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The purpose of this paper is to provide a comprehensive initial evaluation of divestiture gains for reacquired carve‐out parent and subsidiary second event and three‐year returns for the period 1980‐2010.

Using several variables, we contrast reacquired carve‐out parent and subsidiary second event returns with those for acquired carve‐outs. Similarly, we contrast carve‐out parent three‐year returns.

We observe several differences between reacquired (RACO) and acquired (AQCO) carve‐outs. Indicating less competition for RACO prices, RACOs have lower market capitalization on the day before reacquisition. Supporting a certification effect for Thermo Electron, parent three‐year post reacquisition returns are positive versus negative returns for other RACO parents. Our multiple regression variables explain 27.53 percent of the subsidiary reacquisition announcement returns of 11.63 percent and explain 19.84 percent of the variation of parent three‐year returns.

This study makes several contributions to the literature. It is the first study to contrast the long‐term results of reacquired carve‐outs and their parents with those of acquired carve‐outs and their parents. Also, Gleason et al.’s study of reacquired carve‐outs has been extended in several ways. First, parent company three‐year returns after the reacquisition was examined. Next, returns for reacquired carve‐outs were contrasted with acquired carve‐outs. Updating Allen's study, it is reported that, except for one subsidiary acquired by a third party, all subsidiaries were reacquired by Thermo Electron.

The purpose of this paper is to examine two different choices of corporate divestiture for US firms: selling off assets to public firms or issuing stocks in equity carve-outs. The authors identify industry-related, firm-specific, deal-related and market-timing factors that influence the choice between the two methods of divestiture.

The authors use the univariate tests, logistic regressions and buy-and-hold excess return computations to identify industry-related, firm-specific, deal-related and market-timing factors that influence the choice between the two methods of divestiture.

The results show that industry concentration, relative “hotness” of the equity carve-out market, market values of divested units and firm’s growth opportunities are all positively related to the probability of an equity carve-out selection. In contrast, firms in financial service industry, firms that divest smaller units and firms with higher asymmetric information mainly choose to divest assets through asset sell-offs. The findings also indicate that firms with higher leverage and/or higher cash flow constraint show a stronger likelihood for choosing either the equity carve-out option or asset sell-off with cash payment over asset sell-off with stock payment. In the long run, firms that sell-off their assets experienced better performance relative to firms that choose to carve-out.

The authors recognize several limitations of this study. First, the findings use the data collected in the US market. These findings may not be necessarily true to non-US firms. Therefore, one possible extension of this paper is to further examine the determinants that drive the methods of divestiture for non-US firms. Second, the authors have not examined the association between the choices of divestiture and the subsequent long-term operating performance of the firms. This could be another interesting direction for research in the future.

The findings have some implication for the divestiture literature by providing a set of determinants which play important roles on firms’ choice between an asset sell-off and an equity carve-out. The findings also have important implications for a potential acquirer who is interested in buying a firm’s subsidiary. Specifically, by analyzing the aforementioned influencing factors, the acquirer might foresee the possibility of a carve-out method and plan its bidding offer accordingly. From investors’ perspective, knowing which factors affect firms’ divesting methods and their subsequent long-run stock performance is undoubtedly beneficial to their investment strategies.

Prior research has attempted to address the reasons why firms divest or the outcomes of those actions. This paper focuses on the factors that influence the choice of sell-off versus carve-out once the decision to divest has been made. In addition, the authors look at a wide range of factors including industry-related, firm-specific, deal-related and market timing.

The purpose of this paper is to provide a comprehensive initial evaluation of the changing issuer objective and partial price adjustment hypotheses as applied to carve‐out parent initial and three‐year returns for the period 1988‐2006.

Using five primary variables: the percentage of the subsidiary retained by the parent, the ratio of offering size to parent market capitalization, filing range adjustments, the percentage of the offering used to retire subsidiary debt or to pay dividends, and the CBOE volatility index to predict initial and three‐year returns, the paper shows that ex ante variables can predict carve‐out parent initial and three‐year returns.

