Keith H. Johnson

Mergers and Shareholder Returns: The Roles of Acquiring Firm's Ownership and Diversification Strategy

Earlier work has examined executive control and merger activity and suggested that mergers are sometimes undertaken in the best interests of managers rather than stockholders. This study has examined the relationships among firm control (owner versus manager), merger strategy (related versus unrelated) and returns to stockholders. The results suggest that both firm control and merger strategy affect merger performance. Therefore, an assessment of the control of the acquiringfirms should temper the interpretation of any research comparing the performance of related versus unrelated diversification strategies.

Portfolio maintenance strategies revisited

ConclusionsThe results indicate that there appears to be no substantial differences between the buy-and-hold and the fixed proportion strategies regardless of whether an equal allocation scheme or a quadratic programming allocation scheme is employed. Also, when comparing the equal allocation scheme with the quadratic programming allocation scheme on either a buy-and-hold or fixed proportion maintenance strategy, no obvious differences persist.However, the primary focus of this paper was to gain insight into theex post performance of the quadratic programming variable proportions strategy. This latter strategy appears to be far superior to the others — providing greater returns with somewhat less variability. Thus this strategy may provide portfolio managers the where-withal to improve portfolio performance. Future research using other time periods and other samples of securities is necessary to adequately generalize these preliminary results.

A Note on Estimating Expenditure Elasticities in Metropolitan Areas

Several attempts have been made to explain the causes of variations in retail sales between geographic areas. The factors manipulated in such studies have included the explanatory variables, the size of the geographic unit under analysis, and the type of measure employed. The present study presents a method that reduces the likelihood of biased elasticity estimates and therefore facilitates the explanation of the causes of retial sales variation.