Should the Pre‐Notification of Mergers Be Compulsory in Australia?

Australia is unusual among the world's antitrust jurisdictions in not making the pre‐notification of mergers compulsory. However, if the parties are concerned that the Australian Competition and Consumer Commission (ACCC) is likely to object to the merger, there are strong incentives for them to notify the ACCC as the regulator has developed a strong reputation for imposing heavy costs on parties that fail to notify such mergers. The result is a system of quasi‐compulsory notification that creates the strongest incentives for parties to notify the ACCC of those proposals to which it is most likely to object. This study analyses data extracted from the ACCC's merger database and the empirical results are consistent with this characterisation. Mergers reported voluntarily by the parties are found to experience longer delays to completion, and are more likely to be challenged by the ACCC, when compared with a sample of all other mergers assessed by the regulator. The results suggest that non‐compulsory notification allows the parties themselves to pre‐sort the proposed merger vis‐à‐vis its interest to the ACCC.     

Is conventional debriefing adequate? An ethical issue in consumer research

Issues relating to ethics are infrequently addressed in the marketing literature. One area in which there might be ethical concerns is debriefing. In an experiment, when false information is provided by the researcher to subjects, those false beliefs can persist despite conventional debriefing. The persistence of false beliefs has ethical implications, of which consumer researchers should be aware. Anexplicit debriefing involving a formal discussion of the belief perseverance phenomenon is proposed as an alternative to conventional approaches. This is tested in three separate studies, including a partial replication of Ross, Lepper, and Hubbard (1975) as well as two extensions to marketing situations. Implications for corrective advertising are also discussed.     

The Causes and Consequences of Accelerated Stock Repurchases

We examine the choice between accelerated share repurchase (ASR) and open market repurchase (OMR) as repurchase mechanisms between 2004 and 2007. For a sample of ASRs and OMRs that actually buy shares in the announcement quarter, we find that ASR firms have lower market‐to‐book ratios, less cash, but greater managerial entrenchment. Prior to repurchase, ASR firms are subject to significantly more takeover rumors than OMR firms are, and this, along with entrenchment and undervaluation, affects the choice to use ASRs. ASR firms experience positive average abnormal returns both before and after the announcement. Moreover, the latent takeover probability is significantly lower for both ASR and OMR firms (when compared with pre‐announcement levels), but the reduction for ASR firms is more pronounced. Our results suggest that repurchases, and especially ASRs, indeed make a firm a less attractive prospect for takeover.     

The profit versus loss heuristic and firm financing decisions

This paper examines the extent to which the profit versus loss heuristic directly affects debt issuance decisions. We hypothesize that reporting a loss and its use as a heuristic rather than firms’ economic fundamentals has an impact both on the decision to raise external debt finance and on the choice between debt and equity financing. The results are consistent with the hypothesis. We find that there is a sharp and economically-significant discontinuity around the zero-earnings threshold in the level of debt issues. Firms reporting small losses issue significantly less debt than firms reporting small profits. We also find that the loss heuristic has an impact on the choice between debt and equity in that loss firms issue less debt relative to equity. Taken together the results are consistent with the notion that profit versus loss heuristic impacts the debt issuance decision and provide explanations that add to those offered by the traditional theories.     

Alternative measurement approaches to consumer values: The list of values and the rokeach value survey

Two methods of measuring consumer values, the List of Values and the Rokeach Value Survey, are compared. Both involve some social desirability responding but both have convergent, discriminant, and empirical validity for consumer research. The List of Values may be preferable for some types of research because it detects more daily influence in people's lives and because it is simpler to administer.     

Alternative Models of Trustworthiness of Service Providers

ABSTRACT

The structure and dimensionality of the trustworthiness construct are important theoretical and practical issues. Building on the work of Ennew and Sekhon and based on a sample of 625 respondents, this research identifies a six-factor structure of trustworthiness of service providers in the retail banking sector: customer orientation, integrity and honesty, communication and similarity, shared values, expertise, and ability and consistency. After assessing the reliability and validity of this factor structure, the study also compares the five alternative models of trustworthiness. Results indicated that the trustworthiness model with the six first-order factors has the best model fit. Higher order confirmatory factor analysis was used to identify three second-order trustworthiness factors, which are competency, openness, and benevolence. The various dimensions of trustworthiness are viewable as levers of improving a bank's trustworthiness in the minds of its current and potential customers.     

Role of source-destination proximity in international inbound tourist arrival: empirical evidences from India

This paper analyses the influence of source-destination proximity on the relationship between three key determinants of foreign tourist arrival and inbound international tourist volume in India. The data have been collected for top 11 source countries for a period of 1992–2013. By classifying source countries based on the air travel duration to the destination, three different clusters emerge. To analyze the data, panel modeling is used with a dependent variable having negative binomial distribution. The results of the overall panel modeling reveal that while Gross National Income (GNI) and Previous Year Arrival (PYA) are significant influence on inbound tourism demand but Relative Destination Price (RDP) is not. Further, the results show that for cluster 1 (nearby countries), only PYA is a significant influence; for cluster 2, PYA and GNI are significant; and for cluster 3, all three factors are significant. The findings have important implications for International Tourism Policy and Destination Marketing Programs.     

Industry Expertise,Information Leakage and the Choice of M&A Advisors

This paper examines the impacts of M&A advisors’ industry expertise on firms’ choice of advisors in mergers and acquisitions. We show that an investment bank's expertise in merger parties’ industries increases its likelihood of being chosen as an advisor, especially when the acquisition is more complex, and when a firm in M&A has less information about the merger counterparty. However, due to the concerns about information leakage to industry rivals through M&A advisors, acquirers are reluctant to share advisors with rival firms in the same industry, and they are more likely to switch to new advisors if their former advisors have advisory relationship with their industry rivals. In addition, we document that advisors with more industry expertise earn higher advisory fees and increase the likelihood of deal completion.     

The Macroeconomic Management of Increased Aid: Policy Lessons from Recent Experience

The authors investigate the macroeconomic challenges created by a surge in aid inflows. They develop an analytical framework for examining possible policy responses to increased aid, in terms of absorption and spending of aid—where the central bank controls absorption, through monetary policy and the sale of foreign exchange, and where the fiscal authority controls spending. Different combinations of absorption and spending lead to different macroeconomic consequences. Evidence from five countries that recently experienced an aid surge (Ethiopia, Ghana, Tanzania, Mozambique, and Uganda) shows no support for aid-related real exchange rate appreciation in these countries, but it does indicate that the fear of Dutch disease played an important part in the policy reaction to aid surges. Fiscal and monetary authorities should coordinate their responses to an aid surge, because an uncoordinated response—typically when the fiscal authority wants to spend aid while the central bank wants to avoid exchange rate appreciation—can have serious negative macroeconomic consequences.