On the necessity of solving the free rider problem in takeover bids

Previous analysis of the free rider problem in takeover bids has concluded that complex takeover strategies, nonprice taking behavior, taxes, or exogenous exclusion of minority shareholders are necessary for the bidder to profit from a takeover bid. In contrast, in this study, costs of disclosure and the fungible nature of the bidder's information mitigates the detrimental consequences of the free rider problem. The absence of the free rider problem in takeover bids has important implications for optimal bidding strategies, the interpretation of mechanisms posed as solutions to the free rider problem, and the analysis of regulation of takeover activity.     

Cross-cultural management of labour in a Thai environment

The inexperienced cross-cultural manager may be seriously misled when he interprets Thai labour processes using assumptions drawn from other societies. On these assumptions Thai labour processes seem unsophisticated and exploitative. Despite power differences, which can be exploited, Thais believe that a coincidence of interest between the parties is the norm. That rests upon the productive significance which they attach to harmonious workplace interactions, which in turn explains an emphasis upon company level dialogue, and a distrust of formal or legalised procedures. Although the dangers of unstructured relationships are recognised, labour analysts are cautious about relinquishing the advantages of traditional relationships.     

Identifying Term Structure Volatility from the LIBOR-Swap Curve

This paper proposes a new family of specification tests andapplies them to affine term structure models of the London InterbankOffered Rate (LIBOR)-swap curve. Contrary to Dai and Singleton(2000), the tests show that when standard estimation techniquesare used, affine models do a poor job of forecasting volatilityat the short end of the term structure. Improving the volatilityforecast does not require different models; rather, it requiresa different estimation technique. The paper distinguishes betweentwo econometric procedures for identifying volatility. The "cross-sectional"approach backs out volatility from a cross section of bond yields,and the "time-series" approach imputes volatility from time-seriesvariation in yields. For an affine model, the volatility impliedby the time-series procedure passes the specification tests,while the cross-sectionally identified volatility does not.This is surprising, since under correct specification, the "cross-sectional"approach is maximum likelihood. One explanation is that affinemodels are slightly misspecified; another is that bond yieldsdo not span volatility, as in Collin-Dufresne and Goldstein(2002).     

Government Expenditures and Revenues: Evidence from Asymmetric Modeling

In this article, we examine the relationship between U.S. federal revenues and expenditures while relaxing the assumption of a symmetric adjustment process underlying the conventional cointegration and error correction model. Threshold autoregression and momentum threshold autoregression models are used to ascertain the empirical link between the two variables of the budgetary process. Our results suggest that revenues and expenditures are cointegrated and that the adjustment process of the budgetary disequilibrium is asymmetric. The application of the asymmetric error correction model indicates that revenues and expenditures respond to the long-run requirements of the budgetary balance only when the budget is worsening.     

Financing port infrastructure

Port infrastructure is essential for the conduct of trade and tourism between countries. This paper aims at investigating the financial strategies used for port projects, project financing, and cash flow techniques used by Los Angeles Airport and Seaport and Long Beach Seaport and European airports and seaports in England, The Netherlands, Belgium, Germany, Greece, and Turkey.Research assistance was provided by Kelly Calabio, Danny Davis, Adam Harita, Carina Lim Dancer, Mary Mulligan, James Nakamura, Evelyn Sellers, and Patty Vajda.     

Time Integration: Agribusiness Structure for Competitive Advantage

Traditional views and models of perishable food suppliers fail to capture the fundamental role of time integration in firm-level organization. A two-phase research design of major grower–shipper firms of lettuce, tomatoes, and melons reveals a diverse distribution of firms across the time-integration continuum. Most firms use more than one microclimate to extend product availability. Decision makers are encouraged to understand the implications of these temporally integrated organizations on agricultural and trade policy.     

Why World Oil Monopolization Lowers Oil Prices: A Theory of Involuntary Cartelization

This paper first shows that, in the absence of long-term production commitments, time-consistent monopolistic sellers of a wasting natural resource will underconserve their resource. Since the present values of the profits of these uncommitted monopolists are generally much lower than under competition, the only rational explanation for the persistent recurrence of such monopolies in the oil industry is the high profits to current generations of oil buyers, who unite to establish such a producer monopoly. The victims of such a monopolistic cartel, besides future generations of consumers, are the producers who must involuntarily expand their current productive capacities in order to benefit the cartel leaders, who stand to benefit from the higher future prices. OPEC, rather than being a monopolistic cartel, is an excess-capacity cartel, one that has been induced by current generations of buyers to supply sufficient excess capacity to efficiently accommodate their prospective future emergencies.     

Measuring Factor Abundance Across Many Factors and Countries

Empirical studies of factor proportion theory face the challenge of measuring factor abundance in a world with many factors of production and countries. This paper introduces a mean weighted measure of factor abundance, and using data for nine factors and 33 countries, presents the resulting factor abundance rankings. These rankings, unlike others in the literature, are quite sensible. Further, there is a positive empirical link between factor abundance and factor content for each factor except agricultural labor.