Competitiveness of Egyptian cotton exports in the international market

Cotton plays a vital role in the Egyptian economy by meeting domestic and export demands,contributing significantly to agriculture,industry,export earnings,and providing a cash income to roughly one million small farmers.This paper examines the competitiveness of Egyptian cotton exports（ECE） in the international market during the period 1990-2006.It mainly aims at investigating the trends in cotton exports over the studied period,analyzing the competitive position of Egyptian cotton by employing several economic and trade indices,and identifying the key factors that influence Egypt＇s cotton exports to the world.The results revealed that the total quantity of ECE has fallen from 196.8 thousand tons in 2003 to 87.2 thousand tons in 2006.It also shows a high degree of geographic concentration of ECE,into India,Italy,the Republic of Korea,and Japan.Together,these markets imported about 50%of ECE during 1990-2006.The competitive advantage of Egyptian cotton would appear dependent on quality not price.Japan,the Republic of Korea and Italy presented the most stable markets for ECE.Linear regression analysis suggests that a one percent increase in the Egypt-to-USA export price ratio leads to a decrease in ECE by about 27.8 thousand tons.Such analysis has also shown a positive and significant effect of the World Trade Organization on ECE.     

Random incentive systems in a dynamic choice experiment

Experiments frequently use a random incentive system (RIS), where only tasks that are randomly selected at the end of the experiment are for real. The most common type pays every subject one out of her multiple tasks (within-subjects randomization). Recently, another type has become popular, where a subset of subjects is randomly selected, and only these subjects receive one real payment (between-subjects randomization). In earlier tests with simple, static tasks, RISs performed well. The present study investigates RISs in a more complex, dynamic choice experiment. We find that between-subjects randomization reduces risk aversion. While within-subjects randomization delivers unbiased measurements of risk aversion, it does not eliminate carry-over effects from previous tasks. Both types generate an increase in subjects’ error rates. These results suggest that caution is warranted when applying RISs to more complex and dynamic tasks.     

Leverage and Corporate Performance: Evidence from Unsuccessful Takeovers

This paper finds that, on average, targets that terminate takeover offers significantly increase their leverage ratios. Targets that increase their leverage ratios the most reduce capital expenditures, sell assets, reduce employment, increase focus, and realize cash flows and share prices that outperform their benchmarks in the five years following the failed takeover. Our evidence suggests that leverage-increasing targets act in the interests of shareholders when they terminate takeover offers and that higher leverage helps firms remain independent not because it entrenches managers, but because it commits managers to making the improvements that would be made by potential raiders.     

Momentum and industry growth

In this paper, we find that individual stock momentum varies almost monotonically with industry growth. Firms in the highest industry growth quintile have significantly higher momentum compared to those in the lowest growth quintile. We find that the above-average growth group within each quintile has significantly higher momentum profits than the below-average group. Further, momentum profits of the highest industry growth quintile are always higher than those for the universe of firms, suggesting an economic benefit to stratifying firms based on industry growth and relative company growth intra-industry, while following a momentum investment strategy.     

Investor Protection and Governance in the Valuation of Emerging Markets Investments

The combination of ineffective corporate governance at the company level and an uncertain legal and regulatory environment can significantly reduce the prices investors are willing to pay when investing in companies in emerging markets. The authors report the findings of their recent survey that asks investment professionals to compare the value of a hypothetical Australian company with that of its identical counterparts located in five emerging markets: Malaysia, Mexico, Saudi Arabia, South Africa, and Iran. The responding investors said they would value the emerging markets investments at discounts from the value of the Australian company that ranged from a low of 13.5% for its Malaysian counterpart to 51.2% for the Iranian company. Moreover, they indicated they would require costs of equity for these investments that were consistent with even larger valuation discounts. The investors' responses to the survey also suggest that corporate governance is especially important in countries with weaker investor protection. Well‐governed companies located in these countries enjoy significant value premiums that can partly offset the negative effect of the poor institutional environments, which suggests there may be a significant payoff for investors that succeed in improving the governance of the companies they invest in.     

MARKET EXPECTATIONS AND THE VALUATION EFFECTS OF EQUITY ISSUANCE

We examine how the wealth effects of equity offers are influenced by investors' expectation of the equity type (public or private) to be issued. Firms deviating to the public market may be issuing when information asymmetry or agency costs are high, and their wealth effects are more negative than for firms that are anticipated to issue equity publicly. Firms deviating to the private market, however, may signal firm undervaluation or monitoring benefits and experience more positive wealth effects than firms that are expected to issue equity privately. For the private issues, public market accessibility appears to influence the wealth effects.     

THE LONG-RUN PERFORMANCE OF CONVERTIBLE DEBT ISSUERS

We examine the long-run operating and stock price performance of 828 convertible debt issuers. Relative to matched, nonissuing firms, convertible debt issuers have small improvements in operating performance before the offer and significant declines in operating performance from pre- to post-issue. We examine the relation between several factors and operating performance. We find that for some pre- to post-issue periods, operating performance changes are positively related to firm leverage and the callability of the bond, and negatively related to performance run-up before the offer and investment in new assets. We also find some evidence that firms that issued equity in the three years before their convertible debt issue have larger declines in performance after the offer. Relative to matched, nonissuing firms, convertible debt issuers have superior stock price performance before the offer and significantly poor performance after the issue.