Managerial Motives in Mergers: Propensity Score Matching Approach

Recent research finds that managers of public firms overpay for acquisitions relative to private equity acquirers and that the public acquirer ulterior motives explain the apparent overpayment. I find that, in sharp contrast to the existing literature, the difference in what public firm managers are willing to pay for their targets can be attributed to efficiency motives (using the propensity score matching to remove a significant amount of bias from the sample allows for cleaner comparisons). Additional support for these results is found by examining transactions in which both public and private equity firms are bidding on the same target. Copyright © 2012 John Wiley & Sons, Ltd.     

Utilizing financial market information in forecasting real growth,inflation and real exchange rate

In this paper we build an open economy extension of the Gordon (1962) valuation model that suggests a simple forecasting system for three macroeconomic variables; the real growth, inflation and real exchange rate. All the forecasting equations in our system utilize current financial market information in the form of dividend yields and short-term interest rate. Our empirical results indicate that these simple forms of financial market information are relevant for forecasting the time-varying underlying trends in the macroeconomic data for the U.K., Eurozone and Japan, when treating the U.S. as the world market.     

Guidelines for choosing between multi-item and single-item scales for construct measurement: a predictive validity perspective

Establishing predictive validity of measures is a major concern in marketing research. This paper investigates the conditions favoring the use of single items versus multi-item scales in terms of predictive validity. A series of complementary studies reveals that the predictive validity of single items varies considerably across different (concrete) constructs and stimuli objects. In an attempt to explain the observed instability, a comprehensive simulation study is conducted aimed at identifying the influence of different factors on the predictive validity of single versus multi-item measures. These include the average inter-item correlations in the predictor and criterion constructs, the number of items measuring these constructs, as well as the correlation patterns of multiple and single items between the predictor and criterion constructs. The simulation results show that, under most conditions typically encountered in practical applications, multi-item scales clearly outperform single items in terms of predictive validity. Only under very specific conditions do single items perform equally well as multi-item scales. Therefore, the use of single-item measures in empirical research should be approached with caution, and the use of such measures should be limited to special circumstances.     

Do We Fully Understand the Critical Success Factors of Customer Satisfaction with Industrial Goods? - Extending Festge and Schwaiger’s Model to Account for Unobserved Heterogeneity

This paper extends Festge and Schwaiger’s (2007) model of customer satisfaction with industrial goods by accounting for unobserved heterogeneity. The application of a novel response-based segmentation approach in partial least squares path modeling (PLS-PM) - the finite mixture partial least squares (FIMIX-PLS) methodology - opens the way for the effective identification of distinctive customer segments. In comparison to previous studies in this field, group-specific path model estimates reveal each customer segment’s particular characteristics as well as other differentiated findings. Hence, this contribution demonstrates that structural equation modeling studies on the aggregate data level can be seriously misleading and makes a strong case for segment-specific customer satisfaction analyses.     

Does trade raise income?: Evidence from the twentieth century

Efforts to estimate the effects of international trade on a country’s real income have been hampered by the failure to account for the endogeneity of trade. Frankel and Romer recently use a country’s geographic attributes — notably its distance from potential trading partners — to construct an instrument to identify the effects of trade on income in 1985. Using data from the pre-World War I, the interwar, and the post-war periods, we find that the main result of Frankel and Romer is confirmed throughout the whole century: countries that trade more as a proportion of their GDP have higher incomes even after controlling for the endogeneity of trade. We also find that the OLS estimate of trade’s effect on income is biased downwards in almost every sample year. However, this result is not robust to the inclusion of distance from equator (latitude).     

Greening the balanced scorecard

Environmental management issues have received an increased amount of attention in recent years, as have various performance measurement systems (PMS) such as the balanced scorecard (BSC). However, implementation of these systems is challenging due to the differences found amongst the companies and users of PMS. This study investigates how the presence of particular supporting factors served to facilitate a PMS change that incorporated environmental measures. Utilization of extant change models enables us to investigate different change factors like advancing and hindering forces, momentum, and the leaders of change. We found two models appropriate for investigating environmental management accounting change, even though the change factors can be either dynamic or static. The study also proposes that company culture should be carefully taken into account when companies are changing their PMS. Technical changes to PMS are far easier to accomplish than are changes to a dominant culture. Finally, we suggest that utilizing the BSC for the purposes of environmental management is a worthwhile pursuit.     

Non-linear relationship between industrial service offering and sales growth: The moderating role of network capabilities

In an effort to approach the mixed findings regarding the relationship between a firm's industrial service offering and its performance, this study analyzes the impact of the industrial service offering on sales growth and the moderating role of network capabilities. The proposed research model is tested based on data from 91 Finnish manufacturing firms. Our results demonstrate a non-linear effect of the service offering on sales growth. We also find that network capabilities enhance the effect of the service offering on sales growth. For managers of manufacturing firms, the results imply that the active development of a comprehensive service offering should be implemented in conjunction with the development of organizational capabilities, such as network capabilities, to create value and promote improved performance.     

International Management of North-Sea Herring

North-Sea herring is a transboundary resource,shared by the EU and Norway. The purpose ofthis paper is to investigate how the harvestsor total allowable catch quotas (TACs) for thisspecies should be divided between these twojurisdictions so that both parties aresatisfied. We apply a discrete-timegame-theoretic model in which we show that theEU should be allocated more than half of theTAC even if the EU has higher harvesting costs.This result is due to the distribution patternof the herring, with a larger share of herringlocated in the EU zone. However, we find thataccording to the Nash bargaining solution, thecurrent sharing allocates too large a share tothe EU.     

Value orientations and consumer expectations of Corporate Social Responsibility

This paper explores how personal and situational factors impact consumer expectations of Corporate Social Responsibility (CSR). Consumer expectations are known to motivate marketers to incorporate social considerations into their marketing practices and to communicate about those actions. A study was conducted in order to examine the effect of values and issue involvement on consumer CSR expectations, categorised as economic, legal, ethical, and philanthropic. The study's findings demonstrated that consumers generally have high expectations of CSR, especially in the legal and ethical‐philanthropic domains. Expectations for the ethical‐philanthropic dimension of CSR are higher amongst consumers holding high self‐transcendent values and practicing high involvement. The main implications of the study are the potential for positioning companies as socially responsible and incorporating CSR in strategic marketing and communications decisions.