The paper shows that public information known prior to the offer date influences 7.52 percent of the variation in announcement, 5.57‐38.31 percent of the variation in ex‐date and 6 percent of the variation in three‐year market‐adjusted equity carve‐out parent returns.

This study makes several contributions to the literature. Although prior studies focus on ex post determinants of equity carve‐out returns, this study is the first to explore ex ante predictors of equity carve‐out parent returns. The implications of these results are that publicly available information known prior to the carve‐out offering date can influence market‐adjusted initial and three‐year parent carve‐out returns and can explain 6‐17 percent of the variation.

The purpose of this paper is to provide a comprehensive initial evaluation of the wealth transfer hypothesis as applied to the second‐stage events and announcements that follow carve‐outs during the period from 1983 to 2004.

Using daily security prices, such combinations are shown to have multi‐faceted wealth transfers and wealth creation.

In contrast with the wealth losses found in previous studies, wealth increases are observed for parent stockholders and bondholders in the spin‐off announcement and event phases for combination carve‐outs and spin‐offs. Also, the spin‐off is the most prevalent second divestiture choice for parents with traded debt.

This study makes several contributions to the literature. First, in contrast with recent wealth transfer studies that use monthly bond returns, daily stock and bond returns are used to examine the wealth effect for parent stockholders and bondholders during the announcement and ex‐dates of second‐stage events. Second, in contrast with previous studies that found a wealth transfer from bondholders to stockholders in the spin‐off phase, statistically significant wealth retention was observed for bondholders and for stockholders at spin‐off and other second event announcements. Third, the results reflect that increased collateral from the carve‐out phase lessens the potential for bondholder wealth loss in the spin‐off phase.

This chapter explores how primary care physicians deliver mental health treatment for Medicaid patients in one county in the United States, and how treatment may have changed after HMO enrollment with a mental health carve-out. We utilize Lipsky's theory of street-level bureaucracy to better understand how primary care physicians treat Medicaid patients for depression and what types of insurance arrangements support or inhibit that treatment. Exploratory interviews with 20 physicians revealed that the patient's status as a non-voluntary client, service system barriers and physicians’ commitment to treatment caused them to bear primary responsibility for the majority of depression care. Physicians were willing to act as advocates for their clients and viewed such advocacy as ethical given the lack of mental health parity. In general, primary care physicians were not familiar with new policies dictating mental health carve-outs for Medicaid patients, nor were they concerned with how mental health care was reimbursed for their patients. However, they were willing to provide mental health care even if they were not reimbursed. Physicians rely upon medication management to treat depression, and reimbursement plays a role in the amount of time spent with patients and in the coding used for the visit. Lipsky's (1980) theory of street-level bureaucracy provides a useful framework for understanding how physicians will act as advocates for their clients in the face of structural as well as resource constraints on health care.

This paper aims to draw attention to an urgent need for reform of the regulatory framework of the broader export credit system to ensure a new and comprehensive “safe haven” for officially supported export credits. The purpose is to analyse the complex debate on disciplines of the World Trade Organization (WTO) and the Organisation for Economic Co-operation and Development (OECD), creating a point of reference for future analysis of and debates around the “carve-out clause” of the Agreement on Subsidies and Countervailing Measures (ASCM) and a “safe haven” in a broader sense.

This paper takes inspiration from legal, economic and political science literature on subsidies and officially supported export credits, as well as on legal documents related to the WTO and the OECD. It examines the WTO subsidy and the OECD export credits framework, focusing on main legal and economic governance aspects. Then, it gives a critical analysis how “safe” a “safe haven” in a broader sense might be, assessing frictions of and solutions for the fundamentally different set of disciplines, limitations, financial instruments not covered by OECD regulations, as well as new challenges related to climate finance.

