Are there economies of scale in underwriting fees? Evidence of rising external financing costs

This study examines the behavior of spreads paid in firm underwrittenseasoned common stock offerings and straight bond offerings.Estimates indicate that up to 85% of the spread is variablecost and that the marginal spread is rising. Further, offeringsthat are likely to require greater underwriting services encounterhigher marginal spreads. These findings are consistent withthere being a family of U-shaped spreads, with lower qualityofferings priced on higher spreads, unlike the economies ofscale view of spreads. They agree with the views that underwritersprovide valuable services and that the marginal cost of externalfinance is rising.     

ASSESSING DAMAGES: THE 1983 ISRAELI BANK SHARES CRISIS

In 1983, Israeli bank shares collapsed following several years during which the banks had actively intervened to promote share prices and thereby contributed to a 300% rise in real terms. During the crisis the government assumed control of the banks, which they did not begin to sell back to the public until 1993. We compare 1993 bank share prices after the banks were partially relisted on the Stock Exchange with 1983 precrisis values. The 1993 time-adjusted market values were $10 billion lower than in 1983, a decline borne by precrisis shareholders ($4 billion) and by taxpayers ($6 billion). Of this latter amount, two-thirds represents a transfer from the government to shareholders, while approximately one-third represents an efficiency loss - and hence a direct cost - resulting from government ownership of the banks for 10 years following the crisis. The results highlight the risk inherent in a banking system that is both concentrated and universal and illustrates the costs associated with sustained government ownership.     

Brain injury rehabilitation; the continuum of care

The continuum of care for individuals with traumatic brain injury has become quite complex. Medical technology has increased survival rates leaving many individuals with severe deficits. Quality treatment programs have been developed that are proving cost effective with good outcomes for many. To insure maximal recovery from traumatic brain injury, the patient should be provided the opportunity for treatment in the setting which is most conducive to maximal recovery. The acute hospital, the subacute program, the postacute program, the home program and the others should all be considered as part of the continuum of care for the brain injured individual. Timely movement to the appropriate setting will facilitate maximum recovery of a traumatic brain injured individual. Many patients have the potential to improve with quality treatment, appropriate setting and sufficient time to be treated. The article describes the levels of care that are available, with the goals and objectives of each level. It describes the patient that would best fit into each level. It further identifies assessment tools that are useful in measuring progress and outcomes.     

Valuation of bankrupt firms

This study compares the market value of firms that reorganizein bankruptcy with estimates of value based on management'spublished cash flow projections. We estimate firm values usingmodels that have been shown in other contexts to generate relativelyprecise estimates of value. We find that these methods generallyyield unbiased estimates of value, but the dispersion of valuationerrors is very wide - the sample ratio of estimated value tomarket value varies from less than 20% to greater than 250%.Cross-sectional analysis indicates that the variation in theseerrors is related to empirical proxies for claimholders' incentivesto overstate or understate the firm's value.     

Urban agriculture in Dar es Salaam: Its contribution to solving the economic crisis and the damage it does to the environment

This article discusses urban agriculture in the city of Dar es Salaam, Tanzania, and how it helps people to cope with the country's economic crisis. Urban agriculture is also associated with environmental degradation. The article identifies factors that encourage urban agriculture at four different levels and suggests that to check further environmental degradation, concerted efforts should be made at all four levels. Such efforts should be coordinated and integrated into a holistic view of sustainable urban development.     

Land degradation in South Africa: Conventional views,changing paradigms and a tradition of soil conservation

Land degradation is currently a major concern in South Africa. However, awareness of the problem and attitudes towards it have changed little over the past century. Soil erosion and veld degradation are continually being depicted as acute problems, and overpopulation, overstocking and poor agricultural practices are viewed as the major causal factors. Internationally, however, a new paradigm is emerging, which takes a somewhat more optimistic view of the situation in Africa. One of the basic tenets of this changing perception is that there exists an untapped wealth of indigenous knowledge about the environment and associated human potential. Within this context, this study examines and describes the local tradition of stone terracing on cropland within the former Venda in the Northern Province of South Africa. This living tradition has deep historic roots and local farmers have a remarkably well‐developed understanding of the causes and effects of erosion. While the research location is unique in many ways, this study indicates that farmer tradition and innovation in the former homelands may be more common than has been supposed, and should not be ignored but actively sought out and built upon.     

The demise of the rights issue

This article suggests that the lack of use of rights offeringsin the United States, a phenomenon referred to as the equityunderwriting paradox, can be explained by transaction-cost conditions.A sample of underwritten rights offerings provides support forthe explanation. Firms making underwritten rights offeringspaid lower underwriter fees but incurred significantly largerprice drops just prior to the offering than did firms makingunderwritten public offerings. Further analysis reveals thatthe underwritten-rights-offering price concessions are a formof transaction cost that is not found in under-written publicofferings.