Foreign Acquisitions in the United States and the Effect on Shareholder Wealth

The research presented here indicates that foreign acquisitions in the United States in the form of mergers, have resulted in abnormal returns to targets of nearly 22 percent, a figure not much higher than in domestic mergers. Sell-off abnormal returns have averaged nearly three percent, substantially higher than the average 0.7 to 1.66 percent in the domestic case. We find that merger abnormal returns have been substantially higher in our first subperiod (1982–84) than in the second (1985–87). For selloffs, our results are reversed-abnormal returns have been higher in the second subperiod. In cross-sample tests, we find the Japanese paying the highest merger premiums/abnormal returns, while the sell-off abnormal returns are highest when Germans are the buyers. We also find significant differences across industry samples but not across combination type samples. We do not find a significant relationship of these abnormal returns to the firm's accounting and financial variables.     

Effects of the Boxing Day tsunami on the world capital markets

The effects of the Boxing Day tsunami on the world equity markets are investigated in this paper. In particular, this paper examines how the risks and returns of industry and market portfolios are altered as a result of the tsunami. The analysis includes countries that were directly or indirectly exposed to this catastrophe. Both parametric and non-parametric tests are employed to explore the relationship between equity stock returns and the tsunami, and the CAPM is utilised to assess the variation in systematic risks. Given that the literature in this area is at its earliest stage, we draw on economic theories of flooding. In this way, our results are consistent with that of the flooding literature, which would predict that the Boxing Day tsunami would have minimal effects on the risks and returns of equity markets. This paper documents that the tsunami was associated with few abnormal return changes and a general increase in the long-term systematic risk of the equity portfolios in the study.     

How does the stock market react to the announcement of green policies?

We investigate the impact of 19 announcements of environmental regulation on the equities listed on the Australian Stock Exchange over the period 2005–2011. Using a well-established event study methodology, we assess whether these announcements are value constructive or destructive for equity investors. Additionally, we estimate the change in systematic risk following the announcements. Our results show that the Australian market was particularly sensitive to the carbon pollution reduction scheme (CPRS) announcement. A cumulative abnormal return of −31% was recorded in the alternative energy sector after Australia submitted its target range to the Copenhagen Accord. We observe that a move towards a greener nation has a mixed effect on abnormal returns with apparent sector-by-sector differences. Green policies appear to affect the long-term systematic risk of industries, leading to the diamond risk phenomenon.     

Predictors of high healthcare resource utilization and liver disease progression among patients with chronic hepatitis C

Background:

Since hepatitis C virus therapy is typically prioritized for patients with more advanced disease, predicting which patients will progress could help direct scarce resources to those likely to benefit most. This study aims to identify demographics and clinical characteristics associated with high healthcare resource utilization (HRU) and liver disease progression among CHC patients.

Methods:

Using health insurance claims (January 2001–March 2013), adult patients with ≥2 CHC claims (ICD-9-CM: 070.44 or 070.54), and ≥6 months of continuous insurance coverage before and ≥36 months after the first CHC diagnosis were included. Patients with human immunodeficiency virus were excluded. Generalized estimating equations were used to identify the demographic and clinical characteristics of being in the 20% of patients with the highest HRU. Factors predicting liver disease progression were also identified.

Results:

In the study population (n?=?4898), liver disease severity and both CHC- and non–CHC-related comorbidities and conditions were strong predictors of high healthcare costs, with odds ratios (ORs; 95% confidence interval [CI]) for ≥2 CHC-related and ≥2 non-CHC-related comorbidities/conditions of 2.78 (2.48–3.12) and 2.19 (1.76–2.72), respectively. CHC- and non-CHC-related comorbidities and conditions were also strong predictors of liver disease progression with ORs (95% CI) for ≥2 CHC-related and ≥2 non-CHC-related comorbidities and conditions of 2.18 (1.83–2.60) and 1.50 (1.14–1.97), respectively.

Limitations:

Potential inaccuracies in claims data, information or classification bias, and findings based on a privately insured population.

Conclusion:

This study suggests that CHC patients with high healthcare resource utilization have a high level of comorbidity at baseline and also that non-CHC comorbidities and conditions are strong predictors of high HRU. Non-cirrhotic CHC patients with one or more comorbidities are at high risk of progressing to cirrhosis or end-stage liver disease.     

Impact of completing chronic hepatitis C (CHC) treatment on post-therapy healthcare cost

Background:

Chronic hepatitis C (CHC) is associated with significant economic burden. This study evaluated the healthcare cost alleviation associated with treatment of CHC.

Methods:

Health insurance claims from 60 self-insured US companies were analyzed (01/2001–03/2012). Adult patients with ≥1 CHC diagnosis (ICD-9-CM: 070.44, 070.54), initiating interferon, and with ≥2 dispensings and with ≥48 weeks of follow-up were selected. Patients diagnosed with HIV or who completed only 24 weeks of interferon therapy (a surrogate for CHC genotypes 2 and 3) were excluded from the study. Interferon users were categorized into complete and discontinued therapy cohorts. During the post–48-week treatment period, cohorts were compared for healthcare resource utilization using rate ratios (RRs), as well as healthcare costs using per-patient per-year (PPPY) cost differences.

Results:

A total of 1017 patients who completed and 953 patients who discontinued interferon therapy were identified. Relative to the discontinued therapy cohort, the completed therapy cohort had significantly fewer hospitalizations (RR [95% CI]?=?0.74 [0.68, 0.81], p?p?p?=?0.039), which translated into significantly lower total healthcare costs PPPY (cost difference [95% CI]?=?$4540 [1570, 7680], p?=?0.004) and hospitalization costs (cost difference [95% CI]?=?$3039 [1140, 5248], p?=?0.002). Non–CHC-related costs accounted for 55% and CHC-related costs for 45% of the all-cause cost difference between cohorts.

Limitations:

Claims data may have contained inaccuracies, and genotypes of patients with CHC could not be confirmed. The study consisted of privately insured individuals and may not be generalizable to the entire CHC population.

Conclusion:

Compared to discontinued therapy patients, CHC patients who completed interferon therapy and presumably had a higher rate of achieving SVR were found to have lower levels of healthcare resource utilization and costs post-therapy. The reduction was primarily in costs associated with non–HCV-related comorbidities.     

Firm survival through a crisis: The influence of market orientation,marketing innovation and business strategy

As an outcome of the economic crisis, the global manufacturing sector is collapsing. Focusing on Chinese manufacturing small and medium enterprises (SMEs), this study investigates whether marketing innovation, defined as improvements in the marketing mix, can assist in withstanding the challenges of operating under the current economic conditions. A conceptual model linking market orientation, marketing innovation, competitive advantage and firm survival is tested using structural equation modelling. Three key findings are derived. First, the examined Chinese manufacturing SMEs had a greater perceived likelihood of survival had they developed and sustained a competitive advantage. Second, marketing innovation assisted in developing and sustaining competitive advantages based on differentiation and cost leadership strategies. Third, marketing innovation capabilities improved when the examined manufacturing SMEs were competitor oriented and had good inter-functional capabilities.