Odd‐lot Costs and Taxation Influences on Stock Dividend Ex‐dates

Abstract:   Past research has revealed significant abnormal ex‐date returns for stock dividends even though the ex‐date is known in advance and the distribution contains no new information. Various researchers have suggested that the higher transaction cost of selling odd‐lot share parcels compared to round‐lot share parcels is a key driver in the abnormal returns. However, no study to date has directly compared the ex‐date price reaction of stock dividends distributed when odd‐lot transaction costs were charged to those issued when odd‐lot costs were not evident. As odd‐lot trade costs were eliminated from the New Zealand Stock Exchange on 1 October, 1991, the New Zealand market provides a unique opportunity to directly test the role, if any, that odd‐lot transactions costs have in explaining stock dividend ex‐date returns. We find that prior to October 1991 stock dividend ex‐dates exhibit significantly positive returns, however, we do not find any significant ex‐date return once the higher odd‐lot transaction costs were removed. The New Zealand market also enables us to examine an imputation tax based argument of the ex‐date price reaction and we find evidence that imputation tax credits have a value greater than zero.     

Weak Spots in Business Ethics: A Psycho-Analytic Study of Competition and Memory in Death of a Salesman

The field of business ethics has shown little attention to the dynamics of memory in maintaining moral character. Yet memory is a complex process that involves the repression of some experiences in order to protect the moral integrity of the personality. Without the capacity to repress what one's moral conscience would not accept, the mind can be overtaken by neurotic ambivalence and moral confusion. In the context of business competition, where the pressures for potential gains and losses can be immense, long repressed desires can receive renewed strength resulting in a weakening of moral constraint.In this essay, I use the psycho-analytic theory of repression to investigate the complex, psychological vicissitudes of human memory. The theory of repression is a particularly powerful tool to investigate the moral implications of memory because memories which are repressed – i.e., forbidden consciousness – are done so at the behest of the individual's moral ideals. Experiences that offend these ideals or threaten the integrity of the ego can be repressed. Repression, then, is an infallible index of moral judgement.I will apply the theory of repression to the characters in and story line of Arthur Miller's play Death of a Salesman to elucidate the relationship between memory and ethics in business. Death of a Salesman is well suited for this purpose because the memories of the main characters are central to the play and are inextricably linked to the moral challenge competition in business poses.     

Index fund rebalancing and market efficiency

Stocks newly added to the S&P 500 Stock Index experience significantly positive abnormal returns on the date of their inclusion. This study looks at the rebalancing required by index funds when RJR/Nabisco was replaced by First Union. On that date, approximately one percent of the market capitalization was removed and had to be reallocated among the remaining 499 stocks in the Index, but there was no change in information or attention for these 499 stocks. We find that while there was abnormal trading volume on the original takeover date, there were no abnormal returns. The only hypotheses consistent with previous results, as well as these results, are the information or the attention hypotheses, that stocks newly added to the index have positive information disclosed or experience increased investor attention.     

Some comments on the possibility of “Methodological indeterminacy”

This article is an attempt to analyze the implications for research in the human sciences of the topic of “indeterminacy”. Reviewing an aspect of the issue from the philosophy of social science, the author argues that the debates at the philosophical level often overlook or underestimate the importance of methodological approaches. While the philosophical issue of indeterminacy remains a vexing problem in the social sciences since it was raised by Quine, the article argues that at least a partial resolution of the issue is possible if it is viewed within the context if differing methodological approaches.     

A cross-cultural comparison of the ethics of business students

The ethical tendencies of university business students from the USA, Denmark, and New Zealand were examined by analyzing their reactions to ethical dilemmas presented in a set of ethical problem situations. These dilemmas dealt with coercion and control, conflict of interest, physical environment, paternalism and personal integrity. Findings indicate that students' reactions tended to be similar regardless of their country. A comparison of these findings to practicing managers indicated that students and practicing managers exhibit a similar degree of sensitivity to ethical dimensions of business decision-making. Implications are drawn for business education and further research. Steven Lysonski is an Associate Professor at Marquette University, Milwaukee, Wisconsin. He is a former member of the marketing faculty at the University of Canterbury, Christchurch, NZ and the University of Rhode Island at Kingston. In addition to presenting research to more than 30 academic conferences, he has published widely in such journals as the Journal of Marketing, The European Journal of Marketing, the International Journal of Advertising, the Journal of Product Innovation and Management and Psychological Reports. His research interests focus on product management, international issues of marketing, and ethical implications of marketing. William Gaidis is an Assistant Professor at Marquette University, Milwaukee, Wisconsin. He has published articles in the Journal of Marketing, the Journal of Consumer Affairs, and other journals and academic conferences. His research interests focus upon decision-making, strategic-implementation problems, and business ethics.     

Forging relationships with services: The antecedents that have an impact on behavioural outcomes in the life insurance industry

The extent to which service quality is linked to satisfaction, value and behavioural outcomes continues to be debated in the literature. This research investigated two models involving the linkages between service quality, satisfaction, perceived value, repurchase intention and willingness to recommend to others. The life insurance industry was chosen as the industry for investigation since it is virtually a pure service with little tangibility and high credence properties. Data were collected in Singapore in response to concerns about broadening understanding of these variables cross-culturally. Results of path analysis indicate that service quality has an indirect relationship with behavioural outcome measures via satisfaction and value. The study found that satisfaction was positively associated with customers' re-purchase intentions but its relationship with customers' willingness to recommend to others was relatively weak. This finding has important marketing implications as word-of-mouth has previously been found to have significant influence on customers' purchase decisions.     

Accruals Management, Investor Sophistication, and Equity Valuation: Evidence from 10–Q Filings

The release of the full set of financial statements in Form 10–Q provides investors with the data necessary to estimate the discretionary portion of earnings, thereby allowing them to better assess the integrity of reported quarterly earnings. We thus expect a negative association between unexpected discretionary accruals estimated using 10–Q disclosures and stock returns around 10–Q filing dates. Consistent with our expectations, we document a negative association between unexpected discretionary accruals and cumulative abnormal returns over a short window around the 10–Q filing date. Furthermore, this association varies systematically with investor sophistication. Finally, results from portfolio tests indicate that this association is economically as well as statistically significant. One interpretation of our findings is that accruals management has substantial valuation consequences, which are quickly impounded into stock prices.