Business reactions to the 2001 foot and mouth disease outbreak in Scotland

The paper focuses on two aspects of the 2001 foot and mouth disease (FMD) outbreak in Scotland that have been largely ignored: first, business managers perceptions of the impact of FMD during and immediately after the outbreak; and second, reactions to the outbreak in terms of action taken by businesses and advice sought. A panel survey of non-farm businesses conducted in April, June and September of 2001 is analysed to shed light on these issues. We find that even at the time, the vast majority of businesses did not report any real impact, although businesses in rural areas and in the tourism industry were more likely to feel some impact - either positive or negative. We show that business managers appeared to favour private sources of advice, although some public sources were found to be very useful, and that some actions, such as increased advertising in tourism businesses, could be more effective than others, such as making redundancies. We conclude with a discussion of the implications of the findings for contingency planning in the event of future FMD outbreaks.     

The role of corporate governance in meeting or beating analysts’ forecast

Meeting or beating analysts’ forecasts is a topic of considerable interest in the academic and business communities. Some studies indicate a favorable market response when firms meet or beat analysts’ earnings forecasts, but others suggest managers opportunistically manage earnings to achieve earnings targets. We investigate the relation between corporate governance mechanisms and meeting or exceeding analysts’ expectations and find that attributes of corporate governance are related to the likelihood of consistently meeting or exceeding consensus forecasts. We extend current literature by showing that some attributes of strong corporate governance mechanisms lower agency costs associated with consistently meeting or beating analysts’ expectations. We also find that compensation committees reward managers for consistently meeting or beating analysts’ forecasts.     

Corporate governance,accounting and finance: A review

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.     

Structure and Ownership of East German Enterprises

This paper investigates the process by which East German enterprises have been privatized and their resulting ownership and control structure. A corporate system with a very high level of concentration of ownership has been created. This is particularly closely associated with ownership and direct control by West German companies. The paper argues that this has allowed East German enterprises to gain access to finance, markets, and managerial skills which they might otherwise have been denied. The resulting "insider" system of corporate control will over time allow East German companies to participate in the control of their own and West German companies. The Treuhandanstalt has organized the privatization process to achieve certain industrial and social objectives. It has broken up the large multiplant enterprises to an extent that East German enterprises are now smaller than their West German counterparts. It has used informal liquidations rather than formal bankruptcies to be able to achieve its objectives. Privatizations have not involved the flotation of companies on the stock market. Instead, the Treuhand has arranged share and asset transfers on a scale which is in excess of merger activity commonly observed in the West. J. Japan. Int. Econ., Dec. 1995, 9(4), pp. 426–453. University College London, Wissenschaftszentrum Berlin, and CEPR; Oxford University and CEPR     

Will East Germany Become a New Mezzogiorno?

Despite massive regional policy efforts, GDP per capita in Southern Italy has only briefly converged on Northern Italian levels in the 1960's. Failure of convergence since then is associated with a policy switch from investment toward income maintenance, with reduced wage sensitivity to regional labor market conditions and with increases in rent-seeking opportunities and corruption. East Germany's early experience of rapid wage and income, but not productivity, convergence raised fears that aMezzogiornoscenario could be repeated. Since then, however, investment and productivity have risen while wage setting has become more flexible. Given East Germany's greater “social capability” for growth, and provided that investment continues to be encouraged, the prospects for convergence are now more promising.J. Comp. Econom.,June 1997,24(3), pp. 241–264. Magdalen College, University of Oxford, Oxford OX1 4AU, United Kingdom; University College London, London WC1E 6BT, United Kingdom; and School of Oriental and African Studies, University of London, London WC1H 0XG, United Kingdom.     

Twenty-fifth international atlantic economic conference April 16–22, 1988 London,England

Twenty-fifth international atlantic economic conference April 16–22, 1988 London, England     

Trading cost expectations: Evidence from S&P 500 index replacement stock announcements

This paper tests the effect on stock value of an expected change in future trading costs. The capitalized value of a reduction in trading costs is hypothesized to increase the stock value, a trading cost effect. Improved liquidity reduces trading costs. Inclusion as an S&P 500 Index replacement stock is an event hypothesized to increase liquidity. We use 114 observations between January 1, 1983 and October 12, 1989 of stocks added to the Index as replacements for stocks removed. The abnormal return of each stock is regressed against the ratio of the bidask spread to the price of the stock, the change in trading volume of the stock, and the open interest in the Index futures contracts at the close of the month prior to the replacement announcement. We find that the positive abnormal returns for replacement stocks are related to increased daily trading volume after inclusion in the Index. Further, the trading cost effect is proportional to percentage bid-ask spreads prior to inclusion. The trading cost effect increases as trading in derivatives of the Index increases. The volume and stock price changes after replacement are not transitory, indicating an improvement in liquidity. Three alternate hypotheses suggested in prior research to explain the abnormal returns for replacement stocks are tested. Testing each of the three models previously considered: price pressure, inelastic demand curves, and information, we find that none can be accepted with statistical confidence. The abnormal returns of Index replacement stocks are consistent with rational pricing of an anticipated reduction in future transaction costs. This anticipated reduction is capitalized in the value of the stock at the time of the replacement announcement. These results are consistent with a trading cost effect.     

Developing Inclusive Communities of Learners in Technology Education: Practical Craft Skills - Facilitator or Hindrance

This paper examines the rationale for the Woodworking Skills section of a course on Practical Craft Skills which forms part of the new technology curriculum in Scottish Schools. Introduced with the intention of making technology subjects more accessible to a wider range of pupils, the subject has potential for contributing to a more inclusive environment in secondary schools. The practical nature of the subject, moreover, should, in theory at least, have been able to contribute particularly well to the development of a community of practice (Wenger, 1998).In education, however, practice does not always reflect theory nor reality reflect the rhetoric. This paper examines the assumptions underlying the pedagogy and assessment methods outlined in the rationale for the subject in relation to current theory and concludes that a valuable opportunity for creating an inclusive community of learners has been missed. Whilst the paper focuses on the Woodworking Skills area of the course, other areas reflect a similar framework.     

Initial Steps in High-Frequency Modeling of China

This paper presents the first step in building a forecasting model of Chinas GDP. Being constrained by a statistical history that effectively begins in 1993, it uses high frequency data and principal components analysis to construct a single-equation model that generates elasticities and is applied to two-quarter-ahead forecasts. Initial results suggest a gradual deceleration of growth, consistent with Chinese government policy.A version of this paper was presented as part of Lawrence R. Kleins Adam Smith Award Address at the NABE Annual Meeting, October 4, 2004. The Adam Smith Award Address was sponsored by Global Insight.JEL Classification C5,O53     

Domestic Content and Compensatory Export Requirements: Protection of the Motor Vehicle Industry in the Philippines

The motor vehicle industry in the Philippines is protected bya virtual embargo on the importation of new vehicles but operatesunder the burden of domestic content and compensatory exportrequirements that protect Philippine producers of automotivecomponents. This article develops a model to assess the netimpact of this complicated protective regime. Estimates indicatesubstantial benefits to the assembly and components industriesand losses to vehicle purchasers. Reform of the system to eliminatethe embargo as well as the domestic content and compensatoryexport restraints at current tariff rates would benefit vehiclepurchasers but would increase the effective rate of protectionto assembly operations by decreasing prices of components. Reformmeasures to eliminate the domestic content and compensatoryexport requirements should be accompanied by simultaneous reductionsin tariffs on assembled vehicles.