Relative importance of scheduled macroeconomic news for stock market investors

This paper investigates the relative importance of scheduled U.S. macroeconomic news releases for stock valuation. The study focuses on 11 macroeconomic announcements selected on the basis of the previous literature and the Bureau of Labor Statistics classifications of major economic indicators. The paper shows that five out of the 11 announcements have significant influence on stock valuation. These are the Employment Report, NAPM (manufacturing), Producer Price Index, Import and Export Price Indices, and Employment Cost Index. Of these six announcements, the Employment Report and NAPM (manufacturing) exert the greatest influence. The time of the announcement, measured by days from the beginning of the month to the release day, has a moderating impact on the relationship between macroeconomic announcements and its importance.     

Reserve ratios: A proposal for change

The paper addresses the problem of Fed control of the money supply and the inherent instability of a fractional reserve banking system which Friedman covered in A Program for Monetary Stability. While Friedman proposed a 100 percent reserve requirement as a solution, this work suggests a change from imposing legal reserve ratios on specific liabilities to one of imposing them on total bank liabilities. Reserve ratios are compared to tax rates. Friedman's proposal is to increase the tax rate to 100 percent on specific liabilities and pay interest on reserve balances at the Fed. The proposal of this paper is to keep the tax rates (present reserve ratios) but change the tax base. It is shown that the Fed would gain control over the maximum expansion of banks, but would lose direct control over specific liabilities. The Fed would not tax some liabilities and subsidize others. The Fed could concentrate on setting the tone of the money market and allow the public to use whatever set of bank liabilities it desires as money without specific penalty.     

Fundamentals of Social Accounting

A series of social accounting matrices (SAMs) are developed in this paper from first principles. Starting with the basic concepts of an institution, real assets and financial claims, the notions of a transaction and production are introduced, and it is shown that a SAM can be developed from the fundamental transactions identity. Accounts for real assets and financial claims are then grafted on to this initial SAM by reference to a similarly fundamental assets identity. Hence, a fully articulated SAM framework is developed which covers institutions, production, assets and their appreciation.     

A multilevel, identity-based approach to leadership development

A frontier of leadership development is examined involving the respective roles of levels-of-analysis and identity in constructing an integrated development system. An approach is described in which individual and relational leadership identities are the focus of developmental efforts at lower organizational levels (e.g., individual contributor and first-level supervisor) but collective identities become the focus at higher levels (e.g., general manager and above). The separate areas of levels-of-analysis and leader identities are first discussed in terms of their respective relevance to leadership development. These are then discussed jointly in elaborating on a proposed development approach that integrates across organizational levels as well as levels of development (i.e., leader development and leadership development). In developing collective leadership identities, processes that involve participants in engaging across boundaries (functional, hierarchical, geographical) are recommended.     

Directors'' remuneration in the theory of the firm: Specification and testing of the null hypothesis

One basis for the managerial theories has been the strong correlation between firm size and executive remuneration. This may, however, simply reflect variations in managerial quality across firms. We also show that the absence of a correlation between profitability and remuneration is not evidence in favour of the managerial theories. In this paper we follow the rewards to individual U.K. managers over time, thereby controlling for quality variation. We conclude that growth is highly rewarded and involvement in mergers and takeovers attracts an extra premium. This may explain the continued popularity of mergers despite knowledge of their general unprofitability.     

Does Corporate Diversification Destroy Value?

We analyze several hundred firms that expand via acquisition and/or increase their number of business segments. The combined market reaction to acquisition announcements is positive but acquiring firm excess values decline after the diversifying event. Much of the excess value reduction occurs because our sample firms acquire already discounted business units, and not because diversifying destroys value. This implies that the standard assumption that conglomerate divisions can be benchmarked to typical stand-alone firms should be carefully reconsidered. We also show that excess value does not decline when firms increase their number of business segments because of pure reporting changes.     

Organizational resources enabling service responsiveness: Evidence from Greece

This article examines the implementation of relationship marketing strategy based on a sample of business-to-business firms operating in Greece. Organizational resources, including a focus on learning and flexibility/adaptation in strategic planning, are demonstrated to be antecedents of effective relationship marketing strategies. The possession of these resources lead to superior customer performance (as measured by customer satisfaction and loyalty) and, ultimately, superior financial performance (as measured by profit levels, profit margin, and ROI). Our results provide support for the development of organizational resources that foster and enable relationship marketing in business-to-business environments since such resources are linked with improved firm performance.     

Employee Stock Options, Corporate Taxes, and Debt Policy

We find that employee stock option deductions lead to large aggregate tax savings for Nasdaq 100 and S&P 100 firms and also affect corporate marginal tax rates. For Nasdaq firms, including the effect of options reduces the estimated median marginal tax rate from 31% to 5%. For S&P firms, in contrast, option deductions do not affect marginal tax rates to a large degree. Our evidence suggests that option deductions are important nondebt tax shields and that option deductions substitute for interest deductions in corporate capital structure decisions, explaining in part why some firms use so little debt.     

Beyond choice: investigating the sensitivity and validity of measures of strength of preference

Many experiments investigating different decision theories have relied heavily on pairwise choices between lotteries. These are easy to incentivise, but often yield only limited dichotomous information. This paper considers whether respondents’ judgments about their strength of preference (SoP) for one alternative over another can usefully supplement standard choice data. We report extensive evidence that such judgments show sensitivity to variations in question format and parameter values in the directions we should expect, not only within-subject but also between-sample. We illustrate how such judgments can usefully supplement standard pairwise choice data and enrich our understanding of observed behaviour.