A spatial merger estimator with an application to school district consolidation

This paper develops a spatial merger estimator to explain political integration generally and then applies this method to a wave of school district mergers in the state of Iowa during the 1990s. Our estimator is rooted in the economics of matching and thus accounts for three important features of typical merger protocol: two-sided decision making, multiple potential partners, and spatial interdependence. Rather than simply explaining when a particular region is likely to experience a wave of political integration, our method allows us to explore the factors driving which specific subregional mergers take place. This allows us to explore how those districts that merge choose with which of their neighbors to do so. Our results highlight the importance of state financial incentives for consolidation, economies of scale, diseconomies of scale, and a variety of heterogeneity measures in this particular application. We also demonstrate the power of our estimator, relative to existing estimators, to detect a statistically significant role for heterogeneity factors. While our application is limited to school district consolidation, our method can be adapted to include the salient features of many spatial integration problems.     

THE LONG‐RUN PERFORMANCE OF COMPANIES THAT WITHDRAW SEASONED EQUITY OFFERINGS

We examine the long‐run stock price and operating performance of companies that withdraw seasoned equity offerings (SEOs). Firms that withdraw an offering provide an opportunity to examine whether markets fully adjust to the information conveyed when managers announce the intent to issue shares, independent of any agency problems that might be intensified by the completion of the offering. As in completed seasoned equity offerings, long‐horizon event‐time operating and stock price performance in sample firms is substantially lower than what is observed among control firms. Underperformance is also observed in an equally weighted calendar‐time analysis. Results are consistent with overpricing among small firms that attempt, but then withdraw, SEOs.     

Directors' remuneration and the DTI review of company law

This article considers how directors' remuneration should be set. It does so in both general terms and in the light of the DTI (1999) paper entitled Directors' Remuneration. A Consultative Document . The DTI document forms part of a general review of company law that is being undertaken by the Department of Trade and Industry. This article explores the extent to which these government-directed developments can be seen as an extension of the Cadbury, Greenbury and Hampel Reports and the extent to which self-regulation as opposed to government regulation looks set to dominate this area.     

Exchange Controls,Political Risk and the Eurocurrency Market: New Evidence from Tests of Covered Interest Rate Parity

This study employs daily data to examine the effects on Eurocurrency and onshore returns of the May 21, 1981 imposition of exchange controls by French President Mitterand. Prior to this time, transaction costs explain the average onshore deviations from covered parity; however, these averages ignore short-lived political risk premia which emerged just before the imposition of controls. As expected, there is no evidence of political risk of Eurocurrency markets. Yet when exchange controls were in effect, premia in excess of transaction costs surfaced on nonfranc Eurocurrency deposits at the time of devaluations of the franc within the EMS. [431]     

The influence of relative values of outside director stock options on firm strategic risk from a multiagent perspective

Prior work has examined the effects of absolute levels of outside director stock option grants on risk behavior without recognizing that relative stock option values could differentially affect risk taking. Drawing from the house money effect perspective, we extend this literature by examining how positive deviation from prior outside director option grants values influences firm strategic risk. Additionally we draw from the behavioral agency model and the power literature to develop a multiagent contingency framework suggesting the effect of positive director pay deviation depends on the incentives and power of CEOs reflected in CEO stock ownership and CEO duality, respectively. Our empirical results indicate positive pay deviation has a positive effect on firm risk taking while high ownership and duality independently and jointly weaken this base relationship. Copyright © 2013 John Wiley & Sons, Ltd.     

A genre-theoretic approach to financial reporting research

A genre is a category of texts marked out by the conventions employed in their production. A genre-theoretic approach draws out the complex, subtle and elusive nature of financial reporting as communication. It provides scope for examining the features of the reporting process that contribute to its complexities and subtleties in a systematic, comprehensive and integrated way, embracing both technical and social dimensions. This paper discusses aspects of genre theory, as employed in discourse analysis, and their application to financial reporting. Relevant features of the approach include financial statement composition as a challenging process; knowing users; an engaged discourse community; situated communication; intertextuality; and structural dynamism. A genre-based approach has a number of implications for financial reporting research, at both methodological and substantive levels, which are explored in the paper, and may ultimately offer the potential for integrating market-based and interdisciplinary work together with the best of the classical tradition.     

The Role of Advertising in the Marketing Strategy of Accountancy Firms: Evidence from a Regional Market

Rules governing the advertising activity of accountancy firms have recently been relaxed. Published evidence is, however, scant regarding the perceived value of accountancy firms' advertising by both users of their services and by business advisers. Building on a conceptual model of the role of advertising in accountancy firms described in an earlier issue of this journal [Watkins and Wright, Service Industries Journal, Vol. 5, No. 3, November 19851, this article presents some results from a recent survey of a regional accountancy market. These results show that a careful examination of advertising within the overall marketing mix is required, with other forms of marketing perhaps offering greater possibilities. The overall conclusion is that the cost-effectiveness of the advertising of accountancy services h s t be open to doubt.