Corporate divestitures and family control

This paper investigates the relationship between divestitures and firm value in family firms. Using hand‐collected data on a sample of over 30,000 firm‐year observations, we find that family firms are less likely than non‐family firms to undertake divestitures, especially when these companies are managed by family rather than non‐family‐CEOs. However, we then establish that the divestitures undertaken by family firms, predominantly those run by family‐CEOs, are associated with higher post‐divestiture performance than their non‐family counterparts. These findings indicate that family firms may fail to fully exploit available economic opportunities, potentially because they pursue multiple objectives beyond the maximization of shareholder value. These results also elucidate how the characteristics of corporate owners and managers can influence the value that firms derive from their corporate strategies. Copyright © 2014 John Wiley & Sons, Ltd.     

Do E‐verify mandates improve labor market outcomes of low‐skilled native and legal immigrant workers?

We examine the impact of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low‐skilled legal workers. We use the synthetic control method to select a group of states against which the labor market trends of Arizona can be compared. Our results suggest that contrary to its intent, LAWA does not appear to have improved labor market outcomes of legal low‐skilled workers who compete with unauthorized immigrants, the target of the legislation. In fact, we find some evidence of diminished employment and increased unemployment among legal low‐skilled workers in Arizona. These findings are concentrated on the largest demographic group of workers—non‐Hispanic white men. While they are less likely to find employment, those who do have on average higher earnings as a result of LAWA. The pattern of results points to both labor supply and labor demand contractions due to LAWA, with labor supply dominating in terms of magnitude.     

OPTIMAL PRICE SETTING IN FIXED‐ODDS BETTING MARKETS UNDER INFORMATION UNCERTAINTY

This paper develops a model of optimal pricing under information uncertainty for fixed‐odds betting markets. The model suggests that bookmakers require a premium for quoting the odds several days before an event. This premium reflects the uncertainty of public information that can be exploited by expert bettors. The model predicts that when bookmakers set optimal prices, expected returns to bettors increase as a monotonic function of winning probabilities. In this manner, an information‐based explanation is given for the celebrated favourite‐longshot bias in fixed‐odds. Using an extensive data‐set of football odds from two major European bookmakers, we estimate the probability of informed betting.     

Structural Applications of the Discrete Choice Model

A growing body of empirical literature uses structurally-derived economic models to study the nature of competition and to measure explicitly the economic impact of strategic policies. While several approaches have been proposed, the discrete choice demand system has experienced wide usage. The heterogeneous, or mixed, logit in particular has been widely applied due to its parsimonious structure and its ability to capture flexibly substitution patterns for a large number of differentiated products.We outline the derivation of the heterogeneous logit demand system. We then present a number of applications of such models to various data sources. Finally, we conclude with a discussion of directions for future research in this area.     

Accumulation and the transfer of technology: Issues of conflict and mechanisms for the exercise of control

The transfer of technology from developed to underdeveloped economies is almost always associated with a conflict of interests between the supplier and the recipient of technology. Where this conflict arises control is exerted by the more powerful party to ensure that the conflict is settled in its favour. It is argued in this paper that control is allied to the power to determine the rate and type of accumulation of capital. A number of potential areas of conflict are discussed, and this is followed by a discussion of the mechanisms which the various parties can use to settle conflict in their favour.     

Outlet patronage in on-the-go consumption: An analysis of patronage preference drivers for convenience outlets versus traditional retail outlets

This study investigates patronage preferences of consumers who purchase and consume food and beverages while they are on-the-go (on-the-go consumption). The focus is on the drivers of patronage preferences for convenience outlets versus traditional retail outlets. A literature based model of patronage preferences is developed in this paper. It is tested based on data collected from a Dutch online sample (n=669) through binary logistic regression. The results reveal that significant relationships exist between patronage preferences in on-the-go consumption and the assortment offered as well as the opportunity to consume products without effort. Moreover, significant relationships between patronage preferences and consumers' time pressure as well as their health orientation exist. Consumers' income and their place of residence allow for limited inferences only. Based on the findings managerial recommendations are developed and avenues for further research are pointed out.     

The Assessment of Information Technology Maturity in Emergency Response Organizations

In emergency response organizations, information technologies are not adequately explored. Sometimes, the mere adoption of new information technologies is not productive, as their efficient use depends on other interrelated technologies and the environment where they are installed. This work describes a model to help organizations understand their capability in respect to the adoption of these technologies. The model also helps the performing of the evaluation from different perspectives, making it suitable to collaborative evaluation. Using the proposed model, an organization can measure its maturity level in different aspects of the evaluation and guide the investment on its capabilities. Part of the model has been developed for emergency response organizations and the information technology dimension of the model has been applied to two fire department installations.     

Parameter uncertainty in portfolio selection: Shrinking the inverse covariance matrix

The estimation of the inverse covariance matrix plays a crucial role in optimal portfolio choice. We propose a new estimation framework that focuses on enhancing portfolio performance. The framework applies the statistical methodology of shrinkage directly to the inverse covariance matrix using two non-parametric methods. The first minimises the out-of-sample portfolio variance while the second aims to increase out-of-sample risk-adjusted returns. We apply the resulting estimators to compute the minimum variance portfolio weights and obtain a set of new portfolio strategies. These strategies have an intuitive form which allows us to extend our framework to account for short-sale constraints, transaction costs and singular covariance matrices. A comparative empirical analysis against several strategies from the literature shows that the new strategies often offer higher risk-adjusted returns and lower levels of risk.