Private business sales environments in the United Kingdom

When an owner-manager of a business firm decides to sell the company, it is not a trivial decision. Whether it is a sale forced by circumstances outside company control, or a positive, strategic choice, it is certainly significant. Moreover, the method of “exit,” the advice taken, and the deal that is eventually struck will clearly affect the nature of the owner's eventual lifestyle. In such circumstances, there are four choices open to the owner: (1) Sale to a third party; (2) Sale to the management and/or employees; (3) Public quotation on the Stock Exchange; (4) Liquidation.This research first analyzes the magnitude of activity in the United Kingdom in each of the above categories during the five-year period 1983–1987. The results show very clearly that there is a strategic loosening taking place in the corporate marketplace—more firms are being sold, and more owner-managers are choosing to exit from ownership of their firms. Moreover, the most frequently used exit route by far is that of the private advertized sale.The second part of this paper analyzes in detail the data for the private advertized sale. By means of principal-component analysis and cluster analysis seven, ecological incubator environments were constructed at a county level. Significant differences were observed between the environments in respect to private advertized sales, private advertized sales rates, and industrial structure. These results show clearly that the nature of the supply of owner-managers wishing to realize their ownership is geographically biased and is, in part, a reflection of the existing industrial and commercial base.     

Sequential simultaneous estimation of the mean and variance: The rate of convergence

We reconsider the problem of simultaneous estimation of the mean and variance of a normal distribution along the lines of Mukhopadhyay (1981), and derive the rate of convergence of the appropriately normalized stopping time to normality. The Berry-Esseen type results for randomly stoppedU-statistics have been utilized repeatedly in this context.     

The choice of licensing versus direct foreign investment in developing countries

For developing, technology-receiving countries, direct foreign investment is always better than licensing in the short run with sectoral immobility of capital. In the long run with perfect mobility of capital between sectors, the welfare rankings of the two scenarios are dependent upon the amount of domestic capital. The likely case is that the developing country would have a smaller amount of domestic capital than foreign investors, and hence licensing could yield higher national welfare.The authors are indebted to many useful comments of two anonymous referees. The authors, however, are solely responsible for any remaining shortcomings.     

The welfare economics of dominant-firm acquisitions

Conclusion The main results of this paper provide some analytic underpinning for a strict horizontal merger policy relating to dominant firms. However, even under standard assumptions, examples have been demonstrated where dominant/fringe firm mergers increase welfare. Most of these examples imply shutting down acquired facilities, a practice regarded as unfavorable evidence by the court in theStandard Oil case; consequently, they do not by themselves seem to offer much hope for raising economies as an antitrust defense. Finally, it should be noted that this paper has considered only single-product economies; economies of scope arising in multi-product (and multi-market) contexts could be large enough to justify dominant/fringe firm mergers⁹.An earlier version of this paper was presented at the Economic Policy Office seminar, Antitrust Division, U. S. Department of Justice. The author is grateful to Marius Schwartz, other seminar participants and an anonymous referee of this journal for helpful comments. M. Daniel Westbrook and Brian Flynn kindly arranged for the calculations reported in Appendix C.