TAKEOVERS: MANAGERIAL INCOMPETENCE OR MANAGERIAL SHIRKING?

Agency theory identifies managerial shirking as the cause for takeovers, while other explanations focus on low ability managers. This paper formalizes Jensen's free cash flow variant of agency theory by constructing a simple two-period game which captures the distinctive empirical implications of the two theories.
Using data for petroleum firms following the oil price shock of 1979-80, we find that firms undergoing financial restructuring exhibited higher values of Tobin's q. Additionally, evidence of management turnover and workforce cuts emphasizes that takeovers appear primarily designed to address agency concerns.     

THE USE OF COLLATERAL TO ENFORCE DEBT: PROFIT MAXIMIZATION

Collateral lowers the probability of default. This paper modifies the work of Benjamin (1978) by characterizing the competitive lender as a price-taking profit maximizer rather than a profit eliminator. Most of Benjamin's results disappear when profit maximization is assumed; the results are corrected and extended. It is also suggested that the value of the collateral required for a standard loan is a variable that the loan market will adjust until long-run expected profits from secured loans is driven to zero.     

Social Conservatism, New Republicans, and the 1980 Election

Using data from the 1980 National Election Study, we examinethe claims (1) that those voters who shifted to Ronald Reaganin 1980 ("New Republicans") were drawn disproportionately fromthe lower to middle strata of the population: (2) that theywere social conservatives motivated by issues like abortionand ERA: and (3) that they were more religious and alienatedfrom the federal government than average. Our results stronglysuggest that all of these assertions are false and thus questionthe emergence of a "neopopulist" or "Middle American Radical"political constituency on the right wing of American politics.Our findings also have implications for prominent theories aboutconservative political movements and about the changing natureof party politics in a postindustrial society.     

Social Work Students' Perceptions of Child Abuse: An International Comparison and Postmodern Interpretation of its Findings

Correspondence to R. James Christopherson, School of Social Studies, University of Nottingham NG7 2RD, UK. Summary The decision about whether behaviour with children is acceptablehas far-reaching consequences for those involved. Social workersmust decide what behaviour leads people into the child protectionsystem. This study aims to identify how far social work studentsachieve a consensus on the acceptability of behaviour, and whethersimilar items achieve agreement between groups in Sweden andEngland. Forty-four vignettes of behaviour with children whichmight be seen as unacceptable were administered to 52 first-yearsocial work students in Ume, Sweden, and 50 English students.They were asked to rank the behaviour on a 5-point scale, where‘1’ represented ‘Fine’ and ‘5’‘Totally unacceptable'. Key findings were that there is little consensus within societiesabout what is acceptable behaviour towards children, and significantdifferences between them. It is argued that this is the resultof the many different discourses operating in the field. Theauthor points out the difficulties this can cause, and arguesfor the acceptance of a postmodern approach, which though stressingthe importance of consensus in decision making, ultimately positsthat effective and ethical practice must be based on relationship.Such an approach would resolve paradoxes which have challengeda more modernist understanding of social work.