Privately and socially optimal take-overs when acquisition and exclusion strategies are endogenous.

The case for one share, one vote is quite robust to the way the takeover game is played, provide done goes all the way and allows not just toeholds or multiple bids and revisions but also bargaining. But a rule that exclusion should never harm the non-voting shares, or tha tthese shares should be taken over at the pre-bidprice,will do as well, without so severely curtailing a firm's room for security design. Under either rule, all privately beneficial takeovers are socially desirable and vice versa, and the value gains are shared fairly between the current shareholders and the bidder.Research; Impact; Determinants; Firms; Product; Market; Competition; Ownership; Performance; Characteristics; Belgian firms; Control; Companies; Firm performance; International; Portfolio; Variables; Size; Growth; Model; Job; Pricing; Factors; Rules; Data; Benchmarking; Prices; Value; Models; Work; Bias; Variance; Trade; Estimator; Bids; Optimal; Takeovers; Strategy;

Peso effects in the forward bias: evidence from the private ECU.

Forward rates of European currencies against the private and official ECU exhibit a bias similar to the one found in other data: the Cumby-Obstfeld-Fama (COF) regression coefficients are systematically below unity, and two thirds of them are negative. We use the discount of the private ECU relative to the official ECU as a measure of 'diffidence', a term that may cover both sharply fluctuating risk premia as well as Peso risk. Peso risk, in this context, covers not only fears of realignments but also the risk of a meltdown of the private ECU relative to the official one (a notion that receives some support from a time-series analysis of these data). Dichotomizing the data on the basis of the size of the discount in the private ECU), we find that the COF beta strongly depends on the degree of diffidence and that the negative COF coefficients are generated by typically less than 20 percent of the data. If the diffidence factor contains a risk premium, then this risk premium is definitely not the one predicted by Bansal (1997). Nor is the diffidence factor proxying for Huisman et al. (1997)'s transaction-cost effects. Thus, Peso risk remains as a strong candidate explanation for the forward bias in this sample.Effects; Currency; Data; Risk; Time series;

One share, one vote ?.

In the theoretical framework considered in the two seminal contributions, Grossman and Hart (GH, 1988) and Harris and Raviv (HR, 1989), the 'one share, one vote' (1S1V) rule is optimal whether private benefits are enjoyed by the incumbent or the rival. In practice, deviations from 1S1V are frequent. We complete the GH-HR analysis in three ways. First, we give both incumbent and rival management private benefits. Second, we not only examine the behaviour and optimality of feasible rules in a local or ex post sense (i.e. at the moment the rival appears and his characteristics are observed), but we also consider the ex ante problem where the entrepreneur-founder only knows the distribution from which the rival will be drawn. The issue is what set of rules the entrepreneur will put in place, re take-overs, so as to maximise the IPO value of the firm. Lastly, we go beyond the dual-class case, explaining the role and usefulness of multiple-class structures.Characteristics; Corporate control; Takeovers; Management control;

Selecting a bond-pricing model for trading: benchmarking, pooling, and other issues.

Does one make money trading on the deviations between observed bond prices and values proposed by bond-pricing models? We extend Sercu and Wu (1997)'s work to more models and more data, but we especially refine the methodology. In particular, we provide a normal-return benchmark that markedly improves upon the Sercu-Wu ones in terms of noisiness and bias. Trading on the basis of deemed mispricing is profitabe indeed no matter what model one uses, and there is remarkably little difference across models, at least when one re-estimates and trades daily. We observe no relation with various measures of fit in the estimation stage. We also obtain an impression as to how much of the typical deviation consists of mispricing and how much is model mis-estimation or mis-specification. Lastly, we find that pooled time-series and cross-sectional estimation, as applied by e.g. De Munnik and Schotman (1994), does help in stabilizing the parameter, but hardly improves the trader's profits.Benchmarking; Bias; Bonds; Data; Model; Models; Prices; Term structure of interest rates; Time series; Trade; Value;

Selecting a bond-pricing model for trading: benchmarking, pooling, and other issues.

