M&A Movements: An Analysis of Patterns of Indian Trends

Indian industrial landscape had been completely redrawn by the forces of globalization, deregulation and unprecedented technological advancements for the last three decades. Corporate enterprises have responded to the competitive pressures unleashed by these forces through extensive repositioning activities involving corporate restructuring in general and mergers and acquisitions (M&As) in particular. This article has carried out a survey of Indian M&As for different industry groups by creating a database of 1990–2011 to find the presence of M&As waves in India. Empirical construct revealed the trends of Indian M&As for 24 industry groups and identified three distinct waves of M&As. The survey of Indian M&As has revealed that there was a significant reduction of Indian M&As in international deals than domestic deals during the economic recession period (2008–2009). Using VAR and VECM model, it emerged that M&As waves for different sectors of Indian industry move in the same cyclical pattern. Their behaviour, apparently independent corporate decisions, are most likely affected by the conditions of the economy, which may be changed by various macroeconomic factors which are in line with the findings of several other studies. This study contributes towards finding the answer to this question by establishing the underlying common factors that cause the cyclical behaviour in all the M&A waves. This article also establishes the basic interdependence and co-movements between the waves, and how this interdependence changed over time.

Are defined contribution (DC) pension funds a stabilising factor in equity markets? Evidence from Chile, Italy, Mexico and Poland

We analyse the investment behaviour of the defined contribution (DC) pension fund sector in equity markets during and after the 2008–2009 financial crisis until the years 2014–2016 and here for Chile, Mexico, Poland, and Italy. We employ quarterly data on equity purchases and sales and on cash flow at the level of the whole pension sector. Applied are the following methods: analysis of average quarterly transactions; scatter plot analysis of the relation between average quarterly net purchases and quarterly changes in asset value, a correlation analysis of average quarterly transactions in the equity market and its index values, regression analysis of average quarterly transactions in the equity market and its index values. The results indicate that in Poland and Italy, pension funds behaved counter-cyclically, whereas in Chile there are some signs, although less statistically significant, of pro-cyclical behaviour. In the case of Mexico no conclusions could be drawn. The investment behaviour of pension funds might be influenced not only by their strategic decisions but also by other factors that are related to the institutional framework they operate within (e.g. a strategic asset allocation benchmark may induce pro-cyclicality).

Dynamic wage bargaining and labour market fluctuations: the role of productivity shocks

In this paper, we explore the way in which different bargaining settings affect labour market fluctuations by means of an analytical apparatus that has never been used for this purpose. Specifically, modelling wage negotiations as a problem of stochastic optimal control, we analyze how productivity disturbances shape the dynamics of output, employment, and wages by focusing on the way in which firms’ technology and workers’ preferences interact with the adjustment rules of employment underlying the bargaining process. With a quadratic production function and risk averse workers, we show that wage negotiation outcomes whose employment adjustments go in the direction of the labour demand of the firms match the cyclical behaviour of the involved variables but fail to replicate the observed wage rigidity. By contrast, we show that wage bargaining outcomes whose employment adjustments target the contract curve of two negotiating parties are also able to deliver a strong degree of wage stickiness.

Modelling cyclical variation in the cost pass-through: a regime-dependent approach

In this study a regime-dependent ARDL model is developed in order to investigate how labour costs feed through into prices conditional on the business cycle position. Its estimates enable inference on the cyclical behaviour of markups. The proposed methodology is applied to the Polish industrial sectors. The obtained estimates point to procyclicality as the prevailing pattern of markup adjustment. Thus, overall markups in the Polish industry seem to have a mitigating effect on business cycle fluctuations. The degree of procyclicality seems, however, to be positively correlated with the degree of the industry’s competitiveness.

Post-activation muscle potentiation and its relevance to cyclical behaviours

Muscle can experience post-activation potentiation (PAP), a temporary increase in force and rate of force development, when contractions are closely timed; therefore, cyclical behaviours are likely affected by PAP, as succeeding contraction cycles can lead to potentiation over several subsequent cycles. Here, we examined PAP during in situ cyclical contractions of the mallard lateral gastrocnemius (LG). Surface swimming, a cyclical behaviour, was mimicked with work-loops using in vivo LG length change and stimulation parameters. Tests were performed at mallards' preferred cycle frequency as well as at lower and higher frequencies. Like muscles from mammals, anurans and arthropods, the mallard LG exhibited PAP with increases in peak force, average force rate and net work. Staircase potentiation occurred over two or more work-loop cycles, resulting in gradual increases in PAP. The number of cycles needed to reach maximum work varied with cycle frequency, requiring more cycles at higher cycle frequencies. PAP occurred under in vivo -like stimulation parameters, suggesting a potentially important role of PAP in animal locomotion, especially in cyclical behaviours.

The Cyclical Behaviour of the Small-Cap Premium: A Regime-Switching Approach

While the average annual small-cap premia for the US and Canada are substantial over long horizons, there is considerable time variation of this premium within and across these countries. For the US, during expansions, the average annualized premium is a sizable 5.44%, while during recessions, there is a small-cap discount of 6.23%. The differentials are less pronounced in Canada. This paper investigates the hypothesis that the variation of the small-cap premium is related to macroeconomic and financial variables that can be captured by a nonlinear time series econometric model, i.e., the smooth transition autoregressive model (STAR model), with different factor sets across regimes between and countries. The regimes reflect expansionary vs. contractionary phases of the business cycle. For the Canadian small-cap premium, an augmented factor model that includes US factors dominates a purely domestic factor model, which is consistent with integrated markets.