Corporate cash holdings and political connections

We examine the relation between corporate liquidity and political connections measured via lobbying expenditures. This is an interesting question as many of the motives for holding cash should be diminished by political connections. Results indicate a significant and inverse relation between cash levels and lobby expenses and that the marginal value of cash decreases with lobbying. Taken together, these findings suggest firms react optimally to the reduced benefits of cash linked to political connections and that the market recognizes the weakened benefits of cash. Overall, our research shows another way political connections can shape corporate policy.     

A Model for Partnering with Not-for-Profits to Develop Socially Responsible Businesses in a Global Environment

Responsible risk management is central to banking ethics. With the 1999 publication of the Basel Committee’s proposal, Basel II, for a New Capital Accord to replace the 1988 agreement, Basel I, an attempt has been made to address the problem of correlating banks’ risk management with their capital requirements. The Basel II framework, finalised in June 2004, is designed to improve risk management by using models based on past performance to help set the amount of capital banks are required to hold by regulators, with the purpose of improving the efficiency of capital allocation. The objectives of this study are to investigate how banks generally, but particularly those located in China, could improve their risk management systems and what the implications of these new regulations are for them. Three relevant propositions were formulated, namely, Basel II will improve risk management; Basel II will improve capital allocation efficiency; and compliance with advanced risk management systems is biased in favour of the large banks. Evidence was assembled with which to evaluate these three propositions by gathering relevant primary data by means of a representative survey of Chinese banking executives involved in risk management. The findings strongly support the first two of the above propositions and partly support the third proposition.     

Building e‐support for cause‐related marketing through strategic alliances

New opportunities for nonprofit organisations to reach new donors and volunteers are being generated by an accelerated interest in cause‐related marketing on the part of both consumers and business firms, in conjunction with the emergence of the Internet. Together, these conditions have created a climate conducive for nonprofit alliances with corporations to become one of the fastest growing forms of marketing today. This paper examines online cause‐related marketing from the fundraiser's perspective, and sets forth a series of marketing management implications of building relationships with businesses and their customers as potential donors on the Internet. Copyright © 2000 Henry Stewart Publications.     

Seasoned Equity Offers: The Effect of Insider Ownership and Float

Seasoned equity offering (SEO) underpricing has increased dramatically since the early 1980s. While previous research has examined the determinants of SEO underpricing, these studies have not explored the effect of insider ownership on discounts. We find that this effect is twofold. First, higher insider ownership reduces float, thereby increasing price pressure and SEO underpricing. This effect is greatest in firms with low liquidity. Second, the greater the percentage of secondary shares offered, the lower the underpricing, suggesting that manager's pressure banks to reduce underpricing when their personal wealth is at stake. However, we find that this negative relation is mitigated if the firm employs a prestigious underwriter.     

Hungarian agriculture: A model for the socialist world?

Hungary's status as a model in agriculture is examined in terms of its economic, social and political performance, its planning and organizational components and the contextual factors affecting its transferability. In economic and social performance the Hungarian strategy compares favourably with the rest of Eastern Europe and the USSR. Planning and institutional factors contributing to this performance include the New Economic Mechanism planning approach, autonomous agricultural producers' co-operatives, new structures for diffusion of technology, and integration of household producers into the commodity system. While the transferability of the model remains doubtful due to factors such as size, technical base, and political choices, increased participation in the world economy may force the USSR and the rest of Eastern Europe into reforms bearing some resemblance to those in Hungary.     

Legal Liability as an Environmental Policy Tool: Some Implications for Land Markets

This article considers the use of legal liability as a tool for internalizing environmental externalities, considering specifically the implications for land markets. The discussion focuses on liability under CERCLA. A simple model of land markets is used to evaluate alternative assignments of liability in terms of their impacts on decisions to buy and sell property and to invest in pollution abatement. The results suggest that the existence of a land market can alter the effect of the liability rule. In some cases the land market can eliminate an inefficiency that would otherwise exist, while in other cases it can create one.     

The Value of Olympic Sponsorships: Who is Capturing the Gold?

In recent years, corporate sponsorship has become anincreasingly important element of the marketing communicationsmix. This paper uses data from the 1996 Atlanta Summer OlympicGames to measure the value of Olympic sponsorship. Using stockreturn data, we find that the shareholders of sponsoring firmsearn negative average abnormal returns around announcement ofOlympic sponsorship agreements. This finding, consistent withan agency cost explanation of corporate investment practices,is robust to variation in a number of firm- and sponsorship-specificvariables. In addition, cross-sectional analysis supports themonitoring hypothesis, as significant equity ownership by institutionalinvestors is positively related to abnormal returns around announcement.Our results suggest that utilizing Olympic sponsorships in themarketing communications mix may not be value-enhancing.     

A Public Choice Analysis of the Evolution of Tort Law

Abstract . In contrast to the article by W. Harris, it is contended that in the area of product liability a rule of strict liability is not necessarily less efficient than a negligence rule and an analogy between product liability cases and lotteries is not appropriate.