Management buy-outs,trade unions and employee ownership

Management buy-outs developed rapidly throughout the 1980s in the UK and continental Europe. The shift to managerial and employee ownership involved, has major implications for trade unions and industrial relations. This article examines these issues using survey and case study evidence from the UK.     

Residental energy use: An investigation of consumers and conservation strategies

It is often assumed that energy conservation in the domestic sector can be achieved by technical innovation and higher prices supported by media exhortation. This paper argues that the impact of such policies is influenced by both consumers' personal characteristics and the structural or contextual conditions confronting them. The concept of energy literacy is described and shown to be related to energy saving behaviours and housing tenure, a contextual barrier for tenants given the nature of present energy conservation strategies.A field experiment is reported in which savings in household energy consumption were achieved by a strategy involving motivation, information, and consumption feedback. By itself, consumption feedback had no effect. It is concluded that energy conservation policy must take account of consumers' personal and contextual characteristics and aim to improve both energy literacy and structural conditions. In achieving the former, strategies which involve personal advice and generate the involvement of the consumer may have more impact than mass media campaigns.

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Häuslicher Energieverbrauch: eine Untersuchung von Verbrauchern und von Strategien zur Energieeinsparung

Zusammenfassung Häufig wird angenommen, daß häusliche Energieeinsparung am besten durch eine Kombination baulicher Maßnahmen zur Gebäudeisolation, finanzieller Anreize, höherer Energiepreiser und von Kampagnen in den Medien erreicht werden kann. Bisher haben solche Maßnahmen jedoch nur wenig Erfolg gehabt. Wenn die Massenmedien auch das allgemeine Bewußtsein für Energiefragen angeregt haben, so werden diese Fragen doch nur von einer bestimmten Verbrauchergruppe deutlich gesehen — von wohlhabenden Besitzern von Wohnungseigentum. Einsparungen, die möglich sind, sind jedenfalls bisher noch nicht realisiert. Die Gründe dafür liegen in persönlichen und situativen Voraussetzungen bei den Verbrauchern.Der Beitrag besteht aus zwei Teilen. Teil I berichtet über eine Umfrage, in der ermittelt werden sollte, welche Verbrauchereigenschaften zum Energiebewußtsein beitragen und ob das Energiebewußtsein auch den tatsächlichen Energieverbrauch beeinflußt. Eine wichtige Variable ist der Hausbesitz. Geringeres Energiebewußtsein bei Mietern wird darauf zurückgeführt, daß Mieter weniger Handlungsspielraum haben und nur wenig Vertrauen in die Erfassung des tatsächlichen eigenen Energieverbrauchs haben.Teil II berichtet über ein Feldexperiment zur Wirkung von Maßnahmen, die eine tägliche Rückmeldung des eigenen Energieverbrauchs liefern, von solchen, die über individuelle Möglichkeiten der Energieeinsparung informieren, und von kombinierten Informations-und Rückmeldungs-Maßnahmen. Drei entsprechende Versuchsgruppen wurden mit einer vierten Kontrollgruppe einer 2×2 Varianzanalyse unterzogen. Informationsmaßnahmen führten zu einer signifikanten Verringerung des Heizenergie-Verbrauchs. Rückmeldung alleine führte zu keiner nennenswerten unmittelbaren Einsparung, regt aber das Interesse am eigenen Energieverbrauch an und hilft in Verbindung mit Informationsmaßnahmen dabei, die effektivsten Einsparungsmöglichkeiten zu finden.Die Ergebnisse legen nahe, daß durch persönliche Beratung und Motivierung des einzelnen Verbrauchers mehr erreicht werden kann als durch Kampagnen in den Medien.

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George Gaskell is a Lecturer and Richard Pike is a Research Assistant at the Department of Social Psychology, London School of Economics, Houghton Street, Aldwych, London WC2A 2AE, England. The research was supported by a grant from the Energy Panel of the Social Science Research Council.     

THE NEW LEVERAGED LOAN SYNDICATION MARKET

Over the past ten years, commercial lending has been transformed from a one-off, bilateral "market" in which issuers maintained one or more separate banking relationships into a capital market in which one or more underwriters structure and price loans for syndication to groups of investors. This market-driven evolution has been most dramatic in the leveraged lending segment (defined as loans priced at LIBOR plus 150 basis points or more), where wide margins have attracted a large and growing field of underwriters, intermediaries, and investors.
Liquidity is the overriding theme in today's syndicated loan market, making the market a more user-friendly one for corporate borrowers and deal sponsors. As a result, a record number of corporate issuers are taking advantage of the syndicated loan market to finance strategic transactions or simply to reduce their borrowing costs. Deal sponsors, too, are tapping the market to finance leveraged buyouts, recapitalizations, and acquisitions at a pace not seen since the late 1980s. But, although acquisition pricing has reached cash flow multiples that recall those of the late '80s, equity contributions by sponsors are larger and credit structures are more conservative.
For banks and other investors, reduced loan pricing and more flexible credit structures have been balanced by much greater access to a large volume of diversified assets, as well as the ability to manage asset-specific and portfolio risk more effectively. As a result of more effective portfolio management strategies, lenders today are less vulnerable to credit problems with individual issuers or a given industry segment, and the bank market as a whole should be much less subject to disruption than it proved to be in the early 1990s.     

