Internationalisation by australian franchisors

In this article the process of international entry by Australian franchisors is explored. A small number of Australian franchisors was examined — composed of those planning to internationalise as well as those which had already started international operations. A range of influences, both internal and external to the firm, was found to be important in encouraging or pushing the franchisor along the road to international entry — most important being the approach by an interested foreign party. The research revealed a general preference for low commitment foreign entry methods. As with U.S. franchisors the master licensing method was the most preferred approach. The overwhelming bulk of the international franchising by Australian companies has occurred in just three countries: New Zealand, the United States and the United Kingdom.     

Bondholder losses in leveraged buyouts

Announcements of successful leveraged buyouts (LBOs) duringJanuary 1985 to April 1989 caused a significantly negative returnon outstanding publicly traded nonconvertible bonds. Yet theaverage risk-adjusted debt holder losses are less than 7 percentof the average risk-adjusted equity bolder gains. Bond lossesare related to the pre-LBO rating, but only weakly to equityholder gains. We demonstrate that trader-quoted data from amajor investment bank offers conclusions about the effects ofLBOs on debt holders different from those drawn from commonlyused matrix and exchange-based data (such as Standard & Poor-'sBond Guide data). This has important implications for eventstudies involving debt instruments.     

Managing supply chain risk and disruption from IT security incidents

Supply chain practices often put companies and their supply chains at risk. One of the most serious risks is disruptions. While many types of disruptions have been considered, little attention has been given to disruptions caused by information technology (IT) security incidents. Partner cooperation can assist in preventing or mitigating damage from IT security breaches in supply chains, where breaches can disrupt production, cause loss of essential data, and compromise confidential information. We develop a generalizable mathematical model that quantifies IT security risk in the supply chain. We then show how to find solutions for optimal risk reduction under several definitions of optimality: minimizing upstream risk, minimizing downstream risk, and minimizing global (supply chain) risk. We show how to develop curves for each of the above scenarios that indicate when extra funds should be spent on security, which security controls should be implemented, and when subsidies among partners are beneficial.     

Knowledge, internationalization of the firm, and inward-outward connections

Even though outward operations such as exports and foreign investment have received most of the attention so far, the internationalization of businesses also includes activities that are inwardly oriented. Inward activities like purchases of machinery, the procurement of raw materials and semifinished goods provide opportunities for building relations with foreign actors. They also offer opportunities to learn about foreign trade techniques and ways of using various operation modes, and by active use of such knowledge companies should be in a better position to start or extend outward foreign operations. This paper presents a case study of the Norwegian company Moelven Industrier ASA and its operations in the Russian market. It shows that the creation and utilization of knowledge through inward-outward connections face many obstacles and that, in Moelven's case, the full potential of such connections was seldom realized.     

A Review of IPO Activity, Pricing, and Allocations

We review the theory and evidence on IPO activity: why firms go public, why they reward first–day investors with considerable underpricing, and how IPOs perform in the long run. Our perspective is threefold: First, we believe that many IPO phenomena are not stationary. Second, we believe research into share allocation issues is the most promising area of research in IPOs at the moment. Third, we argue that asymmetric information is not the primary driver of many IPO phenomena. Instead, we believe future progress in the literature will come from nonrational and agency conflict explanations. We describe some promising such alternatives.     

Two Views of Efficiency in Indian Agriculture

The frontier profit functions and the optimum demand for hired labor are estimated separately for small and large farms to test the hypothesis of differential efficiency attributable to size and technology. The optimum demand for hired labor is compared against actual demand to measure efficiency in labor utilization, estimated for individual farms, under both certainty and uncertainty cases. The empirical results are based on 1969–70 farm-level data from Punjab and Haryana States in India. Small farm group is less efficient than large farms in achieving the frontier (maximal) profit. Under the profit maximizing behavior with certainty in production, both small and large farms acquired less than optimal amount of hired labor, but small farms acquired much less than large farms. Uncertainty in production, prices, and risk aversion on the part of farmers seems to discourage the demand for hired labor on the basis of estimates using the “safety-first” risk model. Small farms appeared to experience a higher degree of uncertainty measured by comparative variability in production. Even after adjustment for greater uncertainty and risk aversion, small farms remained less efficient in demand for labor, treating other inputs as fixed. Les fonctions frontaliéres de profit et la demande optimale pour la main-d'oeuvre ensasée sont estimées séparément pour des petites et grandes exploitations agricoles pour vérifier l'hypothése d'efficacité différentielle attribuable é l'importance de l'exploitation et à la technologie. La demande optimale pour la main-d'oeuvre engagée est com-parée contre la demande actuelle pour mesurer l'efficacité dans l'utilisation de la main-d'oeuvre. Cette demande est estimee pour des exploitations agricoles individuelles, dans les deux cas de certitude et d'incertitude. Les résultats empiriques sont basés sur les données au niveau d'exploitation agricole pendant les années 1969 è 1970 des Etats Punjab et Haryana de l'lnde. Un petit groupe d'exploitations agricolesest moins efficace que des grandes exploitations agricoles pour réaliser un profit (maximal) frontalier. Sous les manieres qui portent au profit maximum avec certitude de production, les petites et grandes exploitations agricoles toutes les deux obtiennent un montant d'engagés moins que optimal, mais les petites exploitations agricoles en obtiennent beaucoup moins que les grandes exploitations agricoles. L'incertitude de production, de prix, et l'aversion de risque de la part des fermiers semblent décourager la demande pour la main-d'oeuvre engagée en se ba-sant sur les évaluations qui viennent du modéle de risque “securité d'a-bord.” Les petites exploitations agricoles semblent expérimenter un plus haut degré d'incertitude mesurépar la variabilite comparativé de production. Même après l'ajustage pour une plus grande incertitude et l'aversion de risque, les petites exploitations agricoles demeurent moins efficaces pour la demande de main-d'oeuvre, traitant les autres entries comme fixes.