THE EFFECTS OF MUTUAL FUNDS ON M&A COMPENSATION

Motivated by shareholders’ interest in combating executive wealth expropriation through the merger and acqusition (M&A) process, we study how mutual funds influence firm behavior around an acquisition through votes against management proposals. We find that mutual funds reduce the chief executive officer's ability to extract rents during the M&A process by voting against management‐sponsored compensation proposals after the acquisition, thus lowering both excess compensation and increasing pay‐for‐performance sensitivity. Furthermore, mutual fund voting magnifies the impact on negatively performing firms and firms with a larger amount of the mutual fund's holdings in the firm.     

Scandinavia's monetary convergence with the European Community

In the twelve months preceding the conclusion by the EFTA countries and the EC of the agreement on the establishment of a common European Economic Area in October 1991, the three Skandinavian EFTA members-Norway, Finland and Sweden-decided to tie their currencies to the ECU. What objectives do these countries hope to achieve by this move? What effects is it likely to have?     

Local equilibrium equivalence in probabilistic voting models

Electoral equilibria depend upon candidates' motivations. Maximization of expected vote share may not lead to the same behavior as maximization of the probability of winning the election. Accordingly, it is desirable to understand when electoral equilibria are insensitive to the choice of candidate motivations. This paper examines sufficient conditions for local equilibrium equivalence between expected vote share maximization and maximization of probability of victory in the spatial model of elections with probabilistic voters.     

Responses of air cargo carriers to industrial changes

This study examines how product characteristics, values, inventory cost, shipping charges, shipping distance, and time affect an international firm's choice of air carrier. An individual choice model is constructed by assuming that the shipper in a specific industry chooses the optimal air cargo carrier with the minimal logistics cost. The study further aggregates air cargo demands on different routes for the carriers by considering the spatial distribution of the origin-destination pattern and any temporal changes in the industrial structure. A case study is used to illustrate the application of the proposed model using data from Taiwan Taoyuan International Airport and the industrial economics database in Taiwan. The results show that shippers with high product value and short delivery distance focus on the shipping charge and prefer choosing the air cargo carrier that offers more flights. Further a carrier may achieve a larger market share if its supply attributes match the industrial structure and the product characteristics of the market on the route. Finally, because dynamic changes in the industrial structure and product value have been captured, the results are more accurate than that from the Grey model.     

Towards Shared Social Responsibility: A Study of Consumers’ Willingness to Donate Micro-Insurances when Taking Out Their Own Insurance

In recent years, the concepts of charity and development aid have changed significantly. Present concepts combine direct money transfer with co-production, knowledge sharing and the development of products and services designed for the need of developing and transition economies. The concept of micro-financing is a financial service which has proven to allow for entrepreneurs in the respective countries to start up their businesses. A relatively new financial product for these countries is micro-insurance. This article deals with the question whether consumers in the Netherlands are willing to donate micro-insurances and which factors influence this willingness to contribute to the non-profit micro-insurance approach of an insurance company. The data were collected with questionnaires among a sample of the Dutch population (N = 504). The data have been processed in a one-way between-groups ANOVA, a paired sample t test and an ordinal regression analysis. The results show that approximately half of the Dutch consumers are willing to pay an additional amount on their insurance premium for the donation of micro-insurances. The amount of the insurance premium did, however, not affect the willingness to donate (WTD). If consumers could choose the beneficiary less people are willing to donate, yet those people are willing to donate more money. In conclusion, there is readiness among consumers to contribute to micro-insurance via an insurance company that assists in setting up micro-insurance projects. This indicates a possible role for companies to act as an intermediary between philanthropic acts and consumers.     

Short-termism of long-term investors? The investment behaviour of Dutch insurance companies and pension funds

Countercyclical investment strategies of large institutional investors such as insurance companies and pension funds can support financial stability, while procyclical investment behaviour is considered as destabilizing at a macro level. Yet, there is limited understanding of how insurance companies and pension funds invest during market shocks, such as the global financial crisis. Investigating the equity and fixed income portfolios of Dutch non-life insurers, life insurers and pension funds, we find evidence for procyclical behaviour by insurance companies (both life and non-life). For pension funds, we find evidence for countercyclical behaviour during market upturns.     

Professionalising gender and development expertise: innovations in capacity‐building and credentialing

Gender training does not adequately prepare gender and development professionals (GDPs) to undertake robust gender integration of development and humanitarian assistance (D&H) policies and programmes and limits their ability to impact gender equity and equality and development overall. In particular, GDPs lack sector‐specific and applied technical skills in gender analysis and integration. These limitations undermine GDPs’ own performance and their credibility with employers and colleagues who rely on them for professional guidance in gender integration. To address these shortcomings and advance the field of gender and D&H, this note describes a new model of gender capacity‐building that introduces three innovations: (1) sector‐specific, job‐related and outcome‐based gender analysis and integration competencies, (2) a professional development capacity‐building short course based on the competencies and applications to D&H policies and programmes and (3) a professional credential that recognizes possession of these critical competencies.