Company investment announcements and the market value of the firm

This paper examines the stock market reaction to 402 company investment announcements made by UK companies during the 1991–1996 period. The market-adjusted abnormal returns are generally positive but small. Investment announcements are classified according to functional categories, and we find the level of abnormal returns to vary according to the type of capital investment being announced. In particular, we find the market to react more favourably to investments that ‘create’ future investment opportunities, than to investments which can be categorized as ‘exercising’ investment opportunities. The market reaction also varies with firm size, with large companies tending to experience smaller responses to announcements than do smaller firms. Chung et al. (1998 Chung, KH, Wright, P and Charoenwong, C. (1998). Investment opportunities and market reaction to capital expenditure decisions. Journal of Banking and Finance, 22: 41–60.  ) reported that the quality of a company's investment opportunities is the primary determinant of market reactions to capital expenditure decisions. The findings presented here lend some support to a role for investment opportunities in market valuations. Project size is also found to have a significant positive impact on the level of abnormal returns.     

The Canadian underground and measured economies: Granger causality results

Using new time-series data for the size of the Canadian underground economy, the relationship between unreported and measured GDP in that country is examined. Granger causality tests are conducted, with a proper allowance for the non-stationarity of the data. It is found that there is clear evidence of such causality from measured GDP to ‘hidden’ output, but only very mild evidence of Granger causality in the reverse direction. This result supports similar evidence for New Zealand reported by the first author, and has several interesting policy implications.     

Cost-effectiveness modeling for neuropathic pain treatments: investigating the relative importance of parameters using an open-source model

Aims: The study objective was to develop an open-source replicate of a cost-effectiveness model developed by National Institute for Health and Care (NICE), in order to explore uncertainties in health economic modeling of novel pharmacological neuropathic pain treatments.

Materials and methods: The NICE model, consisting of a decision tree with branches for discrete levels of pain relief and adverse event (AE) severities, was replicated using R, and used to compare a hypothetical neuropathic pain drug to pregabalin. Model parameters were sourced from NICE’s clinical guidelines and associated with probability distributions to account for underlying uncertainty. A simulation-based scenario analysis was conducted to assess how uncertainty in efficacy and AEs affected the net monetary benefit (NMB) for the hypothetical treatment at a cost-effectiveness threshold of £20,000 per QALY.

Results: Relative to pregabalin, an increase in efficacy was associated with greater NMB than an improvement in tolerability. A greater NMB was observed when efficacy was marginally higher than that of pregabalin, while maintaining the same level of AEs than when efficacy was equivalent to pregabalin, but with a more substantial reduction in AEs. In the latter scenario, the NMB was only positive at a low cost-effectiveness threshold.

Limitations: The replicate model shares the limitations described in the NICE guidelines. There is a lack of support in scientific literature for the assumption that increased efficacy is associated with a greater reduction in tolerability. The replicate model also included a single comparator, unlike the NICE model.

Conclusions: Pain relief is a stronger driver of NMB than tolerability, at a cost-effectiveness threshold of £20,000 per QALY. Health technology assessment decisions which are influenced by NICE’s model may reward efficacy gains, even if they are associated with more severe AEs. This contrasts with recommendations from clinical guidelines for neuropathic pain, which place more equal weighting on improvements in efficacy and tolerability as value drivers.     

Henry George Under the Microscope: Comments on "Henry George's Political Critics"

The annual supplement of the AJES for 2008 titled Henry George: Political Ideologue, Social Philosopher, and Economic Theorist had as its first and longest essay "Henry George's Political Critics" by Professor Michael Hudson. It offered a multitude of criticisms, most of which Prof. Hudson seemed to agree with. All purported to be criticisms of George as a political strategist, though some seem more to originate from Hudson's disagreement with theoretical positions George was bound to take. The purpose of this short paper is to show that Professor Hudson's long article fails to do what it seems intended to do. That is, it fails to show that trade unionists and especially socialists were "natural allies" of the Georgist movement, that it was George's fault that that they were not, and that George "allied" his movement irrevocably to "capital," rejecting its "natural allies."     

The US Budget Deficit in Perspective

Is the budget deficit the major problem facing the new administration? Giles Keating of Credit Suisse First Boston in London, argues that the size and significance of the Federal budget deficit is greatly exaggerated.     

SOME HUMAN ASPECTS OF GIVING AND TAKING FARM MANAGEMENT ADVICE

Superimposed on, or underlying, the technical aspects of giving farm management advice are a variety of human considerations. The techniques used and the advice given cannot be divorced from the individuals involved and the way in which advice is communicated. Management advice will be sought for a variety of reasons and from a variety of sources. It will have its own special problems, stemming from the nature of the subject itself, and will generate its own longer term benefits. Differing advisory styles exist but it is possible to suggest some general guidelines and conclusions.     

The Japanisation of Xerox

The impact of Japanese competition has led to attempts by Western organisations to implement elements of Japanese management. The process has been described as'Japanisation'. Here the authors examine the Japanisation of Rank Xerox and Xerox Corporation. Xerox has benefitted from the learning experience of its Japanese joint venture, Fuji Xerox, and has been described as the most'Japanised'of Western companies.     

Discriminating between autoregressive forms: A Monte Carlo comparison of Bayesian and ad hoc methods

The paper considers the problem of discriminating between the autoregressive forms of a Koyck distributed lag model and a regression model with autocorrelated distrubances. Several interpretations of an ad hoc rule-of-thumb suggested by Griliches are compared with Bayesian posterior odds analysis in a Monte Carlo experiment. The Bayesian analysis is generally superior to the rules-of-thumb, the latter exhibiting large probabilities of type I error, and low power. The rules-of-thumb excessively favour the distributed lag model, while the Bayesian method is free from such bias. All methods improve with increased sample size.     

THE A.E.S.: A COMMENTARY ON ITS PAST,PRESENT AND FUTURE

This commentary, written during the Society's fiftieth anniversary year, describes its origins and early activities and traces the evolution of its Conferences and the Journal of Agricultural Economics. It comments on the professional and non-professional achievements of the Society to date, and briefly, considers the future. Emphasis is given to the Society itself rather than to individual members although a series of appendices list many of the individuals who have been especially involved in the conduct of the Society's affairs.     

Outside Looking In: Resisting Colonial Discourses of Aboriginality

Using postcolonial theory, this article examines the ways in which the staff and members of the board of directors of Outside Looking In (OLI), a youth development through arts- and leisure-based program for Aboriginal youth in Canada, respond to discourses about Aboriginality. Based on interviews with OLI staff and board members, field notes, and the review of archival documents, we argue that OLI staff and board members encounter three dominant discourses: hip-hop is not an Aboriginal activity, Aboriginal youth should learn through mainstream forms of education, and Aboriginal peoples are inherently flawed. We show, however, how OLI exemplifies Bhabha's (1994) notion of hybrid third spaces because it reflects Aboriginal youth's contemporary cultural interests in hip-hop, it integrates kinesthetic education into Eurocentric learning regimes, and its participants return the colonial gaze at OLI's annual performance. OLI exemplifies how leisure activities can be used to challenge colonial discourses of Aboriginality in Canada.