Does one make money trading on the deviations between observed bond prices and values proposed by bondpricing models? We extend Sercu and Wu (1997)'s work to more models and more data, but we especially refine the methodology. Inparticular, we provide a normal-return benchmark that markedly improves upon the Sercu-Wu ones in terms of noisiness and bias, and we demonstrate that model errors contribute more to the variance of residuals-actual minus fitted prices-than pricing errors made by the market. Trading on the basis of deemed mispricing is profitable indeed no matter what model one uses. But there is remarkably little difference across models, at least when on ere-estimates and trades daily;and with pooling and/or longer holding periods the results seem to be all over the place, without any relation with various measures of fit in the estimation stage. We also derive and implement an estimator of how much of the typical deviation consists of mispricing and how much is model mis-estimation or mis-specification.Lastly,we find that pooled time-series and cross-sectional estimation, as applied by e.g. De Munnik and Schotman (1994), does help in stabilizing the parameter, but hardly improves the trader's profits.Research; Impact; Determinants; Firms; Product; Market; Competition; Ownership; Performance; Characteristics; Belgian firms; Control; Companies; Firm performance; International; Portfolio; Variables; Size; Growth; Model; Job; Pricing; Factors; Rules; Data; Benchmarking; Prices; Value; Models; Work; Bias; Variance; Trade; Estimator;

Double bids for dual-class shares.

Confusingly, the seminal contributions on the 'one share, one vote '(1S1V) issue - Grossman and Hart (GH,1988) and Harrisand Raviv (HR,1989)- are quoted as evidence by both proponents and opponents of 1S1V. Infact, GH-HR stress the cases where the rule is optimal, but do acknowledge possible deviations from the optimality of 1S1V(without developing these cases). In light of renewed interest in the relation between shareholder protectionand control arrangements, we first thoroughly review the optimality of 1S1V in the original setting, without the complication of structural enhancements except that both incumbent and rival management can have private benefits simultaneously. After this analysis of the perfect-foresight optimal charter we also consider the imperfect-foresight problem where the entrepreneur-founder only knows the distribution from which the rival will be drawn. The issue is what set of rules the entrepreneur wil lput in place, retake-overs, so as to maximize the IPO value of the firm. We find that, from the founder's perspective, 1S1V is never optimal with imperfect foresight, and optimality is surprisingly rare even with perfect foresight. We also explain why governments rarely step in: from simulations we find that the social impact of the charter choice seems to be far smaller than the private impact (on IPO value or post-take-over value). Lastly, we go beyond the dual-class case, explaining the role and usefulness of multiple-class structures.Research; Impact; Determinants; Firms; Product; Market; Competition; Ownership; Performance; Characteristics; Belgian firms; Control; Companies; Firm performance; International; Portfolio; Variables; Size; Growth; Model; Job; Pricing; Factors; Rules; Data; Benchmarking; Prices; Value; Models; Work; Bias; Variance; Trade; Estimator; Bids;

Thin-trading effects in Beta : Bias v. estimator error.

Thin trading; Market model; Estimator; Bias; Variance; Cost;

Molecular and neurological characterizations of three Saudi families with lipoid proteinosis

<p>Abstract</p> <p>Background</p> <p>Lipoid proteinosis is a rare autosomal recessive disease characterized by cutaneous and mucosal lesions and hoarseness appearing in early childhood. It is caused by homozygous or compound heterozygous mutations in the <it>ECM1 </it>gene. The disease is largely uncharacterized in Arab population and the mutation(s) spectrum in the Arab population is largely unknown. We report the neurologic and neuroradiologic characteristics and <it>ECM1 </it>gene mutations of seven individuals with lipoid proteinosis (LP) from three unrelated consanguineous families.</p> <p>Methods</p> <p>Clinical, neurologic, and neuro-ophthalmologic examinations; skin histopathology; brain CT and MRI; and sequencing of the full<it>ECM1 </it>gene.</p> <p>Results</p> <p>All seven affected individuals had skin scarring and hoarseness from early childhood. The two children in Family 1 had worse skin involvement and worse hoarseness than affected children of Families 2 and 3. Both children in Family 1 were modestly mentally retarded, and one had typical calcifications of the amygdalae on CT scan. Affected individuals in Families 2 and 3 had no grossneurologic, neurodevelopmental, or neuroimaging abnormalities. Skin histopathology was compatible with LP in all three families. Sequencing the full coding region of <it>ECM1 </it>gene revealed two novel mutationsin Family 1 (c.1300-1301delAA) and Family 2 (p.Cys269Tyr) and in Family 3 a previously described 1163 bp deletion starting 34 bp into intron 8.</p> <p>Conclusions</p> <p>These individuals illustrate the neurologic spectrum of LP, including variable mental retardation, personality changes, and mesial temporal calcificationand imply that significant neurologic involvement may be somewhat less common than previously thought. The cause of neurologic abnormalities was not clear from either neuroimaging or from what is known about <it>ECM1 </it>function. The severity of dermatologic abnormalities and hoarseness generally correlated with neurologic abnormalities, with Family 1 being somewhat more affected in all spheres than the other two families. Nevertheless, phenotype-genotype correlation was not obvious, possibly because of difficulty quantifying the neurologic phenotype and because of genetic complexity.</p