscheinlich an Bedeutung gewinnen wird, vor allem dann, wenn keine Eingriffe durch die Regierungen erfolgen.

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Résumé Investissement étranger direct intra-industriel: sa base raisonnée et ses effets commerciaux. — L’article démontre que l’investissement étranger direct intra-industriel (IE-DII) ou la production correspondante comme forme d’engagement international économique est soumise à des motifs rationnels qui basent sur le commerce intra-industriel (Cll) et la production inter-industrielle. Les auteurs arguent que l’IEDII est une conséquence naturelle des facteurs économiques qui ménent au CII et qui même sont déterminés par la nature de ?l’industrie? dans laquelle le CH se passe. En plus, cependant, l’IEDII implique que les transactions internationales sont conduites le mieux par des hiérarchies et non par des marchés à cause des raisons qui peuvent être déduites par des théories recues des opérations internationales. Il apparait clairement, de la théorie aussi bien que des données disponibles que probablement la production intra-industrielle gagnera en importance, particuliérement si elle restera libre de l’intervention gouvernementale.

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Resumen Inversion extranjera directa en la industria: razón de su impacto sobre el comercio. — El artfculo muestra como la inversión extranjera directa intra-industrial o la producción como forma de participación económica internacional tiene una razón de ser basada en el comercio y en la producción intra-industrial. Se propone que la inversión extranjera directa es una conscuencia natural de los factures económicos que llevan el comercio intra-industrial, los que a su vez están determinados por la naturaleza de la industria en el que el comercio tiene lugar. La inversion extranjera directa implica adicionalmente sin embargo que las transacciones internacionales se ejecutan mejor a travès de jerarqufas que a travès de mercados por razones que pueden ser derivadas de conocidas teorias sobre operaciones multinacionales. Es evidente, por medio de la teoria y de las estadisticas disponibles, que se puede esperar un crecimiento de la producci?n intra-industrial, especialmente si se le libèra de interferencia gubernamental.

     

Implementing business ethics: Sexual harassment

Sexual harassment is a problem for many organizations. Organizations must understand that sexual harassment lies within the broader context of sex discrimination and inequality of opportunity in the workplace. Sexual harassment is both an illegal and unethical practice. Companies need to implement a policy which respects the rights of individual employees by prohibiting sexual harassment. This policy need to be clearly stated in the company Code of Ethics and enforced rigorously.Karen A. Crain is a Territory Representative for Wyeth-Ayerst Laboratories pharmaceutical company. She has published in a recent Proceeding of the International Conference of theAcademy of Business Administration.Kenneth A. Heischmidt is a Professor of Marketing at Southeast Missouri State University and has published in various professional journals and conferences includingJournal of Advertising, Journal of Professional Services Marketing, Journal of Hospital Marketing, Health Marketing Quarterly andJournal of Education for Business. He has received best paper awards at both the American Marketing Association and the Academy of Business Administration conferences.     

Retail Strategies on the Web: Price and Non–price Competition in the Online Book Industry

Two conflicting predictions have emerged regarding the effect of low–cost information on price. The first states that all Internet retailers will charge the same low price for mass produced goods. The second states that Internet retailers will differentiate to avoid intense price competition. Using data collected in April 1999 on the prices of 107 books in thirteen online and two physical bookstores, we find similar average prices online and in physical stores and substantial price dispersion online. Analysis of product differentiation yields no clear results. The substantial premium charged by Amazon provides indirect evidence of product differentiation.     

Mimic,an alternative programming language for industrial dynamics

One of the recent quantitative tools available to economists and planners, in business and government, is a technique known as industrial dynamics (Refs. [2, 3, 5, 8]). After briefly describing this technique, this article shows how the MIMIC language can be used as a short-cut to industrial dynamics computations. The intent is to describe this programming language in sufficient detail to allow the reader to judge its capabilities and ease of use.     

Family‐friendly work practices in Britain: Availability and perceived accessibility

Using linked data for British workplaces and employees, we find a low base rate of workplace‐level availability, and a substantially lower rate of individual‐level perceived accessibility, for five family‐friendly work practices' parental leave, paid leave, job sharing, subsidized child care, and working at home. Our results demonstrate that statistics on workplace availability drastically overstate the extent to which employees perceive that family‐friendly policies are accessible to them personally. British workplaces appear to be responding slowly, and perhaps disingenuously, to pressures to enhance family‐friendly work practices. © 2006 Wiley Periodicals, Inc.