Chemometric Technique to Determine Rice Types

Chemometric Technique to Determine rice TypesCHAPTER 1INTRODUCTION1.1Background of paperRice (Oryza Sativa) is a type of cereal food in which most people consumes. As acereal grain, it is the most widely consumed staple food for a banging helping of the worlds human population, especi whollyy in Asia 1. Rice is perhaps the most remarkable of cultivated crops, for although possessing the roots of a dry land plant, it flourishes in swamps or under irrigation, and in Asia has produced one or more crop annually for centuries (Grist, 1965). Commercially available sieve is distributed in different varieties in the market.Classification of harvest-feast brands and type of products is a very active atomic number 18a for the application of chemometric classification procedures 2. The use of specific sensors for characterizing foodstuffs or in this case rice is being replaced by a trend to draw on the wealth of information available from the data provided by current analytical instrument ation. The extraction of useful information from an nitty-gritty of data and the optimum use of this analytical information be important objectives of chemometrics 3.Since the infrared spectra contain significant information about all the components of a intricate mixture, FTIR is a very powerful and general technique for investigating the structure of rice components. In association with chemometric treatments such as principal component psychoanalysis (PCA), vibrational spectroscopy allows classification of foods (rice) to be undertaken without any chemical analysis 2. The principal(prenominal) advantage is that no prior information on the sample is required since the significant information is extracted during statistical treatment. The spectral information will constitute the experimental data which are analysed by PCA and HCA.1.2Problem StatementResearch on rice till this date mostly focused on its genome in order to increase the nutritional values. An example of product that has made it through this mannikin of research is Golden Rice. There is very little research on focusing in determination of types of rice using combination of spectroscopy and chemometrics technique let alone combination of infrared emission Spectroscopy and chemometrics. Due to this, little is known about which or what variables is responsible in the types of rice baseing when variety recognition is applied. Hence, this research is important in identifying what variable is responsible for the grouping of samples.1.3Research ObjectiveThe aim of this study is to apply chemometric technique to determine the types of rice that will be analyze through Infrared Spectroscopy in order to assess the potential relationship between the element content and types of rice.1.4meaning of StudyThis study is important to determine the variables that responsible in differentiation and variety types of rice. With the combination of Infrared Spectroscopy spectra of the samples prior to grouping of samples using embodiment recognition, this is a quick rule to classify rice compared to the use of nuclear magnetic resonance (NMR) spectroscopy with condition recognition or other instruments.1.5 mise en scene of the ResearchIn this research, type of rice to be samples is based on definition of rices type in Malaysia by Padi Beras Nasional Berhad 4. There are 7 samples to be test which all of them are to acquire at local stores. Analysis of the sample will be done through Fourier render Infrared Spectroscopy (FTIR) and pattern recognition which include Principal Component Analysis (PCA) and Cluster analysis.CHAPTER 2LITERATURE REVIEW2.1Rice in scoreHumankind progression in term of social and cultural was partly due(p) to the discovery of agriculture. This development gave a massive impact on the carriage human been living their life by choosing to settle down in one place instead of constantly moving around looking for places with unused food sources. Archeological evid ence founds all over Asia proposed that rice must be at least eight thousand years old, thus eliminating hypothesis that rice was among the first cereal to be cultivated due to general believed that agriculture first started around the Mesopotamian region in the valley between Euphrates and Tigris 5. oneness of these is related to the extraordinary concentration of rice production in a small part of the world. Approximately 90% or more of the worlds rice is produced in the relatively tiny area in south, southeast and northeast Asia which often be refer to as rice country 6. Rice is produced in a wide range of locations and under a variety of climatic conditions, from the wettest areas in the world to the driest deserts. It is produced along Myanmars Arakan Coast, where the growing season records an amount of more than 5100mm of rainfall, and at Al Hasa Oasis in Saudi Arabia 5.Rice plays a major role economically, especially in countries where rice is considered as the main food. T his is more accurate in most countries in Asia, because not only they consume rice daily, but also Asia is the main producer of rice 1. state like China, India and Thailand have long played major role in the development of rice, economically. The success of the crops not only important to the grower, but also coin the community either directly or indirectly 1.2.2Types of RiceThere are dozens of different ways to classify the scores of types of rice from all over the world, but rice is generally described as being long-, medium- or short-grained 5. These are some of the most common types youll find in supermarkets andgourmet