After assessing the challenges regarding the “carve-out clause” of the WTO subsidy framework and two tracks aiming to create a new “safe haven”, requirements for comprehensive disciplines for officially supported export credits are pointed out. Furthermore, several misunderstandings and mistakes appearing in the debate are clarified.

Desktop research rather than empirical field work.

This paper creates awareness for governments and exporters how to deal with a complex system of interrelated disciplines. The question, how “safe” a “safe haven” in a broader sense can be, has not been resolved yet. Some authors focus on the WTO disciplines not taking into account the need for an effective matching procedure of the Arrangement on Officially Supported Export Credits (the Arrangement). Furthermore, the introduction of several new pre-export financing programmes and the growing significance of climate finance-related instruments for export credit agencies creates both opportunities and challenges. This paper can serve as a reference point for the academic debate and further research. This paper also offers newcomers to the topic a comprehensive overview.

Although the “carve-out clause” and the Arrangement have been much discussed, there is limited literature review structuring both existing and new aspects of the debate, assessing (dis)advantages of arguments and interpretations. This paper both adds to the corpus of literature about the ASCM, as well as the Arrangement, and takes this corpus as the object of its analysis.

This study investigates, both theoretically and empirically, the effects of joint ventures on traffic. Although alliances are a pre-condition for joint ventures, both cooperation agreements are different in their nature. The reason is that alliances are revenue-sharing agreements, whereas joint ventures also involve a cost-sharing commitment. Our empirical analysis focuses on the transatlantic market, including non-stop routings (interhub markets) and one-stopover routings (interline markets). Our theoretical and empirical findings emphasize the relevance of economies of traffic density and reveal a positive effect of joint ventures on traffic, both in interhub and interline markets.

“Valleys” make for interesting analogies. They are geological depressions that can reflect the struggles and lows sometimes experienced with equity and diversity work. Carved out by ancient glaciers, valleys lend themselves to critical comparisons to the glacial pace that frequently characterizes the change in higher education. But when tagged with the noun “hope,” glaciers represent the work of carving out new forms, shapes, avenues, and their amazing transformative power to change landscapes. The aspiration and desire for change, the wish for something better, and acting intelligently and intentionally on ambitious equity and diversity goals make “Valleys of Hope” an apt analogy of the higher education landscape that describes the University of Minnesota’s equity and diversity journey and successes. Carpe Diem, a Latin phrase frequently translated to mean “seize the day,” is in our chapter title because we felt it appropriately conveyed how two consecutive equity and diversity leaders harnessed the zeitgeist of campus strategic initiatives to rally their campus communities around equity and diversity imperatives. Carpe Diem sometimes connotes a focus on the present versus the future. Yet, in our view visions and initiatives anchored in core values have in fact a surprising omnipresence and permanence over time. We share two leadership “acts” with readers in this chapter.

While scholars discuss the theory of “Business Ethics,” students grapple with applying those theories to hypothetical case studies and business people struggle to live business ethics in practice. Many fail, casting large and ominous shadows. We are inundated with their stories. We need to hear more often stories of those who have succeeded and why their examples are important to the field of Business Ethics.

This chapter, after providing a brief overview of the differing uses of the term, Business Ethics, expands upon the metaphor of “ethical space” as the eye of a moral hurricane, provides diagrams illustrating the formation of ethical space in a business behavioral context, applies those diagrams to the examples of Andersen and Feuerstein as moral exemplars, discusses ways to mitigate the shadows that eclipsed their example, and suggests ways to enlarge corporate ethical space.

Ethics is a habit learned through mentoring and developed through practice. In a world of conflicting influences, we each carve out our own ethical space that can serve as an example to others as they face their own individual ethical challenges, but at the corporate level, a moral exemplar will inform the larger corporate ethical space only when the leadership of the corporation consciously adopts and constantly reinforces the example of its moral exemplar.

This chapter uses the visual metaphor of the eye of a hurricane to discuss the formation and importance of ethical space to moral exemplars in a world of conflicting influences and moral pressures.