Impact of Japanese Mergers on Shareholder Wealth: An Analysis of Bidder and Target Companies

The market for corporate control in the second largest economy in the world behaves very different from that in the U.S. Using a sample of 91 mergers in the period 1982-2003 we document several distinctive features of this market in Japan. First, we show that in stark contrast to the pro-cyclical U.S. merger waves, mergers in Japan tend to be counter-cyclical, both with respect to the general economy as well as with respect to stock market valuations. Second, and again in contrast to the U.S. experience, we find that a significant fraction of Japanese mergers are orchestrated by the main banks; in such cases, mergers are not between two weak companies, but at least one of the merging companies is financially strong. Other distinctive features of Japanese mergers are the positive pre-announcement returns accruing to both bidders and targets, with bidders capturing approximately half the gains that accrue to target firms. We also find differential shareholder wealth effects in the bubble period (1982-1989), the early 1990s, and the post-financial regulation regime (1997-2003). Overall our results point to a market for corporate control that is distinctly less shareholder-centered than that in the U.S. and one where creditors play an important, perhaps dominant, role.mergers;Japanse mergers;corporate control;take-over

Relative Distress and Return Distribution Characteristics of Japanese Stocks, a Fuzzy-Probabilistic Approach

In this article, we demonstrate that a direct relation exists between the context of Japanese firms indicating relative distress and conditional return distribution properties. We map cross-sectional vectors with company characteristics on vectors with return feature vectors, using a fuzzy identification technique called Competitive Exception Learning Algorithm (CELA)1. In this study we use company characteristics that follow from capital structure theory and we relate the recognized conditional return properties to this theory. Using the rules identified by this mapping procedure this approachenables us to make conditional predictions regarding the probability of a stock's or a group of stocks' return series for different return distribution classes (actually return indices). Using these findings, one may construct conditional indices that may serve as benchmarks. These would be particularly useful for tracking and portfolio management.capital structure;asset pricing;fuzzy systems;conditional return distribution;heuristic learning

Doubling: Nick Leeson's trading strategy

This paper examines the trading strategy attributed to Mr. Nicholas Leeson, who was the chief derivatives trader of Barings bank in Singapore. His activities were the main cause of the eventual collapse of Barings bank. Daily information is available for the full period Leeson was active in Singapore, from January 1992 until 1995, for all relevant products. The information includes daily volume, open interest, opening, closing, highest and lowest price. The empirical evidence suggests that Leeson followed a doubling strategy: he continuously doubled his position as prices were falling

Social Interactions and Crime Revisited: An Investigation Using Individual Offender Data in Dutch Neighborhoods

Using data on the age, sex, ethnicity and criminal involvement of 14.3 million residents aged 10-89 residing in 4,007 neighborhoods in the Netherlands, this article tests whether an individual's decision whether or not to be involved in crime is affected by the number of criminals in the neighborhood. Controlling for unobserved neighborhood heterogeneity and endogeneity of this decision, a small positive effect is found on violent crime, but not on property crime. The results suggest that individual characteristics and other neighborhood characteristics play a much greater role in an individual's decision to be involved in crime

Identifying and prioritizing demersal fisheries restricted areas based on combined ecological and fisheries criteria: The western Mediterranean

The western Mediterranean basin is a high marine biodiversity area under severe pressure by changing climate and intense human activities. Beyond national jurisdictions, international institutions such as the General Fisheries Commission for the Mediterranean (GFCM) work towards canalizing a regional consensus that fishing practices should evolve to better support the 2030 Agenda for Sustainable Development. In this context, Fisheries Restricted Areas (FRA) are proposed as effective management measures to contribute towards increasing fisheries sustainability in the region that can be considered, under some conditions, as Nature-based Solutions (NbS); however, how to operationalize their framework remains unclear. In this study, based on combined ecological and fisheries criteria, we identify and prioritize six potential priority areas for management (PAMs) in the western Mediterranean Sea. They are specifically aimed at the protection and recovery of Essential Fish Habitats and the conservation of Vulnerable Marine Ecosystems, whilst requiring limited adaptation of fisheries practices due to their relative low fishing pressure. We compare the identified areas to those that are currently under protection, and to areas that have been proposed for protection at the GFCM. Our results show that the FRAs and other spatial management measures introduced in the last years marginally contribute to the protection PAMs in the western Mediterranean region. However, the adoption of FRAs that are currently under discussion at the GFCM could contribute significantly to improve the situation. FRAs could also contribute to operationalize NbS in the western Mediterranean Sea when properly designed and implemented

The new Dutch timetable: The OR revolution

In December 2006, Netherlands Railways introduced a completely new timetable. Its objective was to facilitate the growth of passenger and freight transport on a highly utilized railway network, and improve the robustness of the timetable resulting in less train delays in the operation. Further adjusting the existing timetable constructed in 1970 was not option anymore, because further growth would then require significant investments in the rail infrastructure. Constructing a railway timetable from scratch for about 5,500 daily trains was a complex problem. To support this process, we generated several timetables using sophisticated operations research techniques, and finally selected and implemented one of these timetables. Furthermore, because rolling-stock and crew costs are principal components of the cost of a passenger railway operator, we used innovative operations research tools to devise efficient schedules for these two resources. The new resource schedules and the increased number of passengers resulted in an additional annual profit of 40 million euros ($60 million) of which about 10 million euros were created by additional revenues. We expect this to increase to 70 million euros ($105 million) annually in the coming years. However, the benefits of the new timetable for the Dutch society as a whole are much greater: more trains are transporting more passengers on the same railway infrastructure, and these trains are arriving and departing on schedule more than they ever have in the past. In addition, the rail transport system will be able to handle future transportation demand growth and thus allow cities to remain accessible. Therefore, people can switch from car transport to rail transport, which will reduce the emission of greenhouse gases.

