book reviews

THE CHANGING CONTOURS OF BRITISH INDUSTRIAL RELATIONS Nuffield College, Oxford WORK AND PEOPLE: AN ECONOMIC EVALUATION OF JOB ENRICHMENT Lodon School of Economics THE HIDDEN MEANING OF PAY CONFLICT University of Edinburgh COMPETITION AND CONTROL AT WORK Centre for Research in Industrial Democracy and Participation Glasgow University     

Regulation Fair Disclosure and the Cost of Adverse Selection

Regulation Fair Disclosure (FD), imposed by the Securities and Exchange Commission in October 2000, was designed to prohibit disclosure of material private information to selected market participants. The informational advantage such select participants gain is unclear. If multiple “insiders” receive identical information, private information is immediately incorporated in price and each insider has zero expected profit. If, on the other hand, Regulation FD has curtailed the flow of information from firms, private information becomes longer‐lived and more valuable. Hence, market makers will demand increased compensation by widening the adverse selection component of the bid‐ask spread. We identify the cost components of the bid‐ask spread for a sample of NASDAQ stocks surrounding the implementation of Regulation FD. Controlling for other factors affecting the spread, we find that adverse selection costs increase approximately 36% after Regulation FD. We interpret our finding as Regulation FD failing to achieve one of its desired objectives.     

PREDATORY CAPITALISM,PRAGMATISM, AND LEGAL POSITIVISM IN THE AIRLINES INDUSTRY

This paper examines three of the primary structures of thought and some of the situational circumstances that enable and constrain the actions of corporate leaders in the airlines industry. It argues that lawyers and corporate leaders who understand the law and the structures of power in America have a unique capacity to protect and enhance share-owner wealth. Three examples are used to propose a model of force relations in complex, high-stakes situations.     

The Eviction of Critical Perspectives from Gentrification Research

Recent years have seen an extraordinary resurgence of interest in the process of gentrification, accompanied by a surge of articles published on the topic. This article looks at some recent literature — both scholarly and popular — and considers the reasons why the often highly critical perspectives on gentrification that we saw in earlier decades have dwindled. Whilst a number of reasons could be put forward, three in particular are discussed. First, the resilience of theoretical and ideological squabbles over the causes of gentrification, at the expense of examining its effects; second, the demise of displacement as a defining feature of the process and as a research question; and third, the pervasive influence of neoliberal urban policies of ‘social mix’ in central city neighbourhoods. It is argued that the ‘eviction’ of critical perspectives from a field in which they were once plentiful has serious implications for those at risk from gentrification, and that reclaiming the term from those who have sugarcoated what was not so long ago a ‘dirty word’ ( Smith, 1996 ) is essential if political challenges to the process can be effective.     

Foreign Investors' Reaction to Lower Profitability – The Role of Information Asymmetry*

Owners of firms in trouble are more exposed to moral hazard problems than owners of successful firms. Foreign owners who face higher costs to monitor the firm should be more vulnerable to these problems than domestic ones. Consequently, a downward revision in a firm's expected future earnings should push foreign investors to sell their shares to a larger extent than domestic investors. We test this hypothesis on profit warnings issued at the Helsinki Stock Exchange. Our results reveal that in the wake of profit warnings foreign investors will predominantly sell, while domestic investors pick up the net sales by foreigners. Differences in the scale of the foreign investor sell‐out reaction are explained by a number of variables. The most significant one is our proxy for the magnitude of surprise in the warning. The reaction also increases with the degree of perceived information asymmetry for the firm that issued the warning, while foreign members on the firm's board have a moderating impact. By contrast, a number of general corporate governance‐related variables have no statistically significant impact on the reaction.     

中国经济政策重心转向促增长

正欧洲可能陷入衰退,美国正在勉强维持脆弱的复苏,而日本又遭遇沉重打击,在这种情况下,中国的出口增长持续低迷,预计未来的情况会更加糟糕。中国果断采取刺激经济的行动,在近三年来首次下调银行存款准备金率。这可能是一轮放松货币政策的行动之始,目的是在贸易和房地产领域双双疲弱之际提振中国经济。