Cost of Protection of the U. S. Wool Sector

The present system of protection of the U. S. wool sector affords an opportunity for examining the interdependence of intermediate and final goods sectors when both are protected. It also illustrates the cumulative nature of protective devices.
In this study an intermediate good model is employed to investigate the cost to the United States of maintaining the present method of protection for raw wool and wool products¹. The concept of a net tariff is utilized to represent the actual protection afforded to a final good when its inputs are also protected. This net tariff is related to the effective protective rate which has been frequently mentioned in the literature. It is, however, more useful when the question of cost allocation between sectors is under consideration. The intermediate good model also permits an estimation of the gain from the removal of protection in either the raw wool or wool products sector as well as an estimation of the gain from adopting alternative methods of protection such as deficiency payments.     

DIVERSIFICATION STRATEGY,ENTRY MODE,AND PERFORMANCE: EVIDENCE OF CHOICE AND CONSTRAINTS

Despite theoretical arguments matching type of diversification strategy with mode of entry, the exact form of relationships between strategy, mode of entry, and performance remains enigmatic. Our analysis, based on two samples, demonstrates that matches between strategy and mode did improve performance in one time period, but not a second. In addition, the results show that exclusive reliance on a single mode (internal development or acquisition) can restrict performance. © 1997 by John Wiley & Sons, Ltd.     

Postbankruptcy Performance and Management Turnover

This article examines the performance of 197 public companies that emerged from Chapter 11. Over 40 percent of the sample firms continue to experience operating losses in the three years following bankruptcy; 32 percent reenter bankruptcy or privately restructure their debt. The continued involvement of prebankruptcy management in the restructuring process is strongly associated with poor post-bankruptcy performance. The substantial number of firms emerging from Chapter 11 that are not viable or need further restructuring provides little evidence that the process effectively rehabilitates distressed firms and is consistent with the view that there are economically important biases toward continuation of unprofitable firms.     

Do Buyouts (Still) Create Value?

We examine how leveraged buyouts from the most recent wave of public to private transactions created value. Buyouts completed between 1990 and 2006 are more conservatively priced and less levered than their predecessors from the 1980s. For deals with post‐buyout data available, median market‐ and risk‐adjusted returns to pre‐ (post‐) buyout capital invested are 72.5% (40.9%). In contrast, gains in operating performance are either comparable to or slightly exceed those observed for benchmark firms. Increases in industry valuation multiples and realized tax benefits from increasing leverage, while private, are each economically as important as operating gains in explaining realized returns.     

Non‐GAAP Earnings Disclosure in Loss Firms

This study examines the incremental information in loss firms’ non‐GAAP earnings disclosures relative to GAAP earnings. Using a large sample obtained through textual analysis and hand‐collection, we posit and find that loss firms’ non‐GAAP earnings exclusions offset the low informativeness of GAAP losses for forecasting and valuation. Loss firms’ non‐GAAP earnings are highly predictive of future performance and are valued by investors, while the expenses excluded from GAAP earnings are not. Additional tests suggest that loss firms disclosing non‐GAAP profits have significantly better future performance than GAAP‐only loss firms and are not overvalued by investors. Comparing non‐GAAP earnings of profitable firms to those of loss firms, we find that loss firms’ non‐GAAP metrics are significantly more predictive and less strategic. We conclude that non‐GAAP earnings disclosures are particularly informative about loss firms and help investors disaggregate losses into components that have differential implications for forecasting and valuation.