A TEST OF THE EASTERBROOK HYPOTHESIS REGARDING DIVIDEND PAYMENTS AND AGENCY COSTS

Easterbrook (1984) argues that dividend payments may be an ambiguous signal unless the market can distinguish growing firms from disinvesting firms. Shares of growing firms that announce both financing and dividend increases are predicted to rise more in value than shares of firms announcing a dividend increase alone. We examine the relation between prior financing activity and the market response to initial dividends and find evidence consistent with the Easterbrook agency cost model.     

Equity-for-Debt Exchange Offers: Theory, Practice, and Evidence

Studies of investor responses to exchange offer (EO) announcements find a positive relation between abnormal returns and the proposed change in leverage: a result consistent with the performance signaling hypothesis. In this study of equity-for-debt EO announcements, shareholder wealth declines and the relation between Tobin's Q and announcement effects is consistent with the free cash flow hypothesis. There is no pattern of contemporaneous and subsequent performance of EO firms that systematically supports the signaling, income smoothing, or free cash flow hypotheses. We infer that EOs are motivated by sinking fund considerations, rather than signaling or compensation motives.     

Nonparametric analysis of technical,pure technical,and scale efficiencies for food crop production in East Java,Indonesia

Nonparametric analysis of technical efficiency for irrigated farms in the Madiun regency in the west-central part of East Java, Indonesia is conducted using linear programming techniques. This procedure allows the relative technical efficiency for each farm to be determined and for inefficiencies to be decomposed into pure technical inefficiency and scale inefficiency and does not require restrictions or assumptions regarding functional form to be placed on the data. Farmers in Madiun generally are efficient relative to each other. Farmers operating inefficiently do so more often because of scale inefficiencies rather than pure technical inefficiencies. A majority of the farms operate in the region of decreasing returns to scale rather than increasing returns to scale. Farmer age, the level of diversification of cropping activities, and high school education were found to be related to technical efficiency in the rainy season under irrigated conditions. Other socioeconomic factors were not statistically significant. The results imply that inefficient farms use excessive levels of inputs, particularly nitrogen fertilizer. This is perhaps due to the lingering effects of past input subsidization policies, particularly of fertilizers, in Indonesia, or to risk-reducing behavior. The results also imply that current government policies to encourage diversification of cropping practices in Java may lead to greater technical inefficiencies in production. In addition, extension education targeted to younger farmers with low levels of formal education would improve efficiency.     

The Year in Review: Economics at the Antitrust Division 2013–2014

During 2013–2014, the Antitrust Division of the U.S. Department of Justice brought a wide range of matters to successful conclusions. The three matters that are discussed below demonstrate the diverse set of issues that the division examines every year.     

A wakeup call for the field of entrepreneurship and its evaluators

In this editorial, I seek to inform administrators and members of promotion and tenure committees about significant developments in the field of entrepreneurship. Using both objective and subjective data, I present a case for why entrepreneurship journals should be considered on par with other, premier management journals, which are widely considered to be unequivocal “A” journals used to assess scholarly contribution and productivity. I entertain and address common objections to equal treatment for entrepreneurship journals, and conclude with a call to action for both entrepreneurship scholars and the field's evaluators.     

Organizational hybrids as biological hybrids: Insights for research on the relationship between social enterprise and the entrepreneurial ecosystem

Using the study of hybridization in evolutionary biology as metaphorical inspiration, I offer a thought experiment about the emergence and proliferation of social enterprise and the influence of hybrid organizing on the entrepreneurial ecosystem. After establishing a number of analogues between biological and organizational hybrids, I analyze the degree to which social enterprise may be indicative of hybrid speciation – i.e., a new organizational form – versus introgressive hybridization – i.e., a variant of a more traditional organizational form. I then use the metaphor to examine whether social enterprise: (1) possesses distinct rules and features, (2) is shaped by or shaping the entrepreneurial ecosystem, (3) still remains a hybrid organization, and (4) might even be considered an invasive species.     

Tour guiding,organisational culture and learning: lessons from an entrepreneurial company

This paper examines the impacts of organisational culture on the learning and development of tour guides. Drawing on a case study of a small entrepreneurial tour company, the paper considers the nature of the organisation's culture, the tours it provides, including their narrative contents and the processes of organisational learning and socialisation. The paper suggests that the development of a learning culture within such an organisation may benefit from the provision of appropriate learning opportunities among the guides and facilitators who coordinate guide development. Copyright © 2008 John Wiley and Sons, Ltd.     

The value of user image in quelling aberrant consumer behavior

Shoplifting has reached epidemic proportions. Traditional approaches to keeping this behavior under control have met with limited success. This article explores the use of user image to decrease shoplifting. The analysis supports the approach. If the image of the “typical shoplifter” is made more negative, individuals anxious to disassociate themselves with the negative image will be less likely to shoplift.     

How farmers benefit from plant clinics: an impact study in Bolivia

Between 2000 and 2009, nine plant clinics in three agro-ecological areas of Bolivia (Andes, lowlands and valleys) served about 800 communities in an area roughly 300 × 100km. Over 6000 farmers consulted these clinics with 9000 queries. Many found the advice so useful that they visited the clinics repeatedly. A survey of 238 clinic users found that most adopted the clinics' recommendations. Fruit and vegetable growers who followed the clinic recommendations tended to spend less on pesticides. As for certain crops like potato, citrus and peach palm, a modest increase in pesticides helped improve the quality and quantity of the harvest. Farmers improved their incomes by following the clinics' advice. The poorest farmers enjoyed the greatest increase in income per hectare. This was the first study to explore the impact of plant clinics; future studies need to be improved, for example by obtaining baseline data and by comparing clinic users to their peers who have not used clinics.