Market value effects of acquisitions involving internet firms: a resource‐based analysis

While most prior research suggests that the average change in market value of acquiring firms varies closely around zero, recent research grounded in the resource‐based view and organizational learning theory identify positive returns to acquirers. We contribute to this literature by focusing on acquisitions of Internet firms and the potential for the transfer of scarce resources. We hypothesize that acquisitions made by offline firms of Internet firms and by Internet firms of other Internet firms lead to positive market valuation for the acquirer. Results of an event study of 798 acquisitions of Internet firms provided support for these predictions. We also find that prior alliances with online firms do not reduce the gains from such acquisitions to offline firms. Copyright © 2006 John Wiley & Sons, Ltd.     

Your Governance or Mine?

In response to criticism directed at the resource sector's corporate governance, this paper examines the corporate governance and underlying firm characteristics of resource development stage entities (DSEs) relative to a size‐matched sample of non‐resource firms. We find that resource DSEs have different governance characteristics in the measures of board independence, chair/CEO duality and CEO cash bonuses. Furthermore, there are differences in the information environment measures of analyst following, debt levels, stock market return and stock turnover. Considering we document substantial differences in underlying firm characteristics, corporate governance differences are likely appropriate to the mining industry and should not be uniformly labelled as ‘bad’. Our results suggest that media rankings based on corporate governance scores may not accurately portray the resource sector. Overall, our results are of interest to Australian investors and regulators and contribute to a broader understanding of contextually contingent corporate governance.     

Frequent issuers’ influence on long-run post-issuance returns

Prior studies conclude that firms’ equity underperforms following many individual sorts of external financing. These conclusions naturally raise significant questions about market efficiency and/or about the techniques used to measure long-run “abnormal returns.” Rather than concentrating on a single security type or issuance, we examine long-run performance following any and all sorts of security issuances. Initial financing events do not associate with underperformance; however, subsequent financings do. Our results suggest that negative post-issuance returns have nothing to do with the specific type of security issued, and everything to do with the number of types of securities issued.     

Management’s personal ideology and financial reporting quality

Review of Quantitative Finance and Accounting - We investigate the relation between managers’ personal ideologies and financial reporting quality. We use Federal Elections Commission data to...     

The effects of crowdsourcing contribution type and temporal consistency on new product development success

Extant literature suggests that individuals contribute to crowdsourcing programs in various ways but offers few insights about whether participants' creative contributions (original new product submissions) or their evaluative contributions (scoring or commenting on others' submissions) have a greater impact on their ability to create commercializable new products. Using a large-scale data set obtained from the crowdsourcing website Threadless.com, our study examines the relative impact of participants' creative and evaluative contributions and the effects of different types of evaluative contributions on submission success (i.e., a participant's ability to generate a commercializable new product). Our findings reveal that submission success is enhanced when participants generate both creative and evaluative contributions. In addition, we find that submission success depends not only on the volume of the creative contributions that a participant makes but also on the temporal consistency with which said contributions are made (i.e., adopting a consistent vs. a sporadic submission pattern). Specifically, our findings show that a participant's creative contribution consistency enhances their submission success, especially when creative contribution volume is high. This research extends the existing crowdsourcing literature by offering new insights about how contribution type and contribution consistency in a crowdsourcing program impact submission success.     

Nonlinear incentives and mortgage officers’ decisions

In the aftermath of the recent financial crisis, banks should ensure that their incentive compensation policies appropriately balance long-term risk with short-term rewards. Using daily output data from mortgage officers in a US commercial bank, we test the notion that nonlinear contracts create time-varying incentives for the employees and impose costs on the firm. We provide empirical evidence that mortgage officers greatly increase their output toward the end of each month, when the minimum monthly quota is assessed. This occurs through a combination of reducing the processing time and approving some marginal applications. We also find that mortgages originated on the last working day of the month have a higher likelihood of delinquency.     

Supply Dynamics in the U.S. Hog Industry

A variety of methods and empirical techniques are now available for estimating dynamic economic relationships. Unfortunately, most dynamic modeling procedures rely heavily on the sample data for specification. This is due to a lack of a priori information useful for determining the appropriate lag structure. However, there is frequently a rich source of information that can be used to define lag structures in agricultural supply models. This information is related to the biological and physiological processes characterizing agricultural production. In this paper, a quarterly econometric model of supply response in the U.S. hog industry is specified and estimated. This model incorporates relevant biological features of hog production directly into the specification. The structural integrity of the model is evaluated by examining post-sample predictive ability and mean-path elasticities. The results indicate performance that is consistent with observed behavior in the U.S. hog industry. Nous disposons aujourd'hui de toute une gamme de méthodes et de techniques empiriques pour ?estimation des rapports économiques dynamiques. Malheureusement, la plupart des méthodes de modélisation dynamique dépendent étroitement, pour leurs spécifications, sur des données échantillonnées. Ceci découle ?un manque ?informations a priori utiles pour la détermination de la structure de retard appropriée. Toutefois, on dispose fréquemment ?une riche source ?informations qui peuvent servir à définir les structures de retard dans les modèles de ?offre en agriculture. Cette information est liée aux processus biologiques et physiologiques caractérisant la production agricole. Dans le présent document, nous procédons à la spécification et à ?estimation ?un modèle économétrique trimestriel du comportement de ?offre dans le secteur américain du pore. Ce modèle incorpore directement dans la spécification les caractéristiques biologiques pertinentes de la production porcine. Nous évaluons ?intégrité structurale du modèle en examinant ?aptitude prédictive post-échantillonnage et les valeurs moyennes ?élasticité. Nos résultats laissent conclure à une performance qui vient corroborer le comportement observé dans le secteur américain du porc.