The Hidden Costs of Political Sponsorship of Industrial Firms

Keyword(s):  
2008 ◽  
Vol 16 (1) ◽  
pp. 59-76 ◽  
Author(s):  
Robyn McLaughlin ◽  
Assem Safieddine

PurposeThis paper seeks to examine the potential for regulation to reduce information asymmetries between firm insiders and outside investors.Design/methodology/approachExtensive prior research has established that there are substantial effects of information asymmetry in seasoned equity offers (SEOs). The paper tests for a mitigating effect of regulation on such information asymmetries by examining differences in long‐run operating performance, changes in that performance, and announcement‐period stock returns between unregulated industrial firms and regulated utilities that issue seasoned equity. The authors also segment the samples by firm size, since smaller firms are likely to have greater asymmetries.FindingsConsistent with regulated utility firms having lower levels of information asymmetry, they have superior changes in abnormal operating performance than industrial firms pre‐ to post‐issue and their announcement period returns are significantly less negative. These findings are most pronounced for the smallest firms, firms likely to have the greatest information asymmetries and where regulation could have its greatest effect.Research limitations/implicationsThe paper does not examine costs of regulation. Thus, future research could seek to measure the cost/benefit trade‐off of regulation in reducing information asymmetry. Also, future research could examine cross‐sectional differences between different industries and regulated utilities.Practical implicationsRegulation reduces information asymmetry. Thus, regulation or mandated disclosure may be appropriate in industries/markets where information asymmetry is severe.Originality/valueThis paper is the first to compare the operating performance of regulated and unregulated SEO firms.


2010 ◽  
Vol 11 (3) ◽  
pp. 295-308 ◽  
Author(s):  
Luis Otávio Façanha ◽  
Marcelo Resende

2021 ◽  
pp. 102410
Author(s):  
Zaiwen Ni ◽  
Libing Fang ◽  
Haiyue Liu ◽  
Xinyu Lu
Keyword(s):  

2009 ◽  
Vol 18 (8) ◽  
pp. 500-514 ◽  
Author(s):  
Elena Fraj-Andrés ◽  
Eva Martínez-Salinas ◽  
Jorge Matute-Vallejo

Author(s):  
Sean Adams

The United States underwent massive economic change in the four decades following the end of the American Civil War in 1865. A vibrant industrial economy catapulted the nation to a world leader in mining and manufacturing; the agricultural sector overcame organizational and technological challenges to increase productivity; and the innovations in financial, accounting, and marketing methods laid the foundation for a powerful economy that would dominate the globe in the 20th century. The emergence of this economy, however, did not come without challenges. Workers in both the industrial and agricultural sectors offered an alternative path for the American economy in the form of labor strikes and populist reforms; their attempts to disrupt the growing concentration of wealth and power played out in both the polls and the factory floor. Movements that sought to regulate the growth of large industrial firms and railroads failed to produce much meaningful policy, even as they raised major critiques of the emerging economic order. In the end, a form of industrial capitalism emerged that used large corporate structures, relatively weak unions, and limited government interventions to build a dynamic, but unbalanced, economic order in the United States.


1988 ◽  
Vol 2 (2) ◽  
pp. 91-97 ◽  
Author(s):  
William A. Weimer

Continuing education has become a large market with participation by industrial firms, educational institutions and firms in the business of education. Both education and industry should develop strategies for their involvement in continuing education. Both should commit to the concept of lifelong learning as essential for their success. Both should consider cooperative projects as one of the most cost-effective ways of providing continuing education. Both should improve communication with each other to improve our capability to identify appropriate joint projects and to improve our management of them.


1984 ◽  
Vol 13 (4) ◽  
pp. 270-271
Author(s):  
Timothy L. Wilson
Keyword(s):  

2018 ◽  
Vol 86 (3) ◽  
pp. 547-566
Author(s):  
Yong Liu

A few cities and provinces in China have implemented vertical administrative integration of environmental monitoring to the provincial level as a response to severe environmental pollution. This study used an adaptive agent-based simulation model to explore whether the reform might effectively motivate polluting industrial firms to improve their environmental behaviour. Simulation results found that the reform might not effectively motivate the desired improvements in environmental behaviour unless policy-makers improve individual enterprises’ financial capacities, enhance their subsidies, and encourage managers to improve their environmental awareness. These findings could be used in the vertical administrative reform efforts to help achieve the reform’s success. Points for practitioners The vertical reform needs to be sufficiently systematic across its governmental structure because it cannot operate in isolation. It is a part of the country’s complex economic, social, and environmental societal system. Combining administrative restructuring with regulation of micro-agents’ behaviour might increase the reform’s likelihood of success, and financial policies might improve preventive/enthusiastic environmental behaviour. A sophisticated policy approach, such as encouraging preventive/enthusiastic environmental behaviour through business opportunities, might ease behavioural change.


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