Methodology in International acquisitions: An exploratory study

There has been relatively little empirical research into international acquisition methodology; this article examines several strategy and methodology issues through an exploratory approach based mainly on seven detailed case studies of UK-based companies. The research suggests, inter alia, that there has been greater concentration not only in terms of product categories but also in geographic markets, that the companies had well-established acquisition and country screening criteria and that for important acquisitions there is concern to achieve a detailed ‘strategic fit’. The article concludes by making tentative recommendations for company management regarding acquisition analysis.     

Forecasting the extent of the HIV/AIDS epidemic.

This paper has a dual objective: (1) to describe the current status of the structure of a newly developed model system to generate a wide span of U.S. HIV/AIDS estimates; and (2) to implement that system through the development of a dataset of HIV/AIDS incidence and prevalence, by stage, in the U.S. for a range of past and future years. There are many uncertainties regarding the anticipated effects of HIV/AIDS; examination of many of these effects indicates multiple societal difficulties. The characteristic of AIDS-growth is that of a long-delayed but inexorable disabling morbidity "taking off" in 1991-1992 from an HIV population widely thought to be 1.0-1.5 million spread throughout the Nation. Although widely dispersed, its impact, even at this early stage of growth, is to endanger the health and social support systems of our urban centers. The spread of AIDS cases into the smaller cities and rural counties indicates that those problems will not be limited to our major cities. This paper provides new and purposely pessimistic estimates of the levels of prevalence and incidence of HIV/AIDS for future years, based on U.S. AIDS cases reported. Although these numbers are essentially upper bounds, their values are consistent with the upper sides of some recent broad band projections released in early Summer 1989 by the U.S. Government Accounting Office (GAO). However, our estimation has generated data within a more proscribed range. A first set of forecasts has been provided to the State of Virginia's Department of Health for their use in statewide resource planning. The United States and the world face a severe HIV pandemic in the coming decade. The certainty of the threat is acknowledged by all of the major private and public medical authorities and institutions. Yet, to date, no official projection of the emergence, the level, and the sweep of the epidemic has been accepted by the medical community. And, there is certainly little agreement on the impact on the delivery of health care services in the United States and Canada, as well as throughout the world. On 26 June 1989, the U.S. GAO released a report that concluded, in part, that the Federal government's official data [e.g. from the Centers for Disease Control's (CDC) Morbidity and Mortality Weekly Report (MMWR) of 12 May 1989] were greatly understating the epidemic's extent. Specifically, the CDC's estimate of 185,000-320,000 (cumulative) cases of AIDS expected to be reported by the end of 1991 contrasted with GAO's estimate of 300,000-480,000.(ABSTRACT TRUNCATED AT 400 WORDS)     

Nonprofit executive incentive pay

We utilize information only recently disclosed on Form 990 to examine the use, and consequences of, incentive pay at nonprofit organizations. Bonuses are common in nonprofits, as we observe that approximately 45% of the 44,000 organization-year observations in our sample reported paying CEO bonuses. We find that the bonuses are positively associated with profitability, competition from other nonprofits, firm size, available cash, and use of compensation consultants and committees, while negatively related to board oversight, donations, and grants. Our results also suggest that donors look unfavorably at the payment of bonuses; that is, bonuses are associated with lower future donations. Nonetheless, we find evidence consistent with the payment of bonuses incentivizing nonprofit executives, as despite reduced fundraising, future profitability and program services are positively associated with current bonus compensation.     

Financial analysts and price discovery

We show that whether or not a bank/brokerage firm has top‐rated financial analysts and high Wall Street Search rankings for their research is significantly related to that firm's contribution to price discovery, the process by which information is incorporated into stock prices. Our study relates cross‐sectional characteristics of the quality of brokerage research, the asymmetric information environment, and order flow volume to a microstructure measure of price discovery developed by Granger and Gonzalo. We measure analysts’ research quality with an industry‐specific ranking by institutional investors, with an opinion survey of trading desk personnel, and with the number of top 3 analysts across all industries employed by the bank/brokerage firm.     

Factors influencing foreign direct investment of South African financial services firms in Sub-Saharan Africa

This research investigates the key elements that South African financial services firms consider before making foreign direct investments in Sub-Saharan African (SSA) markets. The results show that South African financial services firms are most strongly influenced by the political and economic stability of the country in question as well as the profitability and long-term sustainability of its specific markets. The degree of available infrastructure in terms of Information and Communication Technology as well as the existence of credible financial systems was also viewed as highly important considerations before investing in SSA. Given the uncertainty and ambiguity of most SSA markets many South African financial services firms prefer to enter existing markets via a majority stakeholder joint venture with a local partner or via a new investment if the market does not currently exist. The nature of the financial services firm also seems to influence the entry method and once in a new country most firms seem to prefer a full service presence. Additionally, the key motives cited for expansion northward were to broaden revenue bases and improve profit margins as well as to stay close to local customers.     

Modeling Newspaper Advertising

Mathematical modeling is recognized as a powerful tool for planning business operations. The purpose of this paper is to present a mathematical model for simulating a newspaper financial system. The model was developed from actual newspaper industry data and includes the effects of advertising and circulation. The use of the model to predict advertising linage as a function of population, income and advertising rate is included in the discussion.     

News and notes

New Perspectives on Technology and Organization.

Innovative Banking: Competition and the Management of a New Networks Technology J. Howells &; J . Hines Eds) Ldon, Routledge, 1992, 252pp., £40.00 (hbk), ISB-V 0-415-05941-0. Technology and Organization: Power, Meaning and Design H. Scarborough &; J.M. Corbett London. Routledge. 1992, 178pp., ,£15.00, (pbk), ISBN 0-415-05941-0.

Beyond Partnership-Strategies for Innovation &; Lean Supply Richard Lamming Hemel Hempstead, Prentice-Hall International, 1993, ix + 299pp., £19.95 (hbk).

From Anticipation to Action: A handbook of Strategic Perspective Michel Godet.     

The effect of inflation on growth

The paper examines the effect of inflation on growth in transition countries. It presents panel data evidence for 13 transition countries over the 1990–2003 period; it uses a fixed effects panel approach to account for possible bias from correlations among the unobserved effects and the observed country heterogeneity. The results find a strong, robust, negative effect on growth of inflation or its standard deviation, and one that appears to decline in magnitude as the inflation rate increases, as seen for OECD countries. And the results include a role for a normalized money demand in affecting growth, as well as for a convergence variable, a trade variable and a government share variable. Robustness of the baseline single‐equation model is examined by expanding this into a three‐equation simultaneous system of output growth, inflation and money demand that allows for possible simultaneity bias in the baseline model.