Intra-Industry Reactions to Stock Split Announcements

We examine whether favorable information conveyed by stock split announcements transfers to nonsplitting firms within the same industry. On average, nonsplitting firms' shareholders experience positive and significant abnormal returns at the stock split announcements of their industry counterparts. In addition, industrywide and firm-specific characteristics are important determinants in explaining nonsplitting firms' stock returns. These firms' earnings increase significantly, and the earnings changes are positively related to the stock price reactions. Finally, we find no evidence that investors revise the value of nonsplitting firms because they anticipate a decline in earnings volatility.     

Redistributive Tax and Growth in a Model with Discrete Occupational Choice

An optimal redistributive tax-subsidy formula is derived for a growth model where income inequality is endogenously driven by an adult's choice of occupation between work and management. Investment in human capital is the engine of growth. The world's stock of exploitable knowledge as well as the economy's average human capital determine the potential rate of return from investment in human capital in an economy. How much available knowledge would be exploited in the economy depends on the proportion of innovators in our model. A redistributive tax reform impacts growth as well as income inequality via its influence over the occupational choice. The optimal redistributive tax rate is path-dependent in the sense that it depends on the initial wealth distribution. The normative implication of the model is that the optimal capital income tax rate could very well be positive if the initial wealth inequality exceeds a threshold. The optimal capital income tax rate depends inversely on the initial wealth inequality.     

Do quality perceptions of health and social services vary for different ethnic groups? An empirical investigation

The United States is now more ethnically diverse than any other time in its history. In 2000, minority ethnic groups comprised 26% of the US population; by 2010, they comprise 35%, and in 2080 they will form the majority of American citizens. And among these ethnic groups, African Americans (12.4%), Hispanics (15.4%) and Asians (4.4%) were the most predominant in 2000. The growth of this segment of the population is not only in terms of numbers but also in terms of economic development. Minority groups are showing marked improvement in income and education levels leading to greater purchasing power. As a result, for‐profit companies are increasingly targeting minority populations with products and promotions specifically designed for specific minority groups. Even non profit organizations such as educational programs, social service and healthcare agencies are striving to design specific services and culturally competent outreach models in order to serve this increasingly diverse marketplace. But despite the strides made by non profit agencies, several studies note the tremendous disparities between the ethnic and racial groups in the seeking and the receipt of health‐care and social services. Additionally, there is limited empirical information about the perceptions of minority consumers. In order to effectively serve minority groups, it is essential to understand their experiences with the non profit service industry and to assess their ongoing concerns. In this study, we focus on two critical components of the non profit world – healthcare and social services. We conducted a survey to compare and contrast the social service and health‐care quality perceptions of three ethnic groups: Caucasians, African‐Americans and Hispanics. Our study, undertaken in collaboration with community health centers, reveals distinct differences in perceptions between the three ethnic groups. Based on our findings, we outline a set of implementable strategies for social service and community health organizations. Copyright © 2010 John Wiley & Sons, Ltd.     

Unionization and International Market Share Rivalry: A Paradox

Two exporting firms (domestic and foreign) are considered which are symmetric in all respects except that one is unionized while the other faces a competitive labor market. Under free trade the unionized firm has the lower market share. Paradoxically, in the policy equilibrium, the unionized firm has the larger market share. Consequently, the nation hosting the unionized firm has the higher welfare level.     

Unionized Bertrand Duopoly and Strategic Export Policy

The paper reports that an export subsidy is optimal for a unionized Bertrand duopoly. Following results published by Brander and Spencer ( Journal of International Economics , 1988, pp. 217–34), this establishes the robustness of export subsidization to the mode of competition (Cournot or Bertrand), and contrasts with nonunion results in the literature. If both firms are unionized and both governments pursue active trade policies, a subsidy remains optimal except for a narrow range of extreme substitutability between products. Nations with a lower opportunity cost of labor employ more aggressive policies in equilibrium.