Stock market perceptions of the motives for mergers in cases reviewed by the UK competition authorities: an empirical analysis

A number of studies have considered the motivation of managers to follow a merger strategy. However, as far as we are aware none has looked at the influence of competition regulation on merger motives using stock market data and event study techniques. Data drawn from 63 merger cases in the UK between 1989 and 2003 are examined for the stock market's perceptions of what motivated managers to pursue their initial merger bid. The findings suggest that the Synergy and Hubris dominate as motivations for mergers and that, unintentionally, competition policy may help to reduce the number of mergers motivated by Managerialism. Copyright © 2008 John Wiley & Sons, Ltd.     

Estimating elasticities with frontier and other regressions in evaluating two advertising strategies for US Army recruiting

To help resolve a long-standing debate in the US Government on advertising strategies for military recruitment, this study applies ordinary least squares (OLS), which here includes (1) stochastic frontier analysis (SFA) and (2) frontierized least squares (FLS), to evaluate two distinct advertising strategies: Service Specific vs. Joint. Thus, in contrast to the customary use of a single central tendency method, such as OLS, on different models, we here use multiple methods on a single model to cross check and validate results. In addition to serving as cross checks, the methods can be used to identify classic problems, including biases in the data and shortcomings in one or more of the methodologies employed. To avoid dealing with problems on identifying motives underlying various patterns in advertising expenditure, data are drawn from a statistically designed experiment where the expenditures were controlled as part of the experiment to resolve the issue of a choice between the two advertising strategies of interest. In contrast to earlier studies, the current paper finds that all methods used lead to the same conclusion: Service Specific is more efficient than Joint, at least for the US Army—which is, by far, the largest military advertiser. Finally, the paper introduces a new method for reallocating advertising budgets between the Uniformed Services which (a) is simpler than the customary use of cross partial derivatives, (b) avoids the need for the ceteris paribus assumptions for each such allocation, as in customary reallocation methods and (c) simplifies matters so that, for instance, it is not necessary to introduce an entirely new organization to administer the desired coordinating activities.     

Risk,balanced skills and entrepreneurship

This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not taking this possible linkage into account, previous research has underestimated the impacts of both risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates provide an illustration supporting our contention. We raise the possibility that even risk-averse people might be suited to entrepreneurship; and it may also help explain why prior research has generated somewhat mixed evidence about the effects of risk aversion on selection into entrepreneurship.     

THE INEQUALITY OF EMPLOYMENT AND SELF-EMPLOYMENT INCOMES: A DECOMPOSITION ANALYSIS FOR THE U.K.

U.K. employment and self-employment income inequality are analysed over 1979–94/95. Robust inequality decompositions reveal occupation to be a relatively important and hitherto neglected determinant of earnings inequality. In contrast, self-employment income inequality is harder to explain, although occupation is also the most important single factor in the mid-1990s. The paper also provides a novel implementation of a decomposition of changes in Kolm's inequality index.     

International harmony measures of accounting policy: comparative statistical properties

Van der Tas's (1988) I index and the between-country C index introduced by Archer et al. (1995) are competing measures of international harmony. We present comparative statistical properties of these indices, via a simulation study covering three accounting methods in 10 countries, with uniform, bimodal and unimodal distributions of companies across accounting methods. The indices are also adjusted for non-disclosures using techniques developed by Archer and McLeay (1995) and Archer et al. (1995). The I index and the between-country C index are mathematically equivalent in the two-country case even in the presence of non-disclosures. As more countries are compared, the two indices diverge. The means and standard deviations of the I index, with a correction proposed by Archer and McLeay (1995), decrease and there is little skewness or kurtosis. In contrast, as more countries are compared, the between-country C index exhibits more stability in means, lower standard deviations, higher skewness and kurtosis. The between-country C index may be superior to the corrected I index because (i) between-country C index means approximate their ‘expected values’ (where all observations equal expected values) more closely than do corrected I index means: and (ii) between-country C index means are more stable than corrected I index means where the data come from stable distributions.