Jonathan K. Kramer

Why Strikes Occur: Evidence from the Capital Markets

New and existing empirical evidence regarding the stock market reaction to strikes is used to test the validity of three strike theories. A review of the existing capital market evidence reveals the need for information regarding the intraindustry announcement effects of strikes against manufacturing firms. This need is filled by applying event-study methodology, in a manner consistent with earlier studies, to a sample of strikes during the period 1982-1999. This new evidence, combined with that of previous studies, consistently supports the validity of Hicks theory that strikes are the result of bargaining errors, misperceptions of bargaining goals, or discrepancies between the expectations of union leaders and the rank and file.

Random walks in the U.K. pound/ U.S. dollar exchange rates

Abstract Since the adoption of flexible exchange rates in the early 1970s, tests of foreign exchange rate efficiency have abounded and can be categorized into three main approaches. The first approach is to examine exchange rates in an arbitrage context to determine if they are out of parity with interest rates or other exchange rates. The second approach to efficiency testing concerns the ability of forward exchange rates to predict corresponding future spot rates. The third approach to exchange rate efficiency testing is to examine exchange rates as a time series to determine whether or not they follow a random walk. This paper follows the third approach to exchange rate efficiency testing. Efficiency testing of exchange rates under the null hypothesis of the random walk is a natural progression in the research of exchange rate determination. This paper shows that the random walk hypothesis is not rejected for the £/

Seasonal Variation in the Environmental Effects of Toll Collection. Evidence from the Garden State Parkway

annual real exchange rate. Although the £/

Financial Patterns of Government-Owned Manufacturing Firms in Taiwan

annual real exchange rate has mean reverting tendencies due to PPP, frequent and strong shocks to the nominal exchange rate assure that the series follows a random walk since these shocks directly influence real exchange rates. The random walk hypothesis is also not rejected for the £/

An Interindustry Analysis of Economic Value Added as a Proxy for Market Value Added

monthly nominal exchange rate, making profitable trading schemes between the currencies unlikely. Both conclusions are consistent in that a random walk in nominal exchange rates should lead to a random walk in real exchange rates.

The Economic Effect of Strikes on the Shareholders of Nonstruck Competitors

The toll collection process creates pollution beyond what would be produced by an automobile transiting at normal highway speeds. Research shows that electronic toll collection (ETC) produces less pollution than manual toll collection. However, many toll collection systems are subject to seasonal fluctuations in demand. As a result, the percentage of road users taking advantage of ETC changes throughout the year. Any decrease in the ETC participation rate will increase the amount of pollution created. This article quantifies the pollution effects of this seasonality. The authors use the Garden State Parkway (GSP) in New Jersey as a case study. Because of seasonal changes in ETC participation rates, they find that the quantity of pollution created by toll collection on the GSP increases significantly during the summer months. Unfortunately for the state of New Jersey, that is the time of year when it is historically in noncompliance with the Clean Air Act.

Cross-border mergers and acquisitions: maximizing the value of the firm

Empirically-based financial patterns, the long-term stability of these patterns, and the distribution properties of financial ratios have received a considerable amount of attention in recent years for both U.S. and U.K. firms. However, limited research exists concerning the financial patterns for government-owned firms in Taiwan. Moreover, the prior studies offered little evidence about the probability functions of the actual distributions of financial ratios. Using data from twelve government-owned manufacturing firms in Taiwan during the period 1978–1993, the financial patterns of six classifications are developed. The analysis identifies that these patterns are relatively stable over the empirical period even though the magnitude of many underlying ratios changed. The six major ratios identified are not normally distributed. The distributions are either J-shaped, regular, or skewed, which is consistent with prior studies. The probability functions developed in this study can help to refine the rating processes in performance evaluation. This study develops a generalized empirical model using financial ratios that can be utilized for evaluating the performance of government-owned firms in any industry.