The two sides of CEO option grants at the IPO

This paper examines the impact of CEO IPO option grants on IPO underpricing. Contrary to Lowry and Murphy (2007) who do not find a relationship between the two, this paper finds such a relationship when board independence, the power of the CEO and venture capitalists (VCs) are taken into account. The results are threefold. First, powerful CEOs are able to reap substantial gains from IPO options, to the detriment of the shareholders. Second, young, powerful VCs use IPO option grants to bribe the CEO to agree to an early IPO which will leave more of the existing shareholders' money on the table. Finally, IPO options only work as a value-enhancing incentive in the presence of strong boards.     

Saving dynamics in the Asian countries

This paper investigates empirically the factors that have influenced the savings behavior in the fast growing Asian economies—Singapore, South Korea, Malaysia, Thailand and the Philippines. Both the short and long-run movements of savings are modeled during the 1960–1997. The empirical results of the analysis based on time series data may be summarized as follows: (i) foreign savings deters domestic saving both in the short and long run; (ii) savings does not Granger cause economic growth, except for Singapore; (iii) the effect of interest rate on saving in Asian countries is inconclusive and it reflects the extent of financial liberalization adopted in these countries; and (iv) in the long run the causality runs from foreign to domestic savings.     

Economic Reforms and Productive Capacity Realisation in Bangladesh: an Empirical Analysis

Using firm level data from the Bangladesh food manufacturing sector, this paper examines the impact of economic reform on productive capacity realisation in the eighties. The results suggest that although improvement occurred in the realisation of productive capacities after the implementation of economic reforms, there is, however, room for significant further improvement in increasing output by realising the unrealised capacity.     

Christian roots of capitalist civilization

A conceptual argument is offered for the centrality of religion to the structure of capitalist civilization. This centrality is documented by examples of the role of Christianity in European civilization.     

Financial Analysis of Palestinian Industry Including Small Scale Firms

The study aims to explore the financial aspects of the Palestinian industry, and to investigate productivity and efficiency of small scale industry compared with large scale firms. In order to help policy makers in industrial planning in the new emerged Palestinian state. A special instrument has been used to collect the financial and quantitative data for the related manufacturing firms from a random sample of 215 Palestinian firms. The one way analysis of variance test was used to examine whether the mean scores differ significantly among scale sizes of the Palestinian industry concerning the selected performance measures. In addition, the Scheffe test was used as a post hoc comparison way to identify which scale size firms' performance differs than the other two scale sizes.The research revealed that small scale firms in Palestinian industry have higher labor productivity values than large scale firms, while large scale firms accomplished higher net profit margin compared to small scale industry. Creating an additional job in large scale Palestinian industry needs less cost than creating a job in small scale industry, and large scale firms have better opportunity in getting external financing than small firms.     

Time-varying Cost of Equity Capital in Southeast Asian Countries

This paper investigates variation in the cost of equity capital for the Southeast Asian countries using firm-level data over the period of 1990–2004. It is found that decreases in the firm-level cost of equity capital have been associated with stock market liberalization and securities market development. The results of the present study suggest that earlier empirical evidence regarding the decrease in the cost of equity capital using country-level data cannot be generalized to different types of firms. There has been significant time variation in the cost of equity capital within countries and across firms.     

The Effects of Information Disclosure and Board Independence on IPO Discount*

This paper examines the effect of strategic information disclosure and corporate governance on the stock market performance of initial public offering (IPO) firms in France. It argues that information disclosure and board independence mitigate agency problems between the IPO firm and investors, thus reducing the IPO discount defined as the difference between the offer price and the intrinsic value of the firm. However, extensive disclosure may damage the firm's competitive advantage and lead to a curvilinear (an inverted U‐shape) relationship between information disclosure and the IPO discount. Further analysis suggests that it is not necessarily the quantity of information, but rather the type of information, that causes the IPO discount to increase with the amount of disclosure.     

Premium,merger fees and the choice of investment banks: A simultaneous analysis

We analyze 635 US M&A transactions from 1985 to 2004. In contrast with prior research, we distinguish between the target and acquirer fees, and examine their independent effects on the level of the merger premium. The study provides evidence of a positive (negative) association between target (acquirer) fees and the level of the premium. It indicates that the reputation of investment banks affects the level of merger fees, but does not affect the level of the premium. The findings confirm the conflict of interests between target and acquirer firms where the investment banks’ efforts are positively related to shareholders’ interest. The study also finds that when acquirers pay higher fees than target firms, they pay lower premiums. The findings also imply that for the small proportion of mergers (13%) resulting in relatively large value gains for buying firms, an acquirer might be willing to pay large advisory fees even though this may result in a higher premium.     

Financial Integration in the 1920s: A Cointegration Approach

Financial Integration in the 1920s: A Cointegration Approach. - This paper applies the concept of cointegration to analyze the foreign exchange market during the 1920s. The data set consists of daily spot and forward exchange rates for the U. S. dollar, French franc, Belgian franc, Italian lira and German mark, each quoted with respect to the British pound. The authors find that the future spot and forward exchange rates for the U.S., France, Belgium, and Italy are cointegrated. Using a multivariate test for cointegration, they find no evidence of cointegration across markets. There is weak evidence of cointegration among the two neighboring economies of France and Belgium.