Foreign Acquisitions in the United States and the Effect on Shareholder Wealth

The research presented here indicates that foreign acquisitions in the United States in the form of mergers, have resulted in abnormal returns to targets of nearly 22 percent, a figure not much higher than in domestic mergers. Sell-off abnormal returns have averaged nearly three percent, substantially higher than the average 0.7 to 1.66 percent in the domestic case. We find that merger abnormal returns have been substantially higher in our first subperiod (1982–84) than in the second (1985–87). For selloffs, our results are reversed-abnormal returns have been higher in the second subperiod. In cross-sample tests, we find the Japanese paying the highest merger premiums/abnormal returns, while the sell-off abnormal returns are highest when Germans are the buyers. We also find significant differences across industry samples but not across combination type samples. We do not find a significant relationship of these abnormal returns to the firm's accounting and financial variables.     

Unravelling supply and demand factors in work-related training

This paper attempts to unravel supply and demand factors ofwork-related training by exploiting information from workerswho wanted to receive such training but did not get it Workers'willingness to receive training varies with their level of education,background characteristics, and job characteristics. Firms'gains from training vary across industries, and with workers'gender and age. Half of the untrained workers are not trainedbecause the net returns to the worker would be negative, whilethe net returns to the firm would be positive. For another thirdof the untrained workers exactly the opposite is the case.     

Labour reform in a neo-liberal ‘protected’ democracy: Chile 1990–2001

This paper analyses the direction and degree of labour reform in Chile since the restoration of democracy in 1990 after seventeen years of military dictatorship. The regime of General Augusto Pinochet (1973–90) adopted a highly repressive political character and implemented neo-liberal economic policies, which, together with the institutional restructuring that accompanied them, transformed vast sectors of Chilean society. The 1979 Labour Plan significantly changed the character of industrial relations legislation and the roles and balance of power among social actors, transforming the way in which industrial relations had been conducted since the 1920s. We argue that, despite more than a decade since the restoration of democracy, and after several rounds of reform, the current legislation presents remarkable continuity with the one enacted under authoritarianism, contradicting claims that profound change has been achieved. In attempting to explain the direction and degree of the so-called Transition's Labour Reforms, we emphasize the importance of political-economy approaches. We explore the conservative nature of the Chilean transition to democracy, the continuity of the neo-liberal economic model and the increasing imbalance of power between capital and labour, in an effort to account for the persistence of the authoritarian legacy in today's Chilean industrial relations.     

Adverse Selection and the Demand for Supplementary Dental Insurance

In 1995 dental services were excluded from the compulsory health insurance package that covers the families of all Dutch employees in the market sector with incomes below a certain threshold. People had to choose between no insurance and supplementary insurance. The exclusion of dental services was unexpected and was accompanied by a generous acceptance policy and almost uniform premiums. Due to these features the exclusion constitutes a natural experiment to investigate whether customers with poorer teeth conditions are more likely to buy insurance. This is a key condition for adverse selection to matter. The empirical results show that adverse selection indeed occurs; individuals with poor teeth condition are more likely to choose insurance. The same holds for customers with more frequent visits in the past. Differences in prices play some role, whereas differences in income do not.     

The impact of entrepreneurship education on entrepreneurship skills and motivation

This paper analyzes the impact of a leading entrepreneurship education program on college students’ entrepreneurship skills and motivation using an instrumental variables approach in a difference-in-differences framework. We exploit that the program was offered to students at one location of a school but not at another location of the same school. Location choice (and thereby treatment) is instrumented by the relative distance of locations to parents’ place of residence. The results show that the program does not have the intended effects: the effect on students’ self-assessed entrepreneurial skills is insignificant and the effect on the intention to become an entrepreneur is even negative.     

Hedging of a credit default swaption in the CIR default intensity model

An important issue arising in the context of credit default swap (CDS) rates is the construction of an appropriate model in which a family of options written on credit default swaps, referred to hereafter as credit default swaptions, can be valued and hedged. The goal of this work is to exemplify the usefulness of some abstract hedging results, which were obtained previously by the authors, for the valuation and hedging of the credit default swaption in a particular hazard process setup, namely, the CIR default intensity model.     

The Market Model of Interest Rate Dynamics

A class of term structure models with volatility of lognormal type is analyzed in the general HJM framework. The corresponding market forward rates do not explode, and are positive and mean reverting. Pricing of caps and floors is consistent with the Black formulas used in the market. Swaptions are priced with closed formulas that reduce (with an extra assumption) to exactly the Black swaption formulas when yield and volatility are flat. A two–factor version of the model is calibrated to the U.K. market price of caps and swaptions and to the historically estimated correlation between the forward rates.     

Quality of visitor attractions,satisfaction, benefits and behavioural intentions of visitors: verification of a model

This study is an attempt to verify a model of relations between motivation, quality of product of attraction, benefits, satisfaction and behavioural intentions of visiting people. The data for the analysis were collected from 1770 visitors in four tourist attractions of the Wielkopolska and Kujawy regions. It was noted that the effect of performance of service provider on behavioural intentions takes the route through benefits gained by the visitors. Benefits have a stronger total effect on behavioural intentions than visitors' satisfaction. Copyright © 2008 John Wiley & Sons, Ltd.