How much does an Illegal Insider Trade?

This paper examines the choice of trade size by an illegal insider. Previous literature (i.e. Meulbroek 1992) tends to focus on the price impact of such a trader. Using a unique data set hand‐collected from the litigation reports of the Securities and Exchange Commission and court cases, we provide evidence, which suggests that the size of an illegal insider's trade is a function of the value of his private information, the probability of detection and the expected penalty if detected. Our results have important implication for security market regulators.     

Collective action initiatives to improve marketing performance: Lessons from farmer groups in Tanzania

This study aims to examine the extent to which certain characteristics and asset endowments of smallholder farmer groups facilitate collective action initiatives to improve group marketing performance. This is approached through an evaluation of a government-led programme in Tanzania, which is attempting to increase smallholder farmers’ incomes and food security through a market-oriented intervention. Findings suggest that more mature groups with strong internal institutions, functioning group activities, and a good asset base of natural capital are more likely to improve their market situation. Gender composition of groups also affects group marketing performance, as an enabling factor for male-dominated groups. Structural social capital in the form of membership in other groups and ties to external service providers, and cognitive social capital in the form of intra-group trust and altruistic behaviour are not significant factors in a group’s ability to improve its market situation.     

The Economic Consequences of Professional Sports Strikes and Lockouts

The National Basketball Association (NBA) lockout of 1998-1999 resulted in the cancellation of a significant number of games. According to the claims made by proponents of sports-driven economic growth, cities with NBA franchises should experience significant negative economic losses from this work stoppage because of the lost spending in and around basketball arenas during this event. Although it will be several years before adequate data exist for a careful ex post evaluation of the effects of the lockout, an examination of the impact of past work stoppages in professional football and basketball can shed some light on the potential impact of the NBA lockout as well as the viability of professional sports as engines of economic growth in cities. The parameter estimates from a reduced-form empirical model of the determination of real per capita income in 37 Standard Metropolitan Statistical Areas (SMSAs) over the period 1969-1996 suggest that prior work stoppages in professional football and baseball had no impact on the economies of cities with franchises. Further, the departure of professional basketball from cities had no impact on their economies in the following years. These results refute the idea that attracting professional sports franchises represents a viable economic development strategy.     

Ratings Changes,Ratings Levels,and the Predictive Value of Analysts’ Recommendations

We show that abnormal returns to analysts’ recommendations stem from both the ratings levels assigned and the changes in those ratings. Conditional on the ratings change, buy and strong buy recommendations have greater returns than do holds, sells, and strong sells. Conditional on the ratings level, upgrades earn the highest returns and downgrades the lowest. We also find that both ratings levels and changes predict future unexpected earnings and the associated market reaction. Our results imply that 1) investment returns may be enhanced by conditioning on both recommendation levels and changes; 2) the predictive power of analysts’ recommendations reflects, at least partially, analysts’ ability to generate valuable private information; and 3) some inconsistency exists between analysts’ ratings and the formal ratings definitions issued by securities firms.     

Macroeconomic announcements, volatility, and interrelationships: An examination of the UK interest rate and equity markets

This study investigates the intraday and daily pricing behavior of UK interest rate and equity index futures contracts. The paper initially examines the response of Short Sterling, Long Gilt, and FTSE100 to the release of scheduled macroeconomic announcements before employing dynamic time series techniques in order to reveal the nature of causal transmission patterns between these variables. In brief, short-term interest rates were found to be highly sensitive to indicators of prevailing economic conditions. However, the release of data important in the formation of inflationary expectations had a relatively subdued impact on long-term rates. Announcement effects appear somewhat ambiguous for the stock market. The analysis also reveals the bid-ask bounce and swift mean reversion in volatility to be important behavioral features of the return-generating process. Whilst the three variables appear to be bound by two cointegrating relationships, the tests for lead/lag relationships produce mixed results.     

Cheap Labor Strategies and Export-Oriented Industrialization: Some Lessons from the Los Angeles/East Asia Apparel Connection

In today's global manufacturing system, production is increasingly dispersed across borders. Particularly noteworthy is the rapid expansion of industrial exports from third world countries, especially the NICs of East Asia. With the entry of the formerly socialist countries of eastern Europe into the global capitalist economy, the dynamics of global economic restructuring are likely to change. This paper focuses on the lessons that can be learned from studying trans-Pacific global commodity chains, drawing out implications for East-Central Europe. In particular, we explore the role of flexibilization, subcontracting and state policy.     

Using corporate social responsibility performance to evaluate financial disclosure credibility

Due to the paucity of immediate and direct information about financial disclosure credibility, it is often difficult for investors to assess the credibility of financial disclosures (e.g. whether reported earnings are biased). Given this situation, the present study proposes and finds that investors use additional cues, such as information about corporate social responsibility (CSR) performance, to form overall impressions about management's honesty, credibility, and trustworthiness. Similar to other findings in the halo effect literature, we find that these overall impressions subsequently influence both investors' assessments of financial disclosure credibility and the prices they are willing to pay for a company's stock. The findings support the theoretical framework on financial disclosure credibility by (1) showing that management credibility is an important tool that investors use to assess disclosure credibility and (2) suggesting that management credibility is a multidimensional latent construct for which CSR performance can be one of several relevant indicators.