stores, as well as a few specialty rices that were seeing more and more often. In the world market as well as in Malaysia, much emphasis is placed on grain length and whiteness as a criterion of grade and quality. Other factors such as palatability characteristics (appearance, cohesiveness, tenderness and flavor) also constitute as important considerations in quality grading 4.In Malaysia, the main varieties of rice found in retail outlets are ordinary local and imported white rice, brown unpolished rice and specialty rice such as fragrant rice, Basmati, parboiled and glutinous rice. The main criteria in the classification are length of grain, content of head rice, content of broken rice and milling degree 7.2.3Fourier Transform Infrared Spectroscopy (FTIR)Fourier Transform Infrared Spectroscopy (FTIR) provides specific information about chemical bonding and molecular structure, making it useful for analyzing organic materials and certain inorganic material. It can be use to quantitative some components of an unknown mixture. It can be applied to the analysis of solids, eloquent and gasses. The term FTIR spectroscopy refers to a fairly recent development in the manner in which the data is collected and converted from an interference pattern to a spectrum 8.When the material under investigation is put into an FTIR spectrometer, it will absorb the beam of light emitted and the successful absorption will display the uniqueness or fingerprint of the material under investigation 9.Samples for FTIR can be prepared in eight-fold ways depending on its physical state. For solid samples, it will be ground into a fine powder with an agate mortar and pestle with an amount of the suspending salt, which usually be KBr due to it being transparent to infrared radiation. This powder is then compressed through a bench top hydraulic press into becoming a thin pellet which can be analyzed 10. Another method to prepare solid samples is by dissolving it in a suitable resolving such as methylene chloride and the solution is dropped onto a salt plate. After the solvent evaporates, a thin-solid film of the compound remains on the plate 11. Meanwhile, liquid samples can be examined directly as a thin film between two sodium chloride plates.2.4ChemometricsThe term chemometrics was coined in the 1970s and is defined as the chemical disci pline that uses statistical and mathematical methods for selecting and optimizing analytical and preparative methods, as well as procedures for the analysis and interpretation of data 12.2.4.1Pattern RecognitionThe boilersuit goal of pattern recognition is classification. Developing a classifier from spectral, chromatographic, or compositional data may be desirable for any number of purposes including source identification, movement or absence of disease in a patient or animal from which the sample has been taken, and food quality testing to name just a few 13. The classification step is often accomplished using one of several techniques that are now fairly well established including PCA, HCA, KNN, statistical and regularized discriminant analysis.Techniques of pattern recognition are applicable to data drawn from virtually any physical process. The data may be qualitative, quantitative, or both which is they may be numerical, pictorial, textural, linguistic, or any combination the reof. Meanwhile, one of the most important and oft-used data analysis methods is the eyeball technique, Subjective assessment of data patterns has long been a method accepted by many traditional data analyzers. Statistical analysis proceeds slowly by hand, more rapidly with hand calculators and can be quite fast with modern computers 14.CHAPTER 3RESEARCH METHODOLOGY3.1SamplesA total of 7 different samples of rice will be use for this study. wholly of the samples will be obtain from various supermarkets and grocery stores in Johor Bahru and Seremban area. Various brands and types of rice are selected in order to get as much pas seul as possible.3.2Analysis of SampleSpectra of the rice samples will be acquired using (model number) instrument with KBr disc. The wavelength is set up to range from 4000cm-1 to 400cm-1.3.3SoftwareChemometrics analysis is the main part in this research as the data obtained from spectroscopic analysis will be analyses so that the important data can be iden tified and practicable information can be deduced from the data. The key to chemometrics is to understand how to perform meaningful calculations on data. In most cases these calculations are too complex to do by hand or using a calculator, so it is necessary to use some software. Three softwares will be use for the data analysis as listed in table below.3.4ProceduresCHAPTER 4RESULT4.1Expected ResultIt is expected that Principal Component Analysis (PCA) will reveal multiple grouping due to different types of rice being used as samples. Furthermore, by comparing the score plot with the loading plot, the unknown variable that causing the samples to be group as it is will be identify.REFERENCESCalpe, C. (2006). Rice International commodity profile.Rome Food and Agricultural Organization of the United Nations.Brereton, R. (2009). Introduction. InChemometrics for pattern recognition(pp. 1-24). Chichester, U.K. Wiley.Brereton, R. (2002). Intro. InAn introduction to chemometrics Data analy sis for the lab and chemical plant(pp. 1-12). New York Wiley.RICE TYPES IN MALAYSIA. (2011). Retrieved October 16, 2014, from http//www.bernas.com.my/index.php/rice-types-in-malaysiaBhattacharya, K. (2011). An Introduction to rice Its Qualities and Mysteries. InRice Quality a Guide To Rice Properties And Analysis.