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The purpose of this paper is to address whether the past dividend policy of target firm impacts dividend policies following US mergers and acquisitions (M&A).

The authors use the catering theory as a theoretical approach to test dividend change after a merger-acquisition. For the empirical design, dividend policy is captured using dividend status, payout ratio and dividend yield, and specifications are estimated using Probit and OLS models.

The data indicate that dividend policy of the target affects dividend policy of the combined entity in cases of stock-based deals. This result provides support for catering theory, which maintains that managers of acquirers adjust dividend policies following transactions to cater to target shareholders’ preferences.

Although the tests suggest significant results using dividend status and payout ratio as measures of dividend, the authors do not find a similar effect for dividend yield.

Financial analysts evaluating merger-acquisition announcements may wish to predict the dividend policy following stock-based deals as they project the likely impact of past dividend policies of target firms. The results are also likely to be useful to investors.

The paper presents new evidence about dividend policy following M&A. To the authors’ knowledge, this is the first study that examines how an acquirer’s dividend policy is affected by an acquisition.

This paper examines the performance of nominal income targeting as a possible direction for monetary policy. The existing literature consists of historical counterfactual simulations to determine how economic performance might have differed if this policy had been adopted. To provide better assessment of the performance of nominal income targeting in practice, this paper focuses on Germany where this policy is implemented. The results highlight the importance of price stability in the design of German monetary policy. Furthermore, causality test results indicate a causal flow from money to nominal income. However, there is no evidence of a causal flow from nominal income to various definitions of money. These results confirm the Bundesbank’s claim that monetary growth runs ahead of fluctuations in nominal income in Germany. That is, the Bundesbank is able to target nominal income by using a monetary aggregate. These findings challenge the skepticism regarding the use of a monetary aggregate as the intermediate target, which has arisen mainly from the US experience.

The purpose of this paper is to explore whether India is a suitable candidate for an inflation targeting regime. It begins by placing India's monetary policy actions in a broader context by discussing whether the Reserve Bank of India (RBI) should shift from its current policy of heavily managed exchange rates to one involving greater currency flexibility. If the latter is chosen, the selection of inflation targeting would appear an appropriate one.

This paper has analytical, empirical and policy dimensions. Given the recent history of exchange rate centered policy in India, a discussion of the role of the exchange rate is needed. This is presented by the use of an analytical model where we examine how inflation targeting might work with the exchange rate. Then the decision rule from the model (a monetary policy rule (MPR)) is adapted for empirical testing and is estimated to investigate whether an MPR that follows inflation targeting can work for India.

There is some evidence to suggest that the RBI follows an MPR quite inadvertently. The MPR (interest rates) tends to react to current inflation, but there is no evidence that it reacts to forecasts of inflation. Additionally, interest rates do not react at all to the exchange rate.

The RBI's operating policy framework and whether it should adopt an inflation targeting arrangement is a highly topical issue that has attracted a great deal of attention in policy discussions in India. Very few papers broach this topic systematically and combine the analytical and empirical considerations.

The assignment of targets to instruments in developing countries cannot satisfactorily follow any simple universal rule. Which approach is appropriate is influenced by whether the economy is dominated by primary exports, by the importance of the domestic bond market and bank credit, by the extent of existing restriction in foreign exchange and financial markets, by the presence or absence of persistent high inflation, and by the existence or non‐existence of an active international market in the country's currency. Eighteen observations and maxims on stabilisation policy are tentatively drawn (pp. 64–8) from the material reviewed, and the maxims are partly summarised (pp. 69–71) in a schematic assignment, with variations, of targets to instruments.

The purpose of this paper is to analyze the influence of macroeconomic variables and economic policies on expectations and confidence of entrepreneurs. It provides an econometric analysis of the expectation transmission channel under inflation targeting in Brazil, emphasizing the effect of inflation targeting credibility on the business confidence of industrial entrepreneurs.

Based on ordinary least square (OLS), generalized method of moments (GMM) and vector autoregression (VAR), the paper provides empirical evidence about the influence of inflation targeting credibility and macroeconomic policies on expectations and confidence of entrepreneurs and, as a consequence, on industrial production.

The evidence for the Brazilian economy suggest that monetary and fiscal policies as well as the credibility of the monetary regime affect economic activity by their impact on expectations of entrepreneurs.

Development of macroeconomic stability is important to the expectations formed by entrepreneurs and, therefore, for industrial production. In particular, inflation targeting credibility stimulates industrial production, since it increases the confidence of entrepreneurs about the functioning of the economy and their businesses.

The results suggest new insights about the influence of economic policies on the real side of the economy, pointing out that the conduct of economic policies in emerging countries with inflation targets are likely to affect the expectations of entrepreneurs and therefore their production decisions.

