Deal Size,Bid Premium,and Gains in Bank Mergers: The Impact of Managerial Motivations

Do mergers with greater target relative to acquirer size create more value than mergers with smaller relative sized targets? Do larger bid amounts represent wealth transfers from acquirers or do they signal greater expected merger gains? We hypothesize that the relations among aggregate merger gains, relative size, and bid premiums are asymmetric across mergers made by value‐enhancing versus value‐reducing managers. We use a large sample of bank mergers to test these predictions and find that the value response to different explanatory variables is asymmetric. Our findings provide new insights into how the market values merger bids.     

Best foot forward or best for last in a sequential auction?

Should a seller with private information sell the best or worst goods first? Considering the sequential auction of two stochastically equivalent goods, we find that the seller has an incentive to impress buyers by selling the better good first because the seller's sequencing strategy endogenously generates correlation in the values of the goods across periods. When this impression effect is strong enough, selling the better good first is the unique pure‐strategy equilibrium. By credibly revealing to all buyers the seller's ranking of the goods, an equilibrium strategy of sequencing the goods reduces buyer information rents and increases expected revenues in accordance with the linkage principle.     

Foreign Aid and Consumption Smoothing: Evidence from Global Food Aid

The paper examines the cyclical properties of food aid with respect to food availability in recipient countries, with a view to assessing its impact on consumption in some 150 developing countries and transition economies, covering 1970 to 2000. The results show that global food aid has been allocated to countries most in need. Food aid has also been countercyclical within countries with the greatest need. However, for most countries, food aid is not countercyclical. The amount of food aid provided is also insufficient to mitigate contemporaneous shortfalls in consumption.     

Rezensionen

Ohne Zusammenfassung     

PRICING IN PUBLIC ENTERPRISES

The pricing in private and public enterprise differs primarily on the supply side. In the long run, private enterprises must cover total costs and provide an adequate return necessary to attract venture capital. In contrast, extra-commercial considerations may influence pricing in public enterprises. They may incur losses in the public interest under explicit directives from the government. A number of theories of pricing in public enterprises have been put forward. Most important of these are: (1) marginal cost of production theory; (2) no profit, no loss theory; (3) average cost of production theory; (4) theory of making profits. All these theories suffer from a number of weaknesses and none of them taken individually is a satisfactory guide for determining the prices of the products of public enterprises. There however exists a strong case for public enterprises, particularly in developing countries, to earn reasonable profits in pricing their products. Public enterprises fostered on public revenues must yield surpluses which can be used either for their own expansion or for financing the general development plans of the country. The profits which a public enterprise can earn are an important indication of the justification for the use of economic resources in that economic activity. Upholding the test of profit not only lessens possibilities of the investment decisions being subjected to political pressures but also safeguards against inefficiency in management. A policy of profits is essential for attaining the goal of building a socialist society. The amount of profits expected from different enterprises, however, cannot be uniform because of diverse objectives sought in the setting up of public enterprises, degree of essentiality of their products, nature of the services provided by them, size of their market, class of their consumers and their paying capacity, conditions of market under which they operate, their role in stimulating growth and social benefits conferred by them.     

Migration,unemployment and development: a dynamic two-sector analysis

"A time-minimizing problem of attaining a full employment state is solved in a dual-economy model with [the] Harris-Todaro migration mechanism and with a positive level of urban unemployment in the starting period. It appears that the optimum solution lies in the specialization of investment in the urban sector at least in the initial stage of development if the per-capita stock in the urban sector is very small in the starting period."     

A model for optimal resource allocation in the capital budgeting framework

Moder and Nicki (MN) presented in a recent issue of this journal a resource allocation model in the context of an urban renewal framework. This model was developed under “certainty” assumption. The present paper extends the MN model to “risk” conditions in the capital budgeting framework of a firm. The paper defines an appropriate measure of risk and explicitly introduces the possibilities of borrowing and lending in the model. Further analysis shows that slight variations of the constraints in the model yield important long-run policy guidelines to the management for resource allocation purposes.     

Finite moment formulare ofh-statistics and their estimates

Metrika - In this paper a method, using ordered partitions, for expressing powers and products of generalizedh-statistics as linear combination of such statistics is given. Some general formulae...