Are Acquisitions Worthwhile? An Empirical Study of the Post-Acquisition Performance of Privately Held Belgian Companies

Few studies have addressed the performance of smaller unquoted companies involved in acquisitions, especially in Continental European countries. Therefore this study addresses the post-acquisition financial characteristics of privately held companies involved in 143 Belgian acquisitions between 1992 and 1994. Specifically, this paper examines the financial performance of the acquiring firm after the acquisition, using statistical analysis of industry-adjusted variables. Our findings show that following the acquisition, the profitability, the solvency and the liquidity of most of the combined companies decline. This decline is also reflected in the failure prediction scores. With respect to the added value, acquisitions are found to be accompanied by increases in the labour productivity, but this is caused by the general improvement of gross added value per employee of Belgian companies in the last 10 years. So it seems that, contrary to the general expectations and beliefs, acquisitions usually do not seem to improve the acquirer’s financial performance. This paper was presented at the European Financial Management Association Conference (June 2001, Lugano, Switzerland) and at the VVE day (October 2001, Diepenbeek, Belgium).     

Labour commodification,differentiation, and marginalization of the peasantry in Sella Limba (Sierra Leone) from 1950 to the present

In Sierra Leone, migration to diamond fields and the development of cash crops have contributed to the increasing integration of the peasantry in the national and global economy. Based on the study of a small northern chiefdom, Sella Limba, we describe how the labour commodification have led to the perversion of “traditional” social relations based on anteriority, and to the break‐up of large domestic groups into smaller, more precarious ones. At the same time, manual agriculture has been marginalized by massive cheap rice imports and remained very low in capital intensity. In this context, we show how low labour productivity curtails opportunities for long‐term social and economic differentiation. Farmers combine “modern” and “traditional” social relations, developing hybrid accumulation strategies that are sometimes close to mere survival.     

English in Product Advertisements in Non-English-Speaking Countries in Western Europe: Product Image and Comprehension of the Text

ABSTRACT

Although English has been shown to be the most frequently used foreign language in product advertisements in countries where it is not the native language, little is known about its effects. This article examines the response to advertisements in English compared to the response to the same ad in the local language in Western Europe on members of the target group for which the ad was intended: 715 young, highly educated female consumers. The use of English in a product ad does not appear to have any impact on image and price of the product, but it does affect text comprehension: the meaning of almost 40% of the English phrases was not understood. These results were the same for all countries involved in the study, irrespective of whether the respondents’ (self-) reported proficiency in English is high or low.     

Neural Correlates of Impulsive Buying Tendencies during Perception of Product Packaging

Research has shown that people differ in their susceptibility to impulsive buying. The appeal of product packaging has the potential to trigger impulsive buying even for consumers with no intention to make a purchase. The aim of the present study was to investigate whether individual differences in consumers’ impulsive buying tendencies affect unconscious neural responses during the perception of product packaging. Functional magnetic resonance imaging (fMRI) was applied to measure neural responses to the perception of product packages in participants with different impulsive buying tendencies. The results of the study support and expand prior research in impulsive and reflective information processing and behavior. First, attractive versus neutral packages evoked more intensive activity changes in brain regions associated with an impulsive system. Second, attractive and unattractive versus neutral packages led to less intensive activity changes in regions associated with a reflective system. Third, attractive packages activated regions associated with reward, whereas unattractive packages activated regions associated with negative emotions. The results suggest that there is indeed a corresponding relationship between stronger impulsive buying tendencies and activity in brain areas associated with impulsive and reflective processes.     

Zur Kritik der Kapitalmarktunion

This article examines the European Commission’s proposal to establish a Capital Markets Union through facilitated marketbased financing, prominently cross border securitisation. However, facilitated securitisation might raise systemic risks through a deteriorated term transformation, imperfect risk transfer and excessive leverage. It might create a new liquidity glut completely separated from the needs of the real economy. In addition, this concept is contradictory to previous efforts to properly supervise, regulate and control the European financial markets. The essay favours a regulation and control approach combined with extensive EU reforms of the financial sector.     

Vermont's Act 250 legislation: a citizen-based response to rapid growth and development

Unregulated land development, dramatic increases in population, soaring land prices, and environmental degradation are significant factors responsible for the widespread concern among Vermonters that the state is losing its distinctive rural character and its small, picturesque villages. The citizen legislature responded by adopting Act 250, Vermont's principal land development and land use law. This paper describes the events leading to the passage of this law, examines the major components of this progressive legislation, and analyzes its effectiveness in protecting Vermont's natural resources.     

Selection of fidelity mutual funds

This study investigates the possibility of identifying those mutual funds in the Fidelity Family which might outperform the S&P 500 by using Jensen's alphas. An average of Jensen's alphas for a three-year period covering 1991–93 was computed and 1994 was used as a test case. A total of 152 Fidelity mutual funds were included in the study. Data were obtained fromAlexander Steele's Mutual Fund Expert Data Base [Steele Systems, Inc.] andHuntington Financial Optima Data Base [Huntington Associates Financial, Inc.]. It was found that it was possible to identify high performance funds. These funds had an alpha over 0.80. There were 21 funds in this group which produced an average total return of 4.44 percent, while S&P 500 had a total return of 1.32 percent in 1994.Any errors found in this paper are the sole responsibility of the author. The author would like to express sincere appreciation to Steele Systems, Inc. and Huntington Associates Financial, Inc. for providing the necessary data used in this study. Special appreciation also goes to Melissa Luo who so diligently and carefully performed all the computer work.