Over the last decade there has been considerable debate about the merits of targets as a policy instrument. The purpose of this paper is to examine the implementation of two health targets that were cornerstones of New Zealand health policy between 2009 and 2012: immunisation rates for two-year-olds, and time to treatment, discharge or admission in hospital emergency departments.

For each policy target, the authors selected four case-study districts and conducted two waves of key-informant interviews (113 in total) with clinical and management staff involved in target implementation.

Despite almost identical levels of target achievement, the research reveals quite different mixes of positive and negative implementation consequences. The authors argue that the differences in implementation consequences are due to the characteristics of the performance measure; and the dynamics of the intra-organisational and inter-organisational implementation context.

The research is based on interviews with clinical and management staff involved in target implementation, and this approach does not address the issue of effort substitution.

While literature on health targets pays attention to the attributes of target measures, the paper suggests that policymakers considering the use of targets pay more attention to broader implementation contexts, including the possible impact of, and effects on related services, organisations and staff.

The research focuses specifically on implementation consequences, as distinct from target success and/or changes in clinical and health outcomes. The paper also adopts a comparative approach to the study of target implementation.

The article assembles efficiency and equity arguments for and against targeting the long‐term unemployed in active labour market policies (ALMP), and refers to evidence from applications to date. The theory and practices of ALMP differ somewhat between low and high unemployment countries. The approach taken in Sweden in the 1960s to 1980s is used to discuss low unemployment countries, and OECD analysis in the 1990s to represent theory for the high unemployment countries. Targeting the long‐term unemployed is specifically a policy for high unemployment countries, and depends particularly on effects on wage pressure. The article concludes by urging that equity arguments be considered as well as efficiency and by drawing attention to the form which targeting takes. Comments are made about Britain’s New Deal in relation to the form of targeting.

The purpose of this paper is to describe the need to theorize firms’ involvement in social issues and propose the social issues management model as a framework for analyzing the communication processes underlying social issues management. An application of the new approach is illustrated through a brief case analysis.

The paper is conceptual and emphasizes theory building for firm’s involvement in social issues management.

The paper describes modifications to the general issues management model that can be adopted to reflect the social issues management process and contemporary digital media environments.

The paper can benefit theory and practice of social issues management by describing how specific communication strategies and digital media use may affect social issues management.

Because firms increasingly are motivated or urged by stakeholders to take stands on social issues, understanding how they can perform the role of social issue manager can enhance their potential for contributing to positive social change.

The paper provides a much needed update to the models of issues management used in strategic communication. The new model accounts for the increasing pressure on firms to address social issues and the role of digital communication channels in that process.

The idea of this study is to provide a solid Financial Condition Index (FCI) that allows the monetary transmission policy to be monitored in a country which in recent decades has suffered from major financial and monetary crises.

The authors construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime. Using monthly data from 1995 to 2017, the authors estimate FCIs with two different methodologies and build the index by taking into account the mechanism of transmission of monetary policy and incorporating the most relevant financial variables.

This study’s results show that, likewise for developing countries as Mexico, an FCI could be a useful tool for managing monetary policy in reducing macroeconomic fluctuations.

Apart from building a predictor of possible financial stress, the authors construct an FCI for a central bank that pursues inflation targeting and to analyse the role of financial asset prices in formulating monetary policy.

1. We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.

2. The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).

3. FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.

4. FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.

We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.

The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).

FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.

FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.

The purpose of this paper is to examine the effectiveness of hedge fund activism (HFA) in preventing corporate policy deviations.

This paper identifies HFA interventions through a hand-collected sample of Schedule 13D filings between 1994 and 2016, and uses mechanical mutual fund fire sales as the instrument variable (IV) for the likelihood of such interventions. Armed with the instrument, this paper estimates firm's distribution, managerial compensation and investment policies in response to a change in the perceived likelihood of HFA interventions.

An increase in the HFA intervention likelihood leads to increases in shareholder distribution, decreases in CEO pay and investments and increases in operating performance. Compared to the sample average, a one standard deviation increase in the intervention likelihood leads to a 9.29% increase in the firm's payout ratio, a 7.42% decrease in CEO compensation, a 2.67% decrease in capital expenditures and a 4.96% decrease in R&D expenses. These changes are consistent with the threat of intervention curbing managerial empire-building behaviors and improving firm operation. The relationships are causal, significant and robust to a variety of alternative specifications and sample divisions.

Results of this paper suggest that as a mechanism for corporate governance, the threat of HFA is effective in preventing corporate policy deviations. They also demonstrate a stronger and broader impact of HFA on corporate policy than previously documented. By showing that HFA is an effective and viable mechanism for corporate governance, this study allows policymakers to make more informed decisions to whether increase hedge fund regulations or not.