Impact of Japanese Mergers on Shareholder Wealth: An Analysis of Bidder and Target Companies

The market for corporate control in the second largest economy in the world behaves very different from that in the U.S. Using a sample of 91 mergers in the period 1982-2003 we document several distinctive features of this market in Japan. First, we show that in stark contrast to the pro-cyclical U.S. merger waves, mergers in Japan tend to be counter-cyclical, both with respect to the general economy as well as with respect to stock market valuations. Second, and again in contrast to the U.S. experience, we find that a significant fraction of Japanese mergers are orchestrated by the main banks; in such cases, mergers are not between two weak companies, but at least one of the merging companies is financially strong. Other distinctive features of Japanese mergers are the positive pre-announcement returns accruing to both bidders and targets, with bidders capturing approximately half the gains that accrue to target firms. We also find differential shareholder wealth effects in the bubble period (1982-1989), the early 1990s, and the post-financial regulation regime (1997-2003). Overall our results point to a market for corporate control that is distinctly less shareholder-centered than that in the U.S. and one where creditors play an important, perhaps dominant, role

Dwarfism with joint laxity in Friesian horses is associated with a splice site mutation in B4GALT7

Background: Inbreeding and population bottlenecks in the ancestry of Friesian horses has led to health issues such as dwarfism. The limbs of dwarfs are short and the ribs are protruding inwards at the costochondral junction, while the head and back appear normal. A striking feature of the condition is the flexor tendon laxity that leads to hyperextension of the fetlock joints. The growth plates of dwarfs display disorganized and thickened chondrocyte columns. The aim of this study was to identify the gene defect that causes the recessively inherited trait in Friesian horses to understand the disease process at the molecular level. Results: We have localized the genetic cause of the dwarfism phenotype by a genome wide approach to a 3 Mb region on the p-arm of equine chromosome 14. The DNA of two dwarfs and one control Friesian horse was sequenced completely and we identified the missense mutation ECA14:g.4535550C> T that cosegregated with the phenotype in all Friesians analyzed. The mutation leads to the amino acid substitution p.(Arg17Lys) of xylosylprotein beta 1,4-galactosyltransferase 7 encoded by B4GALT7. The protein is one of the enzymes that synthesize the tetrasaccharide linker between protein and glycosaminoglycan moieties of proteoglycans of the extracellular matrix. The mutation not only affects a conserved arginine codon but also the last nucleotide of the first exon of the gene and we show that it impedes splicing of the primary transcript in cultured fibroblasts from a heterozygous horse. As a result, the level of B4GALT7 mRNA in fibroblasts from a dwarf is only 2 % compared to normal levels. Mutations in B4GALT7 in humans are associated with Ehlers-Danlos syndrome progeroid type 1 and Larsen of Reunion Island syndrome. Growth retardation and ligamentous laxity are common manifestations of these syndromes. Conclusions: We suggest that the identified mutation of equine B4GALT7 leads to the typical dwarfism phenotype in Friesian horses due to deficient splicing of transcripts of the gene. The mutated gene implicates the extracellular matrix in the regular organization of chrondrocyte columns of the growth plate. Conservation of individual amino acids may not be necessary at the protein level but instead may reflect underlying conservation of nucleotide sequence that are required for efficient splicing

Doubling: Nick Leeson's trading strategy

This paper examines the trading strategy attributed to Mr. Nicholas Leeson, who was the chief derivatives trader of Barings bank in Singapore. His activities were the main cause of the eventual collapse of Barings bank. Daily information is available for the full period Leeson was active in Singapore, from January 1992 until 1995, for all relevant products. The information includes daily volume, open interest, opening, closing, highest and lowest price. The empirical evidence suggests that Leeson followed a doubling strategy: he continuously doubled his position as prices were falling

A nonsense mutation in B3GALNT2 is concordant with hydrocephalus in Friesian horses

Background: Hydrocephalus in Friesian horses is a developmental disorder that often results in stillbirth of affected foals and dystocia in dams. The occurrence is probably related to a founder effect and inbreeding in the population. The aim of our study was to find genomic associations, to investigate the mode of inheritance, to allow a DNA test for hydrocephalus in Friesian horses to be developed. In case of a monogenic inheritance we aimed to identify the causal mutation. Results: A genome-wide association study of hydrocephalus in 13 cases and 69 controls using 29,720 SNPs indicated the involvement of a region on ECA1 (P T corresponding to XP_001491595 p.Gln475* was identical to a B3GALNT2 mutation identified in a human case of muscular dystrophy-dystroglycanopathy with hydrocephalus. All 16 available cases and none of the controls were homozygous for the mutation, and all 17 obligate carriers (= dams of cases) were heterozygous. A random sample of the Friesian horse population (n = 865) was tested for the mutation in a commercial laboratory. One-hundred and forty-seven horses were carrier and 718 horses were homozygous for the normal allele; the estimated allele frequency in the Friesian horse population is 0.085. Conclusions: Hydrocephalus in Friesian horses has an autosomal recessive mode of inheritance. A nonsense mutation XM_001491545 c.1423C>T corresponding to XP_001491595 p.Gln475* in B3GALNT2 (1: 75,859,296-75,909,376) is concordant with hydrocephalus in Friesian horses. Application of a DNA test in the breeding programme will reduce the losses caused by hydrocephalus in the Friesian horse population