(pp. 1-18). Burlington Elsevier Science.Wong, L. C., Emrus, S. A., Bashir, B. M., Tey, J. Y. (2010, June). Malaysian Padi Rice Industry Applications of Supply scope Management Approach. In National Rice Conference Swiss Garden Golf Resort Lumut(pp. 28-30).Grist D. H. (1986). Tropical Agricultural Series. Rice, 6, 3-12, Longman Group Limited.Introduction to Infrared Spectroscopy. (2011) rudiments of Fourier Transform Infrared Spectroscopy, Second Edition (pp. 1-17) CRC Press.King, PL, Ramsey, MS, McMillan, PF, Swayze, G. (2004). Laboratory Fourier transform infrared spectroscopy methods for geologic samples. Infrared Spectroscopy in Geochemistry, Exploration Geochemist ry and Remote Sensing, Mineralogical association of Canada, Short Course, 57-91.Hauser, Martin, Oelichmann, Joachim. (1988). A critical comparison of solid sample preparation techniques in infrared spectroscopy. Microchimica Acta, 94(1-6), 39-43.Stuart, Barbara. (2000). Infrared Spectroscopy Kirk-Othmer Encyclopedia of Chemical Technology lav Wiley Sons, Inc.Beebe, k.R, Pell, R.J., Seasholtz, M.B. (1998). Chemometrics A Practical Guide. New York. John Wiley Sons, Inc. 61-65.Lavine, B., Workman, J. (2010). Chemometrics.Analytical chemistry,82(12), 4699-4711.Theodiridis, S., Koutroumbas, K. (2006). Pattern Recognition, Third Edition. Amsterdam, Boston. Academic Press. 1.

Theories of Merger and Takeover Waves

Theories of coalition and Takeover flapsMerger WaveThe American economy experienced ii commodious coup detat p differents in the postwar stage, commencement ceremony in the sixties and the second in the 1980s. twain thrives had a deep affect on the anatomical structure of corporate America. The main trend in the 60s was variegation and conglomeration. In contrast the 1980s takeover converse the previous process and brought US corporations back to specialization. In this respects, the utter to a greater extent or slight(a) thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the dickens takeover waves.1.1 The sixties Conglomerate Merger WaveThe amalgamation wave of the mid-sixties was the major since the turn of the century (Stigler, 1968). A typical characteristic of the mid-sixties transaction was a friendly achievement, frequently for pullulate, of a smaller snobby or public trustworthy which was asideside the getting firms main line of blood line. During this period uncor cogitate variegation was widespread among the gargantuan companies. Rumelt (1974) has inform that the fraction of single championship companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. make headway, the portion of conglomerates with no rife businesses change magnitude to 18.7% from 7.3%. at that place was likewise a considerable consort to diversification among companies that retained their core business. The driving force behind the sixties wave was extravagantly valuations of company carrys and salient corporate cash f crusheds. However the commission was unwilling to pay out the high cash flows as dividends, and on the former(a) get hold of able to issue equity at cute equipment casualty in that locationfore, turned their attention to l wages (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve cor porate wealth.thither ar two situates of arguments utilise to explain why companies diversify. The offset set deals that firms diversify to change magnitude stressholder wealth. A make sense of authors gather in discussed different aspects of diversification that can potentially raise partingholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external upper-case letter markets. finished diversification, managers create inherent dandy markets, which are slight given over to asymmetric training problems. Le tumefyen (1971), argues that conglomerates can carry on high levels of debt since corporate diversification inhibits earnings variability. if conglomerate firms are to a greater extent valuable than companies direct in a single industry If the evaluateation shields of debt outgrowth. Shleifer and Vishny (1992), state that conglomerates may put on a higher debt capacity since they can sell assets in those industries that su ffer the least(prenominal) from liquidity problems in bad states of the world. Finally, Teece (1980) argues that diversification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems among shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to nourish the prize of their human capital letter. However, Jensen (1986) suggests that companies diversify to profit the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in former(a) industries. Thus, diversifying will make skills more indispensable to the firm.1.2 The 1980s Merger WaveForm a longer historical perspective, Golbe and White (1988) presented judgment of conviction series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their conclusions do suggested that takeover activity supra 2 to 3 percent of GDP is unusual. However, the greatest level of optical fusion activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high.The size of the clean repoint in the 1980s had change magnitude extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and umteen transactions, particularly the large ones, were hostile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing spic-and-span stock or using solely cash on hand. a nonher(prenominal) firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by up-to-the-minute forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other f irms. (Bhagat, Shleifer, and Vishny, 1990 Kaplan, 1997).2 Merger MotivesThe following sections will explain the author behind the two nuclear fusion reaction waves.2.1 Managerial MotivesAgency guess predicts that unless(prenominal) managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) provoke provided proof that unless well monitored by large block shareholders managers will attempt to reduce their hirement risk through diversification. Lane et al.