Causes and Effects of Corporate Refocusing Programs

We provide evidence that corporate refocusing are motivated, in part, by the desire to enhance shareholder value, but that it is often necessary for agency problems to be reduced before managers will begin divestiture programs. Diversified firms that refocus have significantly greater value losses from their diversification policies than multisegment firms that do not refocus. Major events of market discipline usually must occur, however, before managers attempt to undo suboptimal diversification programs, whereas the same events occur only rarely for a matched sample of nonrefocusing firms during the same time frame. Refocusing firms have a high frequency of CEO changes, and also often have new outside blockholders, unsuccessful takeover bids, and signs of financial distress in the period preceding their divestitures. Finally, we find that the cumulative abnormal returns over all of the refocusing-related announcements of a refocusing firm average 7.3%, and that these abnormal returns are significantly related to the amount of value that was being destroyed by the refocuser’s diversification policy

Causes and Effects of Corporate Refocusing Programs

We provide evidence that corporate refocusing are motivated, in part, by the desire to enhance shareholder value, but that it is often necessary for agency problems to be reduced before managers will begin divestiture programs. Diversified firms that refocus have significantly greater value losses from their diversification policies than multisegment firms that do not refocus. Major events of market discipline usually must occur, however, before managers attempt to undo suboptimal diversification programs, whereas the same events occur only rarely for a matched sample of nonrefocusing firms during the same time frame. Refocusing firms have a high frequency of CEO changes, and also often have new outside blockholders, unsuccessful takeover bids, and signs of financial distress in the period preceding their divestitures. Finally, we find that the cumulative abnormal returns over all of the refocusing-related announcements of a refocusing firm average 7.3%, and that these abnormal returns are significantly related to the amount of value that was being destroyed by the refocuser’s diversification policy

Managerial Entrenchment and Capital Structure Decisions

We study associations between managerial entrenchment and firms’ capital structures, with results generally suggesting that entrenched CEOs seek to avoid debt. In a cross-sectional analysis, we find that leverage levels are lower when CEOs do not face pressure from either ownership and compensation incentives or active monitoring. In an analysis of leverage changes, we find that leverage increases in the aftermath of entrenchment-reducing shocks to managerial security, including unsuccessful tender offers, involuntary CEO replacements, and the addition to the board of major stockholders

Managerial Entrenchment and Capital Structure Decisions

We test the prediction that leverage is inversely associated with managerial entrenchment. We examine leverage levels and year-to-year changes for several hundred firms between 1984 and 1991. We find that leverage levels are positively related to CEO stock ownership and CEO stock option holdings, and negatively related to CEO tenure and board of directors size. While generally consistent with less entrenched CEOs pursuing more leverage, these results are subject to alternative interpretations. We therefore analyze year-to-year changes in leverage around exogenous shocks to corporate governance variables. We find that leverage increases after unsuccessful tender offers and “forced” CEO replacements, and under certain conditions after the arrival of major stockholders. These relations have greater magnitude when the sample is restricted to low-leverage firms, even when 80% of firms are defined as low-leverage. The results are consistent with decreases in entrenchment leading to increases in leverage, and with the majority of firms having less debt than optimal

Managerial Entrenchment and Capital Structure Decisions

We test the prediction that leverage is inversely associated with managerial entrenchment. We examine leverage levels and year-to-year changes for several hundred firms between 1984 and 1991. We find that leverage levels are positively related to CEO stock ownership and CEO stock option holdings, and negatively related to CEO tenure and board of directors size. While generally consistent with less entrenched CEOs pursuing more leverage, these results are subject to alternative interpretations. We therefore analyze year-to-year changes in leverage around exogenous shocks to corporate governance variables. We find that leverage increases after unsuccessful tender offers and “forced” CEO replacements, and under certain conditions after the arrival of major stockholders. These relations have greater magnitude when the sample is restricted to low-leverage firms, even when 80% of firms are defined as low-leverage. The results are consistent with decreases in entrenchment leading to increases in leverage, and with the majority of firms having less debt than optimal

Ariel - Volume 4 Number 6

Editors David A. Jacoby Eugenia Miller Tom Williams Associate Editors Paul Bialas Terry Burt Michael Leo Gail Tenikat Editor Emeritus and Business Manager Richard J. Bonnano Movie Editor Robert Breckenridge Staff Richard Blutstein Mary F. Buechler J.D. Kanofsky Rocket Weber David Maye

‘Priming’ exercise and O2 uptake kinetics during treadmill running

We tested the hypothesis that priming exercise would speed kinetics during treadmill running. Eight subjects completed a square-wave protocol, involving two bouts of treadmill running at 70% of the difference between the running speeds at lactate threshold (LT) and max, separated by 6-min of walking at 4 km h−1, on two occasions. Oxygen uptake was measured breath-by-breath and subsequently modelled using non-linear regression techniques. Heart rate and blood lactate concentration were significantly elevated prior to the second exercise bout compared to the first. However, kinetics was not significantly different between the first and second exercise bouts (mean ± S.D., phase II time constant, Bout 1: 16 ± 3 s vs. Bout 2: 16 ± 4 s; slow component amplitude, Bout 1: 0.24 ± 0.10 L min−1vs. Bout 2: 0.20 ± 0.12 L min−1; mean response time, Bout 1: 34 ± 4 s vs. Bout 2: 34 ± 6 s; P > 0.05 for all comparisons). These results indicate that, contrary to previous findings with other exercise modalities, priming exercise does not alter kinetics during high-intensity treadmill running, at least in physically active young subjects. We speculate that the relatively fast kinetics and the relatively small slow component in the control (‘un-primed’) condition negated any enhancement of kinetics by priming exercise in this exercise modality

The homotopy theory of simplicial props

The category of (colored) props is an enhancement of the category of colored operads, and thus of the category of small categories. In this paper, the second in a series on "higher props," we show that the category of all small colored simplicial props admits a cofibrantly generated model category structure. With this model structure, the forgetful functor from props to operads is a right Quillen functor.Comment: Final version, to appear in Israel J. Mat

Group actions on Segal operads

We give a Quillen equivalence between model structures for simplicial operads, described via the theory of operads, and Segal operads, thought of as certain reduced dendroidal spaces. We then extend this result to give an Quillen equivalence between the model structures for simplicial operads equipped with a group action and the corresponding Segal operads.Comment: Revised version. Accepted to Isr J Mat

Bridging Alone: Religious Conservatism, Marital Homogamy, and Voluntary Association Membership

This study characterizes social insularity of religiously conservative American married couples by examining patterns of voluntary associationmembership. Constructing a dataset of 3938 marital dyads from the second wave of the National Survey of Families and Households, the author investigates whether conservative religious homogamy encourages membership in religious voluntary groups and discourages membership in secular voluntary groups. Results indicate that couples’ shared affiliation with conservative denominations, paired with beliefs in biblical authority and inerrancy, increases the likelihood of religious group membership for husbands and wives and reduces the likelihood of secular group membership for wives, but not for husbands. The social insularity of conservative religious groups appears to be reinforced by homogamy—particularly by wives who share faith with husbands