Market anticipation of merger activities: An empirical test

This paper empirically examines the possibility that there is leakage of information regarding a merger prior to the announcement of the first bid for the target firm. The tests for the existence of market anticipation are based on the behavior of variances implied in the premia of call options listed on the target firms' stocks. We conclude that the evidence is consistent with the hypothesis that the market anticipates an acquisition prior to the first announcement.     

Weathering the Storm: The Impact of the East Asian Crisis on Farm Households in Indonesia and Thailand

This article assesses the impact of the East Asian financialcrisis on farm households in two of the region's most affectedcountries. Indonesia and Thailand, using detailed household-levelsurvey data collected before and after the crisis began. Althoughthe nature of the shocks in the two countries were similar,the impact on farmers' income (particularly on distribution)was quite different. In Thailand, poor farmers bore the bruntof the crisis, in part because of their greater reliance onthe urban economy, than did poor farmers in Indonesia. Urban-rurallinks are much weaker in Indonesia. Farmers in both countries,particularly those specializing in export crops, benefited fromthe currency devaluation. Although there is some evidence thatthe productivity of the smallest landholders declined over theperiod in question, it is difficult to attribute this directlyto the financial crisis. At least in Thailand, a rural creditcrunch does not seem to have materialized.      

THE ROLE OF GROUPS AND CREDIT COOPERATIVES IN RURAL LENDING

Lending groups and credit cooperatives have the potential toprovide affordable credit to small-scale farmers because theycan reduce transaction costs and lower the risk of default.In developing countries these two kinds of lending arrangementshave a mixed record, although their difficulties reflect shortcomingsin implementation rather than in the lending arrangements themselves. The article indicates that successful group lending schemeswork well with groups that are homogeneous and jointly liablefor defaults. The practice of denying credit to all group membersin case of default is the most effective and least costly wayof enforcing joint liability. Another way to encourage membersto repay is to require mandatory deposits that are reimbursedonly when all borrowers repay their loans. The article points out that credit cooperatives that mobilizesavings deposits are less dependent on external sources andincrease the borrowers' incentive to repay. The success of creditcooperatives requires training of members as well as management.Experience suggests that credit cooperatives should not expandtheir activities beyond financial intermediation until theydevelop strong institutional and managerial capabilities