(1998) in this case baffle reexamined Amihud and Lev findings about agency theory employ a example of 309 US firms that modify between 1962 1970, from the Federal Trade Commission (FTC) Statistical draw on Mergers and Acquisitions (1976). This issue falls in the third broad category1 of agency studies. However this compendium save examines the strategic ways of managers when they are not under besieging and are also not in a situation, in which t heir interests are cl proterozoic in conflict with those of shareholders. Specifically, firms without large block shareholders are anticipate to convey in more uncorrelated acquisitions and show higher levels of diversification than firms with large block shareholders (Jensen and Meckling (1976))Using Multiple Regression, the study found no evidence for the shopworn agency theory predictions that focus control conduct firms are linked with strategically overthrow levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists r each(prenominal) prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced set about by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such(prenominal) conflicts dominate the day-to-day trouble is not realistic.Matsusaka,(1993) takes a deep look at the amazingly high pre-merger return rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial theatre as a takeover motive.The summary uses an extensive entropy set of 806 manufacturing sector acquisitions that took mooring in 1968, 1971 and 1974. The render was collected from New York Stock Exchange list statements. experiment of 609 observations was interpreted from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late mid-sixties and beforehand(predicate) 1970s, it was safely assumed that the archetype mergers were not motivated to increase market fount ain Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability2 throughout the study was measured as a rate of return on assets.The theory identified two basic characteristics of mergers motivated to discipline target anxiety. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate identity card of directors. In this situation a takeover was necessary to tack a change as the diffused stock ownership resulted in free-rider problems. Owners can change bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership.The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size configurationes and industries. thus, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly fat as private targets. It was also found that the largest public targets had the lowest profit rates. A likely interpretation of the evidence is that managerial discipline may buzz off been significant for vindicatory a small set of acquisitions that involved large publicly-traded targets. Matsusaka (1993) leaves the bigger pass unexplained. Why acquireers m and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are more often than not favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, a n asset complementarity theory implies that firms tend to rifle their low-profit divisionsPalmer and Barber (2001) ca-ca determined the factors that led large firms to move in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional milieus, and from multidimensional societal class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. corporal elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms prime directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on accessible sta tus3 have been tested empirically. first off, Firms excrete by twinge managers who attended an liquid ecstasy secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms lay out by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s.The study selected a sample of the largest 461 publicly traded U.S. industrial corporations from the Federal Trade Commissions Statistical root word on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression mod els.The findings of the study are reproducible with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the demeanor of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in reversion directions. Corporations that were run by chief executives who were central in social networks unless marginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), onen ess must never underestimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the pass of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates virtually when in the hands of the CEO or other top managers, as opposed to outsiders, However it was found the reverse to be the case. Overall, there was very gnomish support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensi ty to complete diversifying acquisitions during the 1960s.The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a digit of definitions that drove managers to diversify during the conglomerate merger wave.There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered freshly lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and because of strict antitrust antagonist to flat and vertical mergers they had to expand by buying into unrelated industries.The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the ha rbor of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth.One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or switch their bad managers ie Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had low profits, and on the other hand managerial-synergy targets were likely to have had high profits.Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high value-earnings ratio (P/E). 4 Therefore the bidder management was bootstra pping, by buying firms with low P/Es.Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression.The announcement-period return to the bidders shareholders was measured through dollar return, 5 .Regression of the dollar-return measure found that the return to a diversification acquisition was importantly positive. On average their shareholders enjoyed an $11.0 one thousand thousand value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification hurt shareholders and is thus in reconciled with the idea that diversification was control by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions a nd diversification is rejected, suggesting that there was a market premium to diversification.Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-synergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were flavour for good partners Matsusaka(1993).Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if i t meet the following criteria. Firstly It was reported in the Wall route Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category.The main finding is that buyers earned significantly positive announcement-period returns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by conglomerate building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions.Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which high-minded EPS in this way.The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded.Hubbard, Palia (1999), have examined the likelihood that sexual capital markets were create to alleviate the breeding costs associated with the less well-developed external capital markets of the time that is, whether they were expecte d to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially free control firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing search has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Accordingly, the internal capital market hypothesis for all acquisitions is tested.The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an in crease combined earnings-per-share.In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because it assists the manager to internally allocate capital across divisions of a modify firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well developed at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid.The authors se lected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the case date. Four measures of supernormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual theatrical role returns or the cumulative abnormal returns from five old age in front to five days after the event date. Secondly the parcel returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983) Matsusaka(1993)). Lastly , the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio6 is used as a proxy for a firms capital market opportunities.The evidence from these measures is mixed. Positive abnormal returns for all quartette measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s.More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operati onal information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets.The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable7 was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to spring up value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm.The Motives discussed in the above mentioned articles are appealing further evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder change magnitude on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The diversity between the two returns is quite significant. Thus it appears that investors fully believed that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleife r, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do.2.2 Legal MotivesMatsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the get together Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal res trictions on horizontal growth similar to those in the Unites States.The US Clayton antimonopoly act as was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to snare the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implications. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were marvelous to have been blocked, regardless of size. Firms diversified in 1960s, sin ce antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms spread out horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a powerfully adverse effect on horizontal mergers by large companies.The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small buyers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis diversification should have been widespread in the beginn ing in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement.Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations8 experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis.Scholes and Wolfson (1990) state, that the changes in U.S. levy laws9 in the 1980s had obvious affect on the desirableness of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors10. appraise laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger the propensity to step up the tax basis of assets for depreciation purposes to their fair market value the relish to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States.The authors selected the yearly values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source for nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 i ncreased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a some regulatory events that depressed such transactions. Firstly, the Williams Amendments had enlarged the cost and difficulty of effecting tender offers. Secondly the event of Accounting Principles Board Opinions 16 and 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more res trained. Therefore there was a sudden decline in merger activity from the peak in 1968. congeneric to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86.The antitrust proposition mentioned above is appealing as one of the most important reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the make of these mergers oTheories of Merger and Takeover WavesTheories of Merger and Take over WavesMerger WaveThe American economy experienced two great takeover waves in the postwar period, first in the 1960s and the second in the 1980s. Both waves had a deep affect on the structure of corporate America. The main trend in the 60s was diversification and conglomeration. In contrast the 1980s takeover reversed the previous process and brought US corporations back to specialization. In this respects, the last thirty years were a roundtrip for corporate America. This paper is an overview of the salient features of the two takeover waves.1.1 The 1960s Conglomerate Merger WaveThe merger wave of the 1960s was the major since the turn of the century (Stigler, 1968). A typical characteristic of the 1960s transaction was a friendly acquisition, frequently for stock, of a smaller private or public firm which was outside the acquiring firms main line of business. During this period unrelated diversification was widespread among the large companies. Rumelt (1974) has reported that the fraction of single business companies in the Fortune 500 decreased from 22.8% in 1959 to 14.8% in 1969. Further, the portion of conglomerates with no dominant businesses increased to 18.7% from 7.3%. There was also a considerable move to diversification among companies that retained their core business. The driving force behind the 1960s wave was high valuations of company stocks and large corporate cash flows. However the management was unwilling to pay out the high cash flows as dividends, and on the other hand able to issue equity at attractive terms therefore, turned their attention to acquisitions (Donaldsoni. 1984).Dividends were considered as a complete waste, and acquisitions as a very attractive way to conserve corporate wealth.There are two sets of arguments used to explain why companies diversify. The first set argues that firms diversify to increase shareholder wealth. A number of authors have discussed different aspects of diversification that can potentially raise shareholder wealth. Williamson (1970), suggest that firms diversify to beat imperfections in external capital markets. Through diversification, managers create internal capital markets, which are less prone to asymmetric information problems. Lewellen (1971), argues that conglomerates can carry on higher levels of debt since corporate diversification reduces earnings variability. if conglomerate firms are more valuable than companies operating in a single industry If the tax shields of debt increase. Shleifer and Vishny (1992), state that conglomerates may have a higher debt capacity since they can sell assets in those industries that suffer the least from liquidity problems in bad states of the world. Finally, Teece (1980) argues that diversification leads to economics of scale. The second set of arguments states diversification as a product of the agency problems between shareholder and managers. Amihud and Lev (1981) argue that managers follow a diversification strategy to protec t the value of their human capital. However, Jensen (1986) suggests that companies diversify to increase the private benefits of managers. Similarly, Shleifer and Vishny (1989) suggest that managers diversify because they are better at managing assets in other industries. Thus, diversifying will make skills more indispensable to the firm.1.2 The 1980s Merger WaveForm a longer historical perspective, Golbe and White (1988) presented time series evidence of U.S. takeover activity from the late 1800s to the mid-1980s. Their findings have suggested that takeover activity above 2 to 3 percent of GDP is unusual. However, the greatest level of merger activity occurred around 1980s, at roughly 10 percent of GNP. By this measure, takeover activity in the 1980s is historically high.The size of the average target in the 1980s had increased extremely from the modest level of the 60s. By 1989 28%, of Fortune 500 companies were acquired and many transactions, particularly the large ones, were hos tile. Further the medium of exchange in takeovers was cash rather than stock, they were characterized by heavy use of leverage. Firms were purchased by other firms by leveraged takeovers by borrowing rather than by issuing new stock or using solely cash on hand. Other firms restructured themselves, borrowing to repurchase their own shares. The 80s was also characterized by latest forms of control changes, which included bustup takeovers. Bustup takeovers involved the sell off of a substantial fraction of the targets assets to other firms. (Bhagat, Shleifer, and Vishny, 1990 Kaplan, 1997).2 Merger MotivesThe following sections will explain the motive behind the two merger waves.2.1 Managerial MotivesAgency theory predicts that unless managers are strictly monitored by large block of shareholders they will certainly act out of self-interest. Amihud and Lev (1981) have provided proof that unless closely monitored by large block shareholders managers will attempt to reduce their employm ent risk through diversification. Lane et al.