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This article has been withdrawn as it was published elsewhere and accidentally duplicated. The original article can be seen here: 10.1108/eb013388. When citing the article, please cite: Michael Firth, (1976), “Share Price Behaviour”, Managerial Finance, Vol. 2 Iss: 3, pp. 294 - 318.

The purpose of this paper is to discuss briefly the types of research that have been undertaken, to reference a number of American and British studies and to summarise some work in this general area that has been completed by the author whilst at Bradford University and subsequently at Stirling University.

Over the past fifteen years there has been a lot of research into the behaviour of share prices. This has largely involved investigating whether share prices were predictable by mechanical means and whether any class of investors has had consistent and substantial success in investment matters. The main researchers involved in these studies have been (a)academics, who were interested in determining the efficiency of stockmarkets in socio‐economic terms and (b) practising investors and investment advisory firms, who sought to derive profitable investment strategies. Perhaps not surprisingly the published results of the two categories of researchers tended to clash with investors claiming success for their methods whilst the academics have in general refuted their claims. Greater reliance can be placed on the academic investigations however as apart from their disinterested positions and their generally superior research methodologies, they have tested all the publicised “profitable” investment strategies.

The annual value of equity stock exchange transactions and the annual value of mergers and acquisitions involve thousands of millions of pounds and thus considerable resources have been devoted to investment analysis, the discipline that sets out to value the worth of corporate enterprises. Probably the main requirement in investment analysis is the forecasting of company earnings, asset values and their growth rates. These forecasts are then used to determine the “correct” share price either by subjective means or by some equity valuation model.

Since the early 1960s there has been a considerable increase in formalised investment analysis in the UK. This can partly be evidenced by the growth in the membership of the Society of Investment Analysts, the major professional body for practising analysts, whose numbers have grown from 100 in 1955 to 590 in 1962 and to 1,600 in July 1973. Prior to 1960 there were very few full time analysts in the employment of brokers and investment institutions.

Activity‐Based Costing (ABC) is a relatively new accounting system that has received a substantial amount of publicity and is heavily marketed by consulting firms. In light of this, we surveyed companies in 1999 to evaluate the adoption of ABC in Hong Kong. We set out to investigate factors that might lead to its adoption and also surveyed whether companies are satisfied with the new system. Our findings reveal a low adoption rate of ABC. There is directional support for companies with diverse product lines and those facing intense competition using activity‐based costing. Companies that have adopted ABC report high satisfaction with the new system. Overall, activity‐based costing has made limited inroads in Hong Kong. The reasons for this are not readily apparent.

During recent years there has been a vast growth in the literature of and the study of the theory of the firm. Underlying the various different theories however is a generally acknowledged structure of a company having an objective(s) towards which it strives by laying down and implementing plans. Planning involves making decisions which will have their effects and outcomes in the future and so an estimate of this future is required. This assessment of the future is termed forecasting and it is a vital ingredient in any planning process.

In the mid‐1990s, China introduced the Modern Enterprise System (MES) to selected state‐owned enterprises (SOE). The paper aims to examine whether this reform led to improved efficiency and profitability.

The efficiency and performance of enterprises before and after the economic restructuring are examined. Univariate and multivariate (regression) analyses are used to investigate whether there has been a significant change in an enterprise's performance.

The paper finds there is no improvement in efficiency and profitability after the restructuring. This can be attributed the lack of improvement to the state's ownership of enterprises, bureaucratic management, and poor corporate governance. These things have to change in order to improve corporate efficiency and performance.

China's reform of SOEs is very important to the economic well‐being of the country. This paper is the first to investigate the MES as applied to wholly state‐owned enterprises.

The market for mergers and takeovers, often referred to as the market for corporate control [Manne (1965)], has always attracted the attention of investors and researchers because takeovers represent corporate investment decisions on a scale several times larger than the normal, ongoing, growth‐maintaining capital outlays by the typical value‐maximising firm. Although the theoretical justifications for such corporate actions are reasonably well understood, the true motives for the mergers and the strategies adopted by acquiring firms to consummate them can be complex and diverse in scope. Corporate acquisitions can therefore have widespread effects on the wealth of various groups of agents involved in the market for corporate control.

A unit trust is a vehicle by which a large number of investors can pool their varying amounts of money into one trust fund. In return they are issued with “units” in proportion to the fraction of the fund that they own. The fund is then invested, by the managers, on the Stock Exchange. Investors buy units from the managers at what is known as the offer price and can sell them back to the managers at what is known as the bid price. These purchases and sales can be made through direct contact with the managers or via an agent such as a bank, stockbroker, accountant or solicitor.