The strategy-shareholder value relationship: Testing temporal stability across market cycles

This study examines the stability of the relationship between diversification and shareholder value across contiguous time periods, organized so as to highlight three distinct market cycles. By defining value as a two-dimensional construct, separating the concurrent economic phenomena of cycle and trend, and controlling for other factors that influence risk and return, this study finds that the best way to protect shareholder value against economic downturns is to diversify in a manner such that ‘all of one's eggs are in similar baskets’.     

Take that jam! An analysis of winning percentage for NBA teams

The won-loss percentage for all games played in a season by NBA teams is modeled as a function of team performance statistics. Four variables field goals, free throws, rebounds, and turnovers are found to be statistically significant and account for more than 90% of the variation in the data. The regression coefficients also appear to be stable from year to year. Predictions for four years obtained from the estimates of one season show good agreement with the observed data. Forecasts for the 1993 season are also given based on mid-season statistics. Predictions for play-off winners are also briefly discussed. The analysis is carried out in the spirit of exploratory data analysis using graphical methods.     

Cultural differences and shareholder value in related mergers: Linking equity and human capital

Merger literature suggests that the relationship between shareholder gains and the relatedness of merging firms is contingent upon the compatibility of the two firms' top management cultures. This hypothesis is tested by surveying the perceptions of cultural differences of top management teams of recently acquired firms, and then relating these perceptions to related stock market gains to the buying firms. The findings suggest a strong inverse relationship between perceptions of cultural differences and shareholder gains, after controlling for perceptions of the buying firm's tolerance for multiculturalism and the relative size of the merging firms.     

Reprint to: Infrastructure provision and macroeconomic performance

This paper studies the differences between private and government provision of infrastructure. Capital utilization decisions and their differential role in determining market prices for capital goods under the two regimes of infrastructure provision serve as a critical transmission mechanism for fiscal policy. A subsidy to private providers of infrastructure is preferable to direct government provision irrespective of how the subsidy or expenditure is financed. The case for private provision is much stronger in economies characterized by high levels of congestion. The choice between private and government provision also has a crucial effect on the design of optimal fiscal policy.     

A Lower Bound for the Centered <Emphasis Type="Italic">L</Emphasis><Subscript>2</Subscript>-Discrepancy on Asymmetric Factorials and its Application

The role of uniformity measured by the centered L ₂-discrepancy (Hickernell 1998a) has been studied in fractional factorial designs. The issue of a lower bound for the centered L ₂-discrepancy is crucial in the construction of uniform designs. Fang and Mukerjee (2000) and Fang et al. (2002, 2003b) derived lower bounds for fractions of two- and three-level factorials. In this paper we report some new lower bounds for the centered L ₂-discrepancy for a set of asymmetric fraction factorials. Using these lower bounds helps to measure uniformity of a given design. In addition, as an application of these lower bounds, we propose a method to construct uniform designs or nearly uniform designs with asymmetric factorials.     

The nation in heterogeneous time

Following a critique of homogenous time, one that is so central to Benedict Anderson's reading of social history, the paper builds on the notion of heterogeneous time, with particular reference to governmentality, in the narrativization of the nation. The examples of B.R. Ambedkar and the fictional character of Satinath Bhaduri's Dhorai are then brought in to show the continuing tension between the utopian dimension of the homogeneous time of capital and the real space constituted by the heterogeneous time of governmentality and the effects produced by this tension on efforts to narrativize the nation. The paper ends with the claim that it is morally illegitimate to uphold the universalist ideals of nationalism without simultaneously demanding that the politics spawned by governmentality be recognized as an equally legitimate part of the real time-space of the modern political life of the nation.     

On the aggregate welfare cost of Great Depression unemployment

The potential benefit of policies that eliminate a small likelihood of economic crises is calculated. An economic crisis is defined as an increase in unemployment of the magnitude observed during the Great Depression. For the U.S., the maximum likelihood estimate of entering a depression is found to be about once every 83 years. The welfare gain from setting this small probability to zero can range between 1% and 7% of annual consumption in perpetuity. For most estimates, more than half of these large gains results from a reduction in individual consumption volatility.     

Unilateral capital transfers, public investment, and economic growth

We contrast the effects of a transfer tied to investment in public infrastructure from a traditional pure transfer. The latter has no growth or dynamic consequences; it is always welfare improving, the gains increasing with the stock of government debt and the benefits of debt reduction. A tied transfer generates dynamic adjustments, as public capital is accumulated in the recipient economy. Its long-run growth and welfare effects depend upon the initial stock of infrastructure, as well as co-financing arrangements. These contrasts also apply to temporary transfers, particularly the transitional dynamics. A temporary pure transfer has only modest short-run growth effects and leads to a permanent deterioration of the current account, while a productive transfer has significant impacts on short-run growth, leading to permanent improvements in key economic variables including the current account.