The Long-Run Performance of Hostile Takeovers: UK Evidence

This paper examines the long-run pre- and post-takeover performance of hostile takeovers in the U.K. from 1985-96. Prior to takeover, targets in hostile takeovers experience a significant deterioration in profit returns, and significantly negative share returns. However, there is little evidence that profit levels are lower than those of non- merging firms. Bidders in hostile takeovers are not superior performers in terms of profit levels, although share returns are significantly high prior to takeover. However, in the post-takeover period hostile takeovers show significant improvements in profit returns, which are associated with significant asset disposals. In contrast, friendly takeovers do not improve profit returns and result in significantly negative long-run share returns. We find no evidence of an inverse relation between the performance improvement in hostile takeovers and the pre-takeover performance of the target. We interpret the results to indicate that although hostile takeovers improve performance, there is little evidence that they play an important role in reversing the nonvalue maximizing behaviour of target companies.Hostile takeovers; friendly takeovers; disciplinary hypothesis; pre-takeover performance; post-takeover performance

Managerial Discretion and Takeover Performance

We investigate the relation between long run takeover performance and board share ownership in the acquiring company for a sample of 142 UK takeovers completed between 1985-95. We find evidence of a non-linear relationship both between board ownership and takeover profitability, and between board ownership and post-takeover share returns. We cast the analysis in a simultaneous equations framework using non- linear two-stage least squares, and find that our results are robust to this alternative specification. The results are therefore consistent with a managerial alignment / entrenchment trade-off.Corporate takeovers; board ownership; profitability; long run share returns

Seasonal Parameterizations of the Tau-Omega Model Using the ComRAD Ground-Based SMAP Simulator

NASA's Soil Moisture Active Passive (SMAP) mission is scheduled for launch in November 2014. In the prelaunch time frame, the SMAP team has focused on improving retrieval algorithms for the various SMAP baseline data products. The SMAP passive-only soil moisture product depends on accurate parameterization of the tau-omega model to achieve the required accuracy in soil moisture retrieval. During a field experiment (APEX12) conducted in the summer of 2012 under dry conditions in Maryland, the Combined Radar/Radiometer (ComRAD) truck-based SMAP simulator collected active/passive microwave time series data at the SMAP incident angle of 40 degrees over corn and soybeans throughout the crop growth cycle. A similar experiment was conducted only over corn in 2002 under normal moist conditions. Data from these two experiments will be analyzed and compared to evaluate how changes in vegetation conditions throughout the growing season in both a drought and normal year can affect parameterizations in the tau-omega model for more accurate soil moisture retrieval

Determinants of voluntary audit and voluntary full accounts in micro- and non-micro small companies in the UK

This is an Author's Accepted Manuscript of an article published in Accounting and Business Research, 42(4), 441 - 468, 2012, copyright Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/00014788.2012.667969.This study investigates the link between the auditing and filing choices made by a sample of 592 small private companies, which includes 419 micro-companies. It examines decisions made in connection with the 2006 accounts following UK's adoption of the maximum EU size thresholds in 2004, and the impact of the proposed Directive on the annual accounts of micro-companies. The research extends the model of cost, management and agency factors associated with voluntary audit, and develops a complementary model for voluntary full accounts. The results show the benefits of placing full audited accounts on public record that outweigh the costs for a significant proportion of companies. In non-micro small companies, voluntary audit is determined by cost and agency factors, whereas in micro-companies it is driven by cost, management and agency factors. In both groups, the predictors of voluntary full accounts include management and agency factors, and choosing voluntary audit is one of the key factors. The study provides models that can be tested in other jurisdictions to provide evidence of the needs of micro-companies, and the discussion of the methodological challenges for small company researchers in the UK makes further contribution to the literature

