UNIT MANAGEMENT BUYOUTS, STOCKHOLDER WEALTH, AND SELLING FIRMS' CHARACTERISTICS

Previous research on unit management buyouts, UMBs, has shown that selling firms benefit from the selloff transaction. The current research demonstrates that when the selling firm has either poor liquidity or poor earnings, selling firm shareholders do not benefit as much. We hypothesize that the unit managers have knowledge about the selling firm's difficulties so they do not pay as large a premium for the assets. Since the unit managers technically are employed by the selling firm shareholders, their bargaining to achieve a better price is an agency cost. Finally, selloff frequency does not affect seller abnormal returns.     

Rates of Return to Schooling in China

This study uses data from a 1988 survey of Chinese individuals to estimate rates of return to schooling in China. The Mincer-type rate of return to schooling was estimated at 4.02 percent in the rural areas and 3.29 percent in the urban areas; these are fairly low estimates compared with similar estimates in other countries. The rate of return to schooling for females was significantly higher than that for males in urban areas. In addition, members of the Communist Party in urban areas had significantly lower returns to schooling compared with non-members.     

Productivity growth in Indian agriculture: is there evidence of convergence across states?

This paper explores the question of convergence in total factor productivity (TFP) in agriculture across fourteen major agricultural states of India. Using a Törnqvist–Theil index for TFP growth for the period 1973–1993, we find no evidence to support convergence to a single TFP level (σ‐convergence). After grouping the various states on the basis of their productivity performance, we find that the high‐performing states show a gradual movement towards the trend, whereas the low‐performing states generally show more volatility. Testing for long‐run convergence in levels of agricultural productivity, we find evidence of conditional beta‐convergence after controlling for state‐specific factors and idiosyncratic year‐specific volatility. The results are robust to alternative specifications of tests of unit root in panel data developed recently.     

iTV: A major opportunity for financial services,or not?

Interactive television has arrived, thanks to substantial technology investments that have been made by Sky and others. It is growing in importance as innovative interactive applications are developed for broadcast programmes (eg the BBCi service and Big Brother), and for advertising — and will develop further when broadband deployment gets to critical mass. Readers should not expect a television-variant of the world wide web, however. This was tried during 2000–2002 in the form of web look-alike, interactive ‘walled garden’ sites, and failed to attract critical mass footfall. The model has evolved and now revolves around interactive content synchronised with broadcast, which offers financial services companies an interesting new way to increase awareness and to differentiate the service presentation. Furthermore, over the next ten years, broadband is expected to usher in a new era of personalised television — in which specialised broadcasts (such as personal pensions advice programmes) can be made available on demand. The observations in this paper are mainly drawn from the UK, where digital television penetration is high; the lessons can be applied more broadly, however, and are relevant to any organisation thinking of promoting its service through entertainment channels.