What Drives Target Price Forecasts and Their Investment Value?

This paper examines the informativeness of analysts’ target price forecasts by relating the investment value of target prices to their primary drivers. Decomposing target price forecasts into near‐term earnings forecasts and price‐to‐earnings ratio forecasts, we show that target price revisions reflect information from both components. In addition, we also find that the relative importance of each component in target price revisions is related to firm characteristics. A portfolio based on target price implied expected returns delivers significant abnormal returns. More importantly, we find that the abnormal returns are associated with both earnings and price‐to‐earnings forecasts, which suggests that the informativeness of target price forecasts comes not only from analysts’ ability to forecast short‐term earnings but also from their ability to assess risk and long‐term growth prospect implied in price‐to‐earnings forecasts.     

The Effect of Government Ideology on an Exchange Rate Regime: Some International Evidence

This paper comprehensively investigates the effect of government ideology on the type of exchange rate regime that a country implements via multinomial logit and multinomial probit models for 147 countries in the period 1974–2009. Our results clearly indicate that a left‐wing government increases the likelihood that a country implements a flexible regime in the classifications of exchange rate regimes. Nevertheless, evidence is weaker when using the de jure IMF course classification, which is set up by Ilzetzki et al. ( 2008 ). In a deeper investigation, we find that left‐wing governments are more likely to choose a flexible regime relative to a fixed one in our sample of OECD, non‐OECD and non‐Eurozone countries, as the impacts from government ideology on the determinant of the choice of exchange rate regime in Eurozone countries disappear. More importantly, we present many explanations for exchange rate regime choices when macroeconomic conditions, political constraints and institutions impact the choice of exchange rate regime.     

Electoral fraud, the rise of Peron and demise of checks and balances in Argentina

The future looked bright for Argentina in the early twentieth century. It had already achieved high levels of income per capita and was moving away from authoritarian government towards a more open democracy. Unfortunately, Argentina never finished the transition. The turning point occurred in the 1930s when to stay in power, the Conservatives in the Pampas resorted to electoral fraud, which neither the legislative, executive, or judicial branches checked. The decade of unchecked electoral fraud led to the support for Juan Peron and subsequently to political and economic instability.     

Perceptual differences in corporate philanthropy motives: a South Korean study

We studied what types of motives South Korean consumers and corporate giving officers attributed to corporate philanthropy (CP). Results showed gaps between consumers and corporate giving officers in that consumers more firmly believed corporations conducted CP for profit‐driven motives than did corporate giving officers, whereas the corporate giving officers more strongly perceived that corporations engaged in CP for altruistic motives. Based on these findings, we discuss managerial implications for practitioners. Copyright © 2011 John Wiley & Sons, Ltd.     

The testable implications of zero-sum games

We study collective choices from the revealed preference theory viewpoint. For every product set of individual actions, joint choices are called Nash-rationalizable if there exists a preference relation for each player such that the selected joint actions are Nash equilibria of the corresponding game. We characterize Nash-rationalizable joint choice behavior by zero-sum games, or games of conflicting interests. If the joint choice behavior forms a product subset, the behavior is called interchangeable. We prove that interchangeability is the only additional empirical condition which distinguishes zero-sum games from general non-cooperative games.     

National economic disparity and cross-border acquisition resolution

This paper explores the effects of national economic disparity on the completion or abandonment of cross-border acquisitions by combining behavioral perspectives of risky decision making and theories of organizational learning. Using a sample of 2445 cross-border acquisitions announced between 1985 and 2008, we show that an acquisition is less likely to be completed when the acquirer is from a more developed country vis-a-vis the target than when the acquirer is from a less developed country. Furthermore, the higher the economic development level of the acquirer’s country relative to that of the target, the less likely the deal is to be completed. We also find that the time elapsed between the acquisition announcement and completion dates is shorter as the economic development level of the acquirer’s country relative to that of the target is higher.     

CROSS‐COUNTRY TECHNOLOGY TRANSFER AND POLITICALLY DRIVEN INTERNATIONAL AGREEMENTS FOR ENVIRONMENTAL STANDARDS

Grossman and Helpman highlighted a political framework to internalize inefficiency incurred due to unilateral trade policy implementation by sovereign countries. This paper extensively adopts their framework to explore the effects of special interest politics on governments under negotiation to forge international environmental standards to control global emission. Particular attention is given to a case in which negotiation is driven by transferring the abatement technology. Within a specific factor model of international trade, improving the abatement efficiency through technology transfer can give the most mutually beneficial outcome, achieving the lowest level of global pollution compared to other political benchmarks.     

An integrated approach for port selection,ship scheduling and financial analysis

Ship routing and scheduling is an important activity for ship operators at both planning and operation levels. Ship operators, as commercial entities, have to closely monitor routing and scheduling in relation to their financial implications. This paper presents an integrated approach for port selection, ship scheduling and financial analysis. It aims to discuss the architecture and the major features of an integrated intelligent system for liner shipping. Currently many liners still perform ship routing and scheduling manually based on professional knowledge and experience. The proposed system is developed with an international liner company and is flexible to account for user inputs according to the real situation in the port selection module. Also the system provides two modes in the scheduling module: automatic and manual. The automatic mode makes use of an optimisation model to find the optimal proforma schedule (PFS). The manual mode allows manual modifications to be performed to accommodate the existing liners to allow for a smooth implementation. The financial analysis module examines the financial consequences of the PFS which are crucial for making commercial decisions. As a whole, the solution algorithm calls for an integrated approach that can integrate data from various sources with different levels of certainties and accuracies, knowledge gained from practical operations and optimisation routines. The system will be useful for ship operators in liner shipping.     

Estimating the factors determining the demand for induced abortions among married women in Taiwan

This paper purports to estimate the characteristics of women who had experiences of abortion in 1991 based on an economic model of fertility. The study makes use of a national survey on the knowledge of, attitude towards, and practice of family planning and reproductive health among married women in Taiwan. The results show that older women with higher family income and who live in urban areas were more likely to have the pregnancy terminated. In addition, the decision to have an abortion was negatively correlated with prior pregnancy loss, but positively associated with the number of previous live births. On the other hand, the availability of abortion services as measured by the number of legal abortion providers at city and county levels had a negative effect on the demand for abortions. The local female unemployment rate was found to be positively correlated with the woman's decision to have an abortion.