Ownership, competition, and financial disclosure

Empirical research on firms’ (dis)incentives to disclose investigates the effects of a range of variables including information asymmetry, agency costs, political costs, and proprietary costs. Verrecchia (2001) argues that economic-based models of disclosure must establish a link between financial reporting and its economic consequences. In response to Verrecchia (2001) and drawing on the industrial organization and strategic management disciplines we introduce a new variable (measuring insider ownership and industry competition) which links both the internal and external environments of the firm and demonstrate that it adds to our understanding of discretionary financial disclosure decisions. We test the model by examining voluntary segment disclosures in Australian firms. We find that our new variable linking the internal and external environment of the firm, alongside previously tested variables including ownership diffusion, return and size is significant. We conduct a series of robustness tests on our model and find that the significance of the model is robust to the inclusion of variables measuring the change in standard, acquisitions and disposals and cross listing on the US stock exchange

Fatty liver disease and risk of all cause and cause-specific mortality outcomes in the older population

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Exchange rates and target premia in the United States

This paper re-examines the relationship between the target takeover premia and the level of the exchange rate in pure domestic target-domestic bid der takeovers. We estimate the level and nature of exchange rate exposure for 189 U.S. targets between 1990 and 2000 and relate market model cumulative abnormal returns to the type of exposure, firm and bid characteristics. We report that targets that are negatively exposed to exchange rates and are acquired during periods of weak domestic exchange rates have higher premia than similar firms acquired during strong exchange rate periods. Likewise, bidders pay more for positively exposed targets when the exchange rate is strong as compared to other times. The results are robust to several specifications of exchange rate exposure and to the inclusion of control variables traditionally used to explain the cross-sectional variation in target returns. The paper contributes to our understanding of the exchange rate effect by showing that once the direction of the exchange rate exposure is taken into account, exchange rates significantly influence the sign and magnitude of pure domestic target premia

Investments: Concepts and applications. 5th Edition

Australiaxxvi, 741 p.; 25 c

The Interaction of Post-Acquisition Integration and Acquisition Focus in Relation to Long-Run Performance

We examine the joint influence of post-acquisition integration management and acquisition focus on long-run post-acquisition performance. We develop a financial measure related to integration that is based on changes in net purchases/disposals of physical assets. For a sample of acquisitions by Australian listed firms, we find that the main effects and the interaction of our integration measure and focus are related to performance in the direction suggested by theory. Our results suggest that inconsistencies in previous studies of the focus-performance relation are partly explained by the failure to consider the post-acquisition asset management strategies

The international transmission of arbitrage information across futures markets

The paper examines whether deviations from a domestic spot-futures relation, as identified through mispricing series in stock index futures, spillover international boundaries. Such spillovers suggest that information from a mispricing series in one market conveys a signal of similar mispricing in another market. In the presence of arbitrage traders and in the absence of market frictions, mispricing series should be independent across international boundaries. The study employs a VAR analysis of stock index futures mispricing across Australia, the UK and USA. Using time zone differences, tests are conducted for the daily transmission of arbitrage information. The results reveal the relationship between mispricing series is bi-directional. Based on this finding, a trading strategy is employed to examine the economic significance of apparent profits. The results show that some profits are possible but that a long horizon, probably beyond the scope of most traders, is required to exploit the spillover information