INTRADAY CHANGES IN TARGET FIRMS' SHARE PRICE AND BID-ASK QUOTES AROUND TAKEOVER ANNOUNCEMENTS

This paper documents changes in share prices, bid-ask spreads, and quote sizes for target firms during the day a takeover proposal is announced. The mean 21.2 percent announcement-day return consists primarily of a 19.5 percent return at the announcement. There is little evidence that spreads increase before the announcement, except when trading is suspended because of an order imbalance. Quote sizes show some sign of decreasing just before the announcement. The quoted bid-ask spread and size increase immediately after the announcement, but spreads quickly return to normal.     

Strategic Judging Under the U.S. Sentencing Guidelines: Positive Political Theory and Evidence

We present a positive political theory of criminal sentencingand test it using data from the U.S. Sentencing Commission.Under the U.S. Sentencing Guidelines, judges can use "offense-leveladjustments" (fact-based decision making) to lengthen or shortenthe Guidelines' presumptive sentences. Judges also can use "departures"from the Guidelines (law-based decision making) to lengthenor shorten sentences. In general, departures are reviewed morestrictly than adjustments by circuit (appeals) courts. Our theorypredicts that a sentencing judge politically aligned with thecircuit court will be more likely to alter sentences throughsentencing departures than a judge not so aligned with the circuit;by contrast, our theory predicts that judges can more freelyuse fact-oriented adjustments to alter sentences, regardlessof the circuit court's sentencing policy preferences. Our analysisof federal sentencing data largely supports the theory's predictionsregarding the use of adjustments and departures and the impactof political alignment between higher courts and sentencingjudges.     

An applied ethical analysis system in business

Much of the discussion on business ethics is philosophical in nature. There is no lack of theories and ideals on moral reasoning. What is missing is translating these moral theories and principles into specific, operational procedures that can indicate a proper course of action. Although most business actions are routine and do not raise serious ethical questions, many people experience difficulty in applying their personal moral principles to specific business decisions in ethically-dilemmatic situations.This study seeks to develop a framework that can be utilized to implement personal moral reasoning based on the teleological theory of Utilitarianism and the deontological theory of Ross's Prima Facie Duties in the business decision-making process. The central feature in the framework is a point-system that quantities the ethical worth of a proposed business action and determines whether the action would be ethically desirable if taken. It provides an objective element in an otherwise qualitative ethical inquiry process. This study also illustrates practical applications of the system by analyzing the ethical implications of a proposed action where foreign bribery is involved.Alan Wong is Assistant Professor of Finance, Indiana University Southeast. His areas of academic research are managerial ethics and financial options. He has published in theReview of Business and Economic Research.Eugene Beckman is the Director of the MBA Program at Indiana University Southeast. He was awarded the Faculty Excellence Award in 1989 and his primary areas of research are business ethics and marketing.     

Women Entrepreneurs and Family Firm Heterogeneity: Evidence from an Emerging Economy

Family firms add to the economic and social well-being of countries. While research on heterogeneity of family firms is gaining momentum, it has mostly been gender-neutral. The study fills this gap by examining heterogeneity of family firms owned and managed by women, in the context of a developing country—Brazil. The study draws upon the resource-based view of the firm to investigate the relationships between firm performance, family involvement, and financial resources at the start-up phase. An inductive analysis reveals two patterns. First, family firms that are started with the family achieve better performance than firms that are launched without the family and later evolve into a family business. Second, family firms that are funded with women entrepreneur’s own savings achieve worse performance than family firms that are started with borrowed funds. The results are useful for strategic decision making in fostering family businesses headed by women and proactive public policies for future innovation to enhance the success of women entrepreneurs.     

Full circle support: unpacking the relationship between women entrepreneurs’ family-to-work support and work interference with family

With an anchoring in conservation of resources theory, this study examines the mediating role of women entrepreneurs’ work-related emotional exhaustion in the relationship between their family-to-business support and work interference with family, as well as the moderating role of the entrepreneurial character of their company’s strategy in this process. Survey data collected from women entrepreneurs in Argentina indicate that a notable reason that business support received from the family diminishes work interference with that same family is that it abates the sense of being overburdened by work. This benefit of reduced exhaustion is especially prominent to the extent that women entrepreneurs pursue an energy-consuming, entrepreneurial strategy for their business. For entrepreneurship scholars and practitioners, this research accordingly reveals a critical channel through which supportive family relationships can decrease the probability that women entrepreneurs bring work challenges home (i.e., diminished depletion of work energy), and it shows how this explanatory factor varies with the strategic profile they adopt for their business.

     

CAPITAL STRUCTURES IN EMERGING STOCK MARKETS: THE CASE OF HUNGARY

This paper studies developments in the Hungarian capital markets during 1992–95 and investigates the determinants of the capital structures of companies listed on the Budapest Stock Exchange. Hungarian companies had very low leverage ratios. Empirical findings indicate that the negative relationship between leverage and proportion of tangible assets was primarily caused by the lack of long‐term debt financing. The relationship between leverage and the size of the company provides some indication of the importance of trade credits for the companies. The more profitable companies had less debt than less profitable ones. This is attributed to the firms’financial incentives aggravated by the segmentation of Hungarian credit markets and credit rationing within the financial environment. Manufacturing firms and firms with the state among their major shareholders enjoyed higher levels of debt financing relative to other companies.