THE RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND STOCK MARKET BASED MEASURES OF CORPORATE DIVERSIFICATION

This study examines the relationship between corporate diversification and financial performance. The use of a stock market based measure of diversification allowed a much larger database than in previous studies and overcame the subjective nature of measuring internal diversification. Because previous researchers found that firm size affected performance, size was controlled in this analysis. The authors conclude that there is no statistically significant relationship between the degree of internal diversification and financial performance.     

Jan Tinbergen's Income distribution: Analysis and policies

Summary This paper is a detailed review and critique of Jan Tinbergen'sIncome Distribution: Analysis and Policies. In Part I, the books primary findings and their bases are recounted. This presentation serves as the basis for a number of questions regarding the merits of the overall approach — in particular, the empirical methodology — and the reliability of the findings. These questions are posed in Part II. In Part III, an overall appraisal of the work is offered.North-Holland Publishing Co., Amsterdam, 1975.Professor of Economics and Fellow of the Institute for Research on Poverty, University of Wisconsin-Madison. This article was prepared while the author was a Fellow at the Netherlands Institute for Advanced Study. The work was supported in part by the Netherlands Institute for Advanced Study and by funds granted to the Institute for Research on Poverty at the University of Wisconsin-Madison by the U.S. Department of Health, Education and Welfare pursuant to the Economic Opportunity Act of 1964. Helpful comments on an earlier draft by Hans Daudt, Arthur Goldberger, Victor Halberstadt, Arnold Heertje, and Jan Pen are acknowledged. A discussion with Jan Tinbergen on issues raised in his volume was especially valuable, This review article appeared in a slightly different form in the Winter, 1975 issue of theJournal of Human Resources.     

Redundancy,values and public policy

Although the Industrial Relations Act marks the most significant break with the traditional “abstentionist” role of the law in British labour relations, it is true to say that during the last ten years the development of public policy has entailed a growing involvement of lawyers and the law in the world of work. As Professor Kahn-Freund has written:     

Hypothesis testing based on goodness-of-fit in the moving average time series model

Small sample properties of t-tests are compared with those of tests based on relative goodness- of-fit in the context of the first order moving average time series model. Monte Carlo experiments reported in the paper suggest that the actual size of these t-tests greatly exceeds theoretical large sample significance levels, while conformity of goodness-of-fit statistics to the appropriate chi-square or F-distributions is much closer. The evidence presented suggests that practitioners are well advised to employ goodness-of-fit tests as a check on results of t-tests particularly when the latter indicate ‘significance’.