Dividend Omissions and Intraindustry Information Transfers

We examine potential information transfers from companies that announce dividend omissions to their industry rivals. Specifically, we examine the abnormal stock returns and abnormal earnings forecast revisions of rivals after a company makes a dividend‐omission announcement. Our results show negative and significant abnormal stock returns and negative and significant abnormal forecast revisions for rival companies in response to the announcement, and a significant and positive relation between the two. We conclude that a dividend‐omission announcement transmits unfavorable information across the announcing company's industry that affects cash flow expectations and ultimately stock prices.     

LEGAL ENVIRONMENT,INTERNALIZATION, AND U.S. ACQUIRER GAINS IN FOREIGN TAKEOVERS

In examining takeovers of foreign targets by U.S. firms, we investigate the effect of the target country's legal environment on acquiring firm value. Our results indicate that acquirers of target firms located in civil law countries experience significant positive abnormal returns, especially when the acquirer possesses a high level of intangibles. Furthermore, we find that acquirers with high levels of intangibles are more likely to acquire target firms in civil law countries. These findings suggest that the transfer of intangibles overseas provides relatively larger efficiency benefits for multinational corporations in cases where the alternative, contracting in external markets, is more difficult.     

The Value of Strategic Alliances in Acquisitions and IPOs

This paper investigates how firms’ strategic alliance experience affects their valuations as acquisition targets or in initial public offerings (IPOs). We propose that alliance experience serves as a valuable signaling device for opaque firms. The results show that takeover targets with alliance experience receive higher premiums than those without such experience. More recent alliance experience as well as alliances in the same industry also contributes to a larger target gain. Similarly, IPO firms that have alliance experience obtain higher valuations than those without the experience. Finally, alliance experience increases the likelihood that private firms exit by going public rather than being acquired.     

Is the grass on the other side greener? Testing the cross-border effect for U.S. acquirers

Why do U.S. acquirers fare worse when acquiring targets in foreign countries than when acquiring domestic targets? This paper investigates reasons for the so called “cross-border effect” by examining the influence of target public status and competitiveness of the takeover market in the target country. Our findings show that the listing status of the target drives the cross-border effect in two opposite directions: acquirers of private targets fare worse in cross-border takeovers, while acquirers of public targets experience significantly higher gains in acquisitions of foreign targets. The positive cross-border benefit for acquirers of public targets is more pronounced if the target is from a country with a less competitive takeover market.     

The power of control: the acquisition decisions of newly public dual-class firms

Many private firms that go public opt for a dual-class share structure which gives insiders stronger voting power, at the expense of shareholder democracy. We examine how the dual-class structure influences the merger decisions of newly public firms, which have a notable appetite for acquisitions. Specifically, we compare acquisition activity, method of payment choice, and the long-run value implications of acquisitions by newly public single-class and dual-class US companies. Our results show that dual-class IPO firms make relatively more acquisitions in innovative industries and are less likely to pay with stock as compared to single-class IPO firms. The reluctance of dual-class firms to pay with stock is positively related to the wedge between the insiders’ voting rights and cash-flow rights. We also find that newly-public dual-class acquirers perform better in the long-run than newly-public single-class acquirers, mainly due to dual-class acquisitions in innovative industries. Our multivariate analysis shows that these findings hold after controlling for relevant risk factors associated with industry, deal, and firm specific characteristics. These results suggest that the dual class structure may enable newly-public firms to make better M&A decisions after going public.     

Market perception of efficiency in bank holding company mergers: the roles of the DEA and SFA models in capturing merger potential

Using the Stochastic Frontier Approach (SFA) and Data Envelope Analysis (DEA), this study examines the influence of bank efficiencies on the market assessment of bank holding company (BHC) mergers. The following two questions are addressed: (1) Is the target BHC's frontier efficiency reflected in the bidder BHC's abnormal returns? and (2) Does the difference in frontier efficiency between the bidder and/or target banks relative to their peer institutions influence the acquirer's abnormal returns? In support of the Inefficient Management Hypothesis, the findings indicate that bidder wealth effects do incorporate the target's X-efficiency as well as the difference in bidder/target efficiencies relative to their peer institutions.     

Dual-track versus single-track sell-outs: An empirical analysis of competing harvest strategies

We investigate two non-traditional harvest strategies for selling a privately-held company. Dual-track private firms file for an IPO while also courting acquirers. These firms withdraw the IPO to be taken over. Dual-track public firms complete an IPO and are taken over shortly thereafter. Examining 679 takeovers from 1995–2004, we find private dual-track sell-outs earn a 22–26% higher premium and dual-track public sell-outs earn an 18–21% higher premium than single-track sell-outs. Larger, VC-backed, prestigious underwritten, and bubble-year firms have a higher propensity to take the dual-track path. The implication is that entrepreneurs may increase their harvest value by using a dual-track strategy.     

The take-over market for privately held companies: the US experience

The volume of acquisitions involving privately held firms hasfar surpassed that of publicly traded firms in recent years;yet this segment of the take-over market remains largely unexplored.In analysing the unique features of private target take-overs,we compare the mergers and acquisitions markets for unquotedand quoted firms on several dimensions including methods ofpayment, offer premiums and bidder wealth effects. Our resultsshow that these mergers provide positive shareholder wealthbenefits for bidders and relatively high premiums for privatelyheld targets. Also, the market's reaction depends on whetherit perceives the price paid for the target as too high or toolow, a rational response given the sentiment at the time ofthe announcement.     

How Does National Culture Impact Internalization Benefits in Cross‐Border Mergers and Acquisitions?

We examine how cultural differences between bidder and target countries impact internalization benefits in cross‐border takeovers. The value of internalizing intangible assets may increase if cultural differences create high transaction costs. On the other hand, integration difficulties between culturally distant acquirers and targets may reduce the value of internalization. Our results show that greater cultural distance (CD) has a positive influence on the long‐run performance of bidders with high intangibles, suggesting that significant internalization benefits from technological know‐how are realized when CD is great. These findings highlight the importance of national culture when examining internalization benefits in cross‐border mergers.     

How do producer organisations enhance farmers’ empowerment in the context of fair trade certification?

ABSTRACT

In the fair trade (FT) coffee sector, collective dynamics are viewed as a prerequisite for empowerment. The question of whether and how collective organisations empower farmers in the context of FT has yet to be fully explored. Using the concepts of collective agency and empowerment, this paper analyses the case of four farmers’ groups involved in two FT certified producer organisations in Peru. The results show that collective dynamics are drivers of change in this context oand help provide a ‘power to’ change coffee-related activities. They also generate a sense of ‘power with’, which improves group visibility and capacity to build new partnerships. Farmers gain the opportunity to develop their livelihood activities and women farmers develop ‘power from within’. TDespite that, collective action still focuses primarily on coffee and members-only projects. Inclusive rural development depends on extending ‘power with’ to other agricultural domains and to networks in the social and economic spheres.