(1998) in this study have reexamined Amihud and Lev findings about agency theory Using a sample of 309 US firms that diversified between 1962 1970, from the Federal Trade Commission (FTC) Statistical Report on Mergers and Acquisitions (1976). This study falls in the third broad category1 of agency studies. However this analysis only examines the strategic behaviors of managers when they are not under siege and are also not in a situation, in which their interests are clearly in conflict with those of shareholders. Specifically, firms without large block shareholders are expected to engage in more unrelated acquisitions and show higher levels of diversification than firms with large block shareholders (Jensen and Meckling (1976))Using Multiple Regression, the study found no evidence for the standard agency theory predictions that management controlled firms are linked with strategically lower levels of diversification and lower levels of returns than are firms with large block shareholders. It was found that Ownership structure and diversification are largely independent constructs. Thus, managers may be are worthy of more trust and autonomy than what the agency theorists have prearranged for them. Rather than seeking to restrict managerial discretion through extreme oversight, a more balanced approach by principals is needed. Some safeguards are essential as conflicts of interests between managers and shareholders do arise in certain situations, therefore, the assumption that such conflicts dominate the day-to-day management is not realistic.Matsusaka,(1993) takes a deep look at the astonishingly high pre-merger profit rates of target companies during the conglomerate merger wave. The main goal of the study is to assess how important was managerial discipline as a takeover motive.The analysis uses an extensive data set of 806 manufacturing sector acquisitions that took place in 1968, 1971 and 1974. The sample was c ollected from New York Stock Exchange listing statements. Sample of 609 observations was taken from 1968, 117 from 1971, and 129 from 1974. The results did not differ in any vital way by year, so observations from the three periods were pooled. Because antitrust enforcement was strict in the late 1960s and early 1970s, it was safely assumed that the sample mergers were not motivated to increase market power Ravenscraft and Scherer (1987). This allowed the investigation to focus on a narrow set of merger motives. Profitability2 throughout the study was measured as a rate of return on assets.The theory identified two basic characteristics of mergers motivated to discipline target management. First it wsa observed that the target was underperforming its industry and the only reason to discipline the managers was that they were not maximizing profit. It could be because of incompetence that they were pursuing their own objectives. The second, the target company had publicly traded stock and the only posibility to discipline management was by electing an appropriate board of directors. In this situation a takeover was necessary to effect a change as the diffused stock ownership resulted in free-rider problems. Owners can remove bad managers of privately owned firms, as they are closely held. The problem occurs in large publicly traded firms with diffuse ownership.The statistical results revealed that both public and private targets had extremely high profit rates prior to acquisition compared to their size classes and industries. Therefore, takeovers were not motivated to discipline target managers during the conglomerate merger wave. The second finding of the study is that public targets were not as particularly profitable as private targets. It was also found that the largest public targets had the lowest profit rates. A credible interpretation of the evidence is that managerial discipline may have been significant for just a small set of acquisitions that involv ed large publicly-traded targets. Matsusaka (1993) leaves the bigger question unexplained. Why buyers time and again sought high profit targets during the merger wave. There is a simple clarification, that high quality assets are generally favored to low quality assets, as high quality assets are more expensive. In addition to explaining why firms seek high-profit targets, an asset complementarity theory implies that firms tend to divest their low-profit divisionsPalmer and Barber (2001) have determined the factors that led large firms to participate in the1960s wave. The theoretical approach, of the study conceptualizes corporate elites (managers and directors) as actors. However it is assumed that these actors have interests which have arisen from positions held in organizational and institutional environments, and from multidimensional social class structure. Often Acquisitions are deviant and innovative ways by which corporate these elites can increase their status and wealth. C orporate elite diversify to the extent that their place in the class structure provides them with the capacity and interest to augment their wealth and status in this way. The authors have examined how the firms top directors and managers class position influenced its tendency to employ diversification in the 1 960s. More specifically the following arguments on social status3 have been tested empirically. Firstly, Firms run by top managers who attended an exclusive secondary school or whose family was listed in a metropolitan