Taxation and the stock market valuation of capital gains and dividends: Theory and emphirical results

Dividends seem to be more heavily taxed than capital gains. Why then do corporations pay dividends rather than repurchasing shares or retaining earnings? Either corporations are not acting in the interests of shareholders, or else shareholders desire dividends sufficiently for nontax reasons to offset the tax effect.In this paper, we measure the relative valuation of dividends and capital gains in the stock market, using a variant of the capital asset pricing model. We find that dividends are not valued differently systematically from capital gains. This finding is consistent with share price maximization by firms but inconsistent with the fact that most shareholderspay a heavier tax on dividends.We also show that the relative value of dividends provides an indirect measure of a marginal Tobin's q. The measured value of dividends relative to capital gains tends to be higher during prosperous periods, as is consistent with this interpretation. We hope that this time series on a marginal Tobin's q will prove to be useful in forecasting the rate of investment.     

Regulatory incentive policies and abuse

We examine the incentives for abuse under rate-of-return (ROR) and incremental surplus subsidy (ISS) regulation. Abuse consists of expenditures by the regulated firm that provide private benefits, but do not reduce production costs. We show that ISS regulation provides efficient incentives for owners of the regulated firm to limit abuse by subordinates. We also prove that abuse by owners of the firm will generally be greater (smaller) under ROR regulation than under ISS regulation when consumer demand for the regulated product is inelastic (elastic). Furthermore, we show that to limit abuse and improve welfare under ROR regulation, it can be advantageous to ignore available information about consumer demand.     

Systemic justice and burnout: A multilevel model

With the aim of extending organisational justice research to embrace significant and enduring aspects of the workplace context, this study examines organisational culture and human resource management (HRM) as constitutive dimensions of systemic justice and relates them to employee health. Bridging organisational justice, HRM, organisational culture, and occupational health research, we advance and test a multilevel model relating systemic justice to burnout. Data collected from 60 organisations; 89 employee groups; and 1,976 employees provide support for the hypothesised relationships between justice‐oriented culture, in terms of organisational values and group culture, and justice‐oriented HRM. In turn, justice‐oriented HRM related directly to employee burnout and indirectly through employee perceived job control and supervisor social support.     

When do auctions ensure the welfare‐maximizing allocation of scarce inputs?

We determine when an unfettered auction will ensure the welfare‐maximizing allocation of a scarce input that enhances product quality and may reduce production costs. A supplier values the input for this “use value” and for its “foreclosure value,” because once the input is acquired, it is unavailable to rivals. An unfettered auction often ensures the welfare‐maximizing allocation of an input increment. However, it can fail to do so when the input would increase relatively rapidly the competitive position of a rival with a moderate competitive disadvantage. Bidder handicapping that ensures auctions generate welfare‐maximizing input allocations differ from standard handicapping policies.     

Effects of income and social awareness on consumer WTP for social product attributes

Recent developments in environmental and animal welfare issues, and the introduction of new production practices may have affected consumer attitudes and preferences toward differentiated product choice. Factors such as animal well-being, environmentally friendly production, and the use of antibiotics appear to be increasingly core consumer concerns. We link the aforementioned with Maslow's hierarchy of needs suggesting that the higher income consumers should be more altruistic in their consumptive behavior and test this by evaluating consumer preferences for these attributes in pork chops. We also test whether social consciousness of the consumers translates into choice behavior. Data was obtained by choice experiment surveys and mixed logit estimation was used to estimate consumers' willingness-to-pay for the credence attributes. Results reveal that both, higher income and socially aware consumers are on average willing to pay higher premiums for the antibiotic-free attribute, but not for other two social attributes. Also, the group of higher income consumers is highly heterogeneous in their preferences, whereas socially aware consumers tend to be more homogeneous in their preferences.     

Managing ambiguity: merger activity in the nonprofit housing sector

Merger behaviour in the nonprofit sector has been relatively neglected, yet has considerable marketing implications. This paper draws on a range of sources to explore the nature of merger activity in the nonprofit housing industry. It locates mergers within debates about inter-organisational strategies, and explores the context, extent, motivations for and regulation of mergers in the housing industry. While there are many similarities in environmental stimuli to and processes of negotiating mergers between the profit-distributing and nonprofit sectors, there are some distinctive features. This research explores the ambiguous nature of the merger activity among housing organisations. This ambiguity infects the terminology and record-keeping systems and helps to explain a significant gap between rhetoric and activity. Such ambiguity may be more than a negotiating strategy. It may represent the attempt to manage conflicting pressures to market nonprofit organisations as ‘sensitively serving the needs of society’ by on the one hand being competitive and efficient while on the other remaining value based and locally accountable. Copyright © 1999 Henry Stewart Publications