Microwave Soil Moisture Retrieval Under Trees

Soil moisture is recognized as an important component of the water, energy, and carbon cycles at the interface between the Earth's surface and atmosphere. Current baseline soil moisture retrieval algorithms for microwave space missions have been developed and validated only over grasslands, agricultural crops, and generally light to moderate vegetation. Tree areas have commonly been excluded from operational soil moisture retrieval plans due to the large expected impact of trees on masking the microwave response to the underlying soil moisture. Our understanding of the microwave properties of trees of various sizes and their effect on soil moisture retrieval algorithms at L band is presently limited, although research efforts are ongoing in Europe, the United States, and elsewhere to remedy this situation. As part of this research, a coordinated sequence of field measurements involving the ComRAD (for Combined Radar/Radiometer) active/passive microwave truck instrument system has been undertaken. Jointly developed and operated by NASA Goddard Space Flight Center and George Washington University, ComRAD consists of dual-polarized 1.4 GHz total-power radiometers (LH, LV) and a quad-polarized 1.25 GHz L band radar sharing a single parabolic dish antenna with a novel broadband stacked patch dual-polarized feed, a quad-polarized 4.75 GHz C band radar, and a single channel 10 GHz XHH radar. The instruments are deployed on a mobile truck with an 19-m hydraulic boom and share common control software; real-time calibrated signals, and the capability for automated data collection for unattended operation. Most microwave soil moisture retrieval algorithms developed for use at L band frequencies are based on the tau-omega model, a simplified zero-order radiative transfer approach where scattering is largely ignored and vegetation canopies are generally treated as a bulk attenuating layer. In this approach, vegetation effects are parameterized by tau and omega, the microwave vegetation opacity and single scattering albedo. One goal of our current research is to determine whether the tau-omega model can work for tree canopies given the increased scatter from trees compared to grasses and crops, and. if so, what are effective values for tau and omega for trees

CEO pay, shareholder returns, and accounting profits

We assess the impact on CEO pay (including salary, cash bonus, and benefits in kind) of changes in both accounting and shareholder returns in 99 British companies in the years 1972-89. After correcting for heterogeneity biases inherent in the standard specifications of the problem, we find a strong positive relationship between CEO pay and within-company changes in shareholder returns, and no statistically significant relationship between CEO pay and within-company changes in accounting returns. Differences between firms in long-term average profitability do appear to have a substantial effect on CEO pay, while differences between firms in shareholder returns add nothing to the within-firm pay dynamics.These findings call into question the rationale for explicitly share-based incentive schemes

Development of SMAP Mission Cal/Val Activities

The Soil Moisture Active Passive (SMAP) mission is a NASA directed mission to map global land surface soil moisture and freeze-thaw state. Instrument and mission details are shown. The key SMAP soil moisture product is provided at 10 km resolution with 0.04cubic cm/cubic cm accuracy. The freeze/thaw product is provided at 3 km resolution and 80% frozen-thawed classification accuracy. The full list of SMAP data products is shown

The impact of board size on firm performance: evidence from the UK

We examine the impact of board size on firm performance for a large sample of 2746 UK listed firms over 1981-2002. The UK provides an interesting institutional setting, because UK boards play a weak monitoring role and therefore any negative effect of large board size is likely to reflect the malfunction of the board's advisory rather than monitoring role. We find that board size has a strong negative impact on profitability, Tobin's Q and share returns. This result is robust across econometric models that control for different types of endogeneity. We find no evidence that firm characteristics that determine board size in the UK lead to a more positive board size-firm performance relation. In contrast, we find that the negative relation is strongest for large firms, which tend to have larger boards. Overall, our evidence supports the argument that problems of poor communication and decision-making undermine the effectiveness of large boards

A panel analysis of UK industrial company failure

We examine the failure determinants for large quoted UK industrials using a panel data set comprising 539 firms observed over the period 1988-93. The empirical design employs data from company accounts and is based on Chamberlain’s conditional binomial logit model, which allows for unobservable, firm-specific, time-invariant factors associated with failure risk. We find a noticeable degree of heterogeneity across the sample companies. Our panel results show that, after controlling for unobservables, lower liquidity measured by the quick assets ratio, slower turnover proxied by the ratio of debtors turnover, and profitability were linked to the higher risk of insolvency in the analysis period. The findings appear to support the proposition that the current cash-flow considerations, rather than the future prospects of the firm, determined company failures over the 1990s recession