Alireza Tourani Rad

Long run behaviour of Pacific-Basin stock prices

In this paper, we investigate the long run relationship among five major Pacific-Basin stock markets. We focus on the common long run behaviour of their stock price indices over a sample period of 20 years. Using cointegration theory, we find that while there exists a rather integrated Pacific Basin financial area, the regional aspects (Asian versus Pacific) play important roles.

Convergence of corporate governance systems

Differentiates market (e.g. USA) from group‐based (e.g. Germany) corporate governance systems, traces their evolution and asks whether they are converging. Puts forward a theoretical convergence model based on the belief that agency problems can best be solved by specific corporate control mechanisms, recognizing that it would demand more changes from group‐based than from market systems. Examines current trends for both relating to institutional/regulatory environments, the market for corporate control and the focus on shareholder value creation/activism. Presents statistics from the USA, UK, Germany and France to show their trends towards the convergence model and discusses them in some detail. Concludes that they have all moved towards the model although in different ways and at different rates.

International acquisitions and shareholder wealth Evidence from the Netherlands

Abstract In this article, we test wealth effects of international acquisitions using a sample of foreign acquisitions by Dutch firms during the period 1990–96. We find weak evidence that cross-border acquisitions are wealth-creating corporate activities, especially for acquisitions in the U.S. We observe further that for the West European acquisitions, benefits from internalization are larger for companies having relatively less international exposure and making acquisitions outside of their main activities.

The long run performance of Malaysian initial public offerings (IPO): value and growth effects

Outlines previous research on the underpricing of initial public offerings (IPOs), describes the institutional framework for IPOs in Malaysia and presents a study of long run Malaysian IPO performance using 1992‐1996 data on 258 IPOs, classified into growth or value portfolios. Explains the methodology and presents the results, which show that value IPOs outperform growth IPOs, while both outperform the market. Finds their cumulative market adjusted return (averaged at 41.7 per cent) positively correlated with book‐to‐market equity, earnings‐to‐price, cashflows‐to‐price and the time lag between close of application and actual listing; and negatively related to the IPO price and size. Briefly considers consistency with other research and the market implications.

Risk adjusted performance measurement and capital allocation for trading desks within banks

Compares four risk‐adjusted performance measures and explains their importance, to banking in particular. Applies the risk‐adjusted return on capital (RAROC) measure to five product classes at several branches of an international bank for six months, finds considerable differences between required and actual RAROCs and investigates the reasons why. Discusses both exogeneous factors (e.g. trading terms). Believes that banks can improve their internal capital markets by using risk‐adjusted performance measurement.

Depositary receipts from the East Asian region

Notes rapid growth in the number of depositary receipt (DR) listings on US exchanges and presents a study of those from East Asia. Explains how they allow US investors to trade in the equity or debt of non‐US companies through US institutions and reviews the relevant literature. Classifies 605 East Asian DRs at March 2000 by country, year of issue, sponsorship status, exchange, depositary bank and industry; and discusses reasons for the differences found. Tests the relationship between exchange rates and the issuance of DRs and presents the results, which show that firms may be more likely to issue DRs when their home currency is strong relative to the US dollar, i.e. when they can obtain the best listing price in US markets.