The relationship between rents and prices of owner-occupied housing in Taiwan

This article analyzes the changes of equilibrium rent and equilibrium price of owner-occupied housing in Taiwan, and also computes the rent multiplier and its trend in the past ten years in Taiwan to show how the housing consumption and housing investment change. A hedonic rent equation and a hedonic housing price equation are built first. Then, we apply the Housing Survey Report data from 1979 to 1989, and employ ordinary-least squares method to estimate the two equations. Using estimated coefficients of the two equations, we compute the market rents for owner-occupied housing and the market prices for rental housing. Finally, the rent multipliers are calculated from the market rents and market prices. The article finds that (1) changes of housing prices in Taipei lead to price changes in Kaoshung, and the latter leads Taiwan province; (2) changes of rent are much smaller than the changes of housing price; and (3) housing prices in Taiwan increased drastically. We also find: (1) at the peak of the housing market cycle, the rent multiplier is extremely high; (2) the rent multiplier drops in the year after the peak year because the rent catches up; (3) the rent multiplier in Taipei is greater than that of Kaoshung, and the multiplier in Kaoshung is greater than that of Taiwan province; and (4) overall, the rent multiplier in Taiwan is much greater than that of the United States.     

Financial distress, corporate borrowing, and industrial decline: the Lancashire cotton spinning industry, 1918-38

The analysis presented is based on a case study of Lancashire cotton textile firms. It traces their financial history through the sharp boom of 1919-20, and the sudden crisis that followed. Using a sample of representative companies it is shown that firms unwittingly adopted inappropriate financial structures that acted as the decisive constraint on the adoption of recovery strategies in the subsequent slump. The paper explains how the relationship between indebtedness and asset values prevented subsequent internal financial retrenchment, restructuring and re-equipment, and dictated the competitive processes within the industry. It is demonstrated that financial constraints were the decisive factor determining the feasibility of competitive strategies available to the industry's leaders.     

Entry and Exit in a Transition Economy: The Case of Poland

The purpose of this paper is to examine the industrialentry and exit in a transitioneconomy, over the interval of change from a predominatelystate-owned productivesystem. The data set employed offers a near-exhaustivecoverage of manufacturingfirms in Poland. The paper estimates entry and exit equationsacross 152 3-digitindustries, using an adaptation of an Orr–Shapiro/Khemani-typemodel to allow for thespecial circumstances of a transition economy. Theresults suggest that, despite theturbulence of the immediate post-transition period,the patterns of entry and exitbehaviour in Poland correspond closely to thoseobserved in more mature marketeconomies.     

Investment decisions when utility depends on wealth and other attributes

The problem of optimal investment under a multivariate utility function allows for an investor to obtain utility not only from wealth, but other (possibly correlated) attributes. In this paper we implement multivariate mixtures of exponential (mixex) utility to address this problem. These utility functions allow for stochastic risk aversions to differing states of the world. We derive some new results for certainty equivalence in this context. By specifying different distributions for stochastic risk aversions, we are able to derive many known, plus several new utility functions, including models of conditional certainty equivalence and multivariate generalisations of HARA utility, which we call dependent HARA utility. Focusing on the case of asset returns and attributes being multivariate normal, we optimise the asset portfolio, and find that the optimal portfolio consists of the Markowitz portfolio and hedging portfolios. We provide an empirical illustration for an investor with a mixex utility function of wealth and sentiment.     

An Analysis of Potential Legal Liability Incurred Through Audit Expert Systems

The introduction of expert systems technology into the audit environment has opened a new avenue of auditor legal liability. This paper examines the potential impact expert systems will have on auditor liability. The presentation of this new avenue of auditors' legal liability explores both the potential for litigation under failure of auditor/expert system collaboration to yield prudent decisions and the failure to use an available expert system. The risks evolving from failure to use an available expert system include the possibility that the system could be used against the auditor in the courtroom. While case law will ultimately determine the bounds of this liability, this paper acquaints the reader with the important legal issues involved and the varied outcomes that could emerge. It should also be noted that while the specific example presented in this paper relates to the audit profession, the legal concepts are of equivalent concern to other professions enduring broad implementation of expert systems.     

Portfolio assessment in practice in engineering

Summary A portfolio assessment scheme, introduced for one course in 1990 in the School of Engineering, Sheffield Hallam University is proving to be both a stimulus and support for change. The scheme is described and its impact discussed in terms of staff development, the student experience and curriculum development.