Partial acquisitions,the acquisition probability hypothesis,and the abnormal returns to partial targets

The acquisition of a partial stake in a target firm has been positively linked to the likelihood that the target will be involved in a follow on full acquisition involving either the original bidder or a third party bidder. Existing studies provide only suggestive evidence of this linkage by comparing the abnormal returns to partial targets that are ultimately acquired to those that are not. Using a sample of partial acquisitions, we identify characteristics that impact the probability of a full acquisition and provide a tangible link between partial target gains and the ex ante probability of acquisition. Partial targets experience positive announcement effects, and the gains are greater for subsequently acquired targets. Partial bids initiated by corporate bidders are more likely to result in a full acquisition, and the size of the acquired stake and the level of institutional ownership are positively linked to the probability of acquisition. Further, the partial target gains are positively linked to the ex ante probability of acquisition even after controlling for any increased monitoring and discipline that the partial bidder is expected to impose. The findings are robust across various time horizons and model specifications.     

Who Will Pay for Long‐Term Care in the UK? Projections Linking Macro‐ and Micro‐Simulation Models

The long‐term care funding system continues to attract much debate in the UK. We produce projections of state and private long‐term care expenditure and analyse the distributional impact of state‐financed care, through innovative linking of macro‐ and micro‐simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state‐financed (‘free’) personal care, based on need but not ability to pay, is investigated. We find that future long‐term care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long‐term care from 1.1 per cent of GDP to 1.3 per cent, or more if it generated an increase in demand. Among the care‐home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes.     

Economic Effects of Taxing Different Organizational Forms under the Nordic Dual Income Tax

This paper analyzes the economic effects of income splitting rules for closely held corporations and sole proprietorships/partnerships under the Nordic dual income tax. Income is split by imputing a return to capital, but the methods used for this differ between the Nordic countries. With a few notable exceptions, income splitting does well in the sense that the cost of capital is approximately the same in closely and widely held corporations. The special tax rules for sole proprietorships/partnerships manage to neutralize the impact of the high labor income tax on the cost of capital.     

Does trading volume detect information content in earnings reconciliations of foreign firms?

Currently, foreign firms trading securities on U.S. markets provide periodically a quantitative reconciliation of selected financial data consistent with U.S. GAAP (hereafter referred to as reconciled information) in Form 20-F. The SEC is examining whether users believe that this reconciliation process provides additional information above that provided by the foreign GAAP earning announcement and whether this incremental information enhances usefulness for market participants. We examine whether the reconciliation affects a primary indicator of information usefulness: the trading volume of capital markets participants.We use a regression model to examine the relation between a measure of abnormal trading volume and four firm-specific variables in the firm's information environment: similarities of accounting systems, analyst following, difference between reconciled earnings and foreign GAAP earnings, and dispersion of analysts’ expectations. We find a significant relation between abnormal volume and the reconciled earnings number and between abnormal volume and the dispersion of analysts forecasts. Our findings suggest that market participants may use the 20-F reconciliation in trading decisions.     

What we spend and what we get: Public and private provision of crime prevention and criminal justice

In this paper, we consider a number of issues regarding crime prevention and criminal justice. We begin by considering how crime is measured and present both general and specific evidence on the level of crime in a variety of countries. Crime is pervasive and varies substantially across countries. We outline the arguments for some public role in crime prevention, enforcement, prosecution, defence, adjudication and punishment. We consider the relative roles of the public and private sectors in crime control and criminal justice. We discuss various measures for the effectiveness of the criminal justice system. We conclude by suggesting some potential areas for research.     

The number of banking relationships and the business cycle: New evidence from Colombia

We study the determinants of multiple bank–firm relationships using a uniquely rich data set comprised of information on individual loans of a large number of firms in Colombia. We control for firm-specific variables and find that the business cycle exerts important influence on the number of bank relationships sustained by firms. Our evidence suggests that the number of bank relationships is counter-cyclical, decreasing during macroeconomic expansions and increasing during contractions. However, this effect is stronger for large firms which have more access to alternative sources of funding.     

'We are nurses, we are supposed to care for people': professional values among nurses in NHS Direct call centres

This paper explores the interpretive negotiation of professional values by nurses working in a large public-sector organisation in the UK, namely the NHS Direct (NHSD). Reported are findings from a number of case studies of NHSD, undertaken in response to calls for more research into so-called professional call centre settings.     

The Impact of Adopting International Accounting Standards on the Harmonization of Accounting Practices

Over the past few decades numerous organizations have been actively participating in the efforts to improve the comparability of financial reporting. Many studies have discussed the benefits and drawbacks of comparability. This study investigated the affect on the harmonization, or comparability, of accounting practices when a sample of companies choose to use international accounting standards (IASs) when preparing financial reports.This study analyzed trends in the I index, a measure of concentration for the use of a particular accounting practice introduced by van der Tas, to determine if the choice of accounting methods by a sample of Swiss companies became more aligned with a sample of companies from three other countries. The study included a control sample of Swiss companies that did not switch from reporting using local Swiss standards during the same time period, 1988 through 1995. Four accounting practices were included; depreciation, inventory, financial statement cost basis, and consolidation practices. The practices used were compared with a sample of companies from three countries; Japan, the UK, and the US.The results indicated that across the 8-year period, the majority of the I indices comparisons were positive and statistically significant. However, the results did not support that these increases were due primarily to the adoption of IASs.     

The MultiJurisdictional Disclosure System: Model for Future Cooperation?

This study investigates whether the MultiJurisdictional Disclosure System (MJDS) was successful in meeting its stated objectives, namely, facilitating cross-border offerings and reporting by Canadian firms. The MJDS is a bilateral agreement implemented in July 1991 between Canadian and US market regulators. It is hypothesized that facilitating crossborder offerings via the MJDS will lead to an increase in the number of US listings by Canadian firms and reduced costs of US listing for extant Canadian listers. Data evaluated include changes in US exchange listings from 1987 to 1995 and questionnaires to two subgroups of Canadian firms: (1) the population of Canadian firms listing their securities in US and Canadian markets and (2) a sample of Canadian firms listing only on Canadian exchanges. We conclude that for most Canadian firms, the MJDS provides no significant benefit. Further, few firms reported that the MJDS affected their decision to list in the United States. Our results suggest that the MJDS has not, overall, provided the benefits originally envisioned under it, and we question whether it is an appropriate model for future cooperation between national regulatory groups.