Journal of Contemporary Issues in Business Research

ISSN 2305-8277
Table of Contents: Vol. 2, Issue No. 5, Sep. 2013 Table of Contents: Vol. 2, Issue No. 5, Sep. 2013

Research Articles

Synergies or Overpayment in European Corporate M&A

Author(s): Belén Díaz Díaz, Sergio Sanfilippo Azofra, and Carlos López Gutiérrez

Abstract: The purpose of this research is to test whether the price paid for corporate takeovers in Europe is related to the synergies expected or whether bidders are overpaying for acquisitions. We analyzed the relationship between the premium paid in 147 mergers and acquisitions, and the bidders’ abnormal returns around the date of the transaction from 1995 to 2004. A quadratic relationship between the premiums and returns was found. When the amount paid in a transaction does not exceed the value of the target organization by more than 39.69–40.03%, the premium becomes a sign of the future synergy and will have a positive effect on the bidders’ returns. However, when the premium exceeds these values, the relationship between premiums and returns become negative and therefore the market considers bidders are overpaying. This paper show the importance of the correct valuation of the targets and of the premiums paid to ensure value creation in M&A.

[Compelete Article-pdf]   [pp: 135-153]   Article first published online: July 2013

Employment Change and Competitiveness for the Mexican Regions: A Shift-Share Analysis

Author(s): Tonatiuh Najera Ruiz

Abstract: Regional competitiveness has had a major reconfiguration in the last 15 years in Mexico. This can be seen clearly in the employment creation. Those regions that were characterized by the best employment rates now seem to fall slightly behind. To test this, we used a shift-share analysis to decompose the change in employment in three effects: the national growth, the industry mix and the competitive component for the period 1999 to 2009. The results show that the states bordering the United States show the normalized employment growth slowing, while the two regions with the highest growth are located in the south of the country. It was identified, further, that for the former, the competitive component is the most influential in their poor performance.

[Compelete Article-pdf]   [pp: 154-163]   Article first published online: July 2013

Does Zambia Possess Comparative Advantage and Competiveness only in Copper and Cobalt?

Author(s): Macleans Mzumara

Abstract: The author investigated if Zambia has comparative advantage in only copper and cobalt. The results were that Zambia has Revealed Comparative Advantage (RCA) 1 in 216 product codes which include other products other than copper and cobalt related. Although Zambia has many products in which it has comparative advantage or is competitive, the economy relies heavily on copper and cobalt export earnings. The author has recommended diversification through promotion of other products other than copper and cobalt. A new export strategy is required and necessary. This will prevent significant negative impact in future if there is a fall of prices on the international commodity market.

[Compelete Article-pdf]   [pp: 164-169]   Article first published online: July 2013

Rostow’s Stages of Growth Model, “Urban Bias” and Sustainable Development in India

Author(s): Rita Yi Man Li and Ronald Hung

Abstract: The essence of sustainable development stresses the co-development of social, environment and economics. With the help from Rostow’s Stages of Growth Model, we try to figure out the stage where India is now currently in. As many of the previous studies show that there are serious pollution problems alongside economic development in developing countries. We firstly study the relationship between India’s economy and carbon dioxide emission by Granger Causality tests. We find that the development of India is not balanced, especially when we try to compare rural and urban areas. We finally propose that diversification in industries can strengthen sustainable development in India.

[Compelete Article-pdf]   [Appendix-pdf]   [pp: 170-188]   Article first published online: July 2013

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