social register were less likely than other firms to complete diversifying acquisitions in the 1960s. Secondly, Firms run by top managers who were Jewish were more likely than other firms to complete diversifying acquisitions in the 1 960s. Thirdly, Firms run by top managers situated in the South or west were more likely than other firms to complete diversifying acquisitions in the 1960s.The study selected a sample of the largest 461 publicly traded U.S. indus trial corporations from the Federal Trade Commissions Statistical Report on Mergers and Acquisitions (1976), between January 1, 1963, and December 31, 1968. This particular time period was chosen because as the merger wave took off at the end of 1962 and crested in 1968. The results of the study were found through count and binary regression models.The findings of the study are consistent with that of Zeitlin (1974). According to him top managers capacities and interests are shaped by their social class position. Corporate elite members differ in their social class position. It is this variation that influences the behavior of the firms they command. The results indicate that social club memberships and upper-class background influenced a firms propensity to complete diversifying acquisitions in the 1960s. Network embeddedness and status influenced acquisition likelihood in opposite directions. Corporations that were run by chief executives who were central in social networks but ma rginal with respect to status were more likely than other firms to complete diversifying acquisitions in the 1960s. Therefore, individuals with high status had small interest in adopting innovation. Corporate elites can inhibit the spread of an innovation when it threatens their interests. As observed by Hayes and Taussig (1967), One must never underestimate the moral suasion that the business and financial communities can bring to bear on those who engage in practices of which they disapprove. In this respect, the analysis provides additional evidence that intraclass conflict shaped corporate behavior during the 1960s merger wave. It seemed that in the 1960s, it was not concentrated ownership but, ownership in the hands of capitalist families that reduced a firms tendency to complete diversifying acquisitions. Further, as predicted by agency theory , concentrated ownership would lower acquisition rates most when in the hands of the CEO or other top managers, as opposed to outsiders , However it was found the reverse to be the case. Overall, there was very little support for any of the agency theory in the 1960s merger wave. Further, the results provided no support for several of the class-theory hypotheses. Firms headquartered in the South or West run or by Jewish CEOs did not have a greater propensity to complete diversifying acquisitions during the 1960s.The process of diversification of American firms reached its height during the merger wave of the late 1960s. Matsusaka(1993)evaluated the 1960s merger wave. In an attempt to do so the author has proposed a number of explanations that drove managers to diversify during the conglomerate merger wave.There are reasons to suspect that managers may have pursued a diversification strategy even when it impaired the shareholder. They may have entered new lines of business to protect their organization-specific human capital or establish themselves. On the other hand, they may have been pursuing size as an end and be cause of strict antitrust opposition to horizontal and vertical mergers they had to expand by buying into unrelated industries.The study has evaluated whether manager were diversifying for their own advantage or in the interest of shareholders returns .To do so the author inspected the effect of diversification on the value of his firms equity. Thus, if the value of a firm declined upon announcement of an acquisition, then its management was not acting to maximize shareholder wealth.One explanation for conglomeration stated in the study, stems from Managerial-Discipline theory. Firstly, Firms were taken over to discipline or replace their bad managers ie Managerial-Discipline. Secondly, Managerial Synergy theory states that the bidder management wanted to work with target management, not replace it. In this case the acquirer management believed that the target management would complement to their skills. Therefore firm that had Managerial-discipline problem were likely to have had l ow profits, and on the other hand managerial-synergy targets were likely to have had high profits.Another explanation is that buyers were motivated by earnings-per- share (EPS) manipulation. This explanation states that conglomerates have a high price-earnings ratio (P/E). 4 Therefore the bidder management was bootstrapping, by buying firms with low P/Es.Construction of the dataset began with a list of mergers from the sample of 1968, 1971 and 1974 .The sample was identified from the takeovers from New York Stock Exchange listing statements and the results were presented through regression.The announcement-period return to the bidders shareholders was measured through dollar return, 5 .Regression of the dollar-return measure found that the return to a diversification acquisition was significantly positive. On average their shareholders enjoyed an $11.0 million value increase in value when bidders made a diversification acquisition,. This rejects the hypothesis that diversification h urt shareholders and is thus inconsistent with the idea that diversification was driven by managerial objectives. On the other hand, bidders who made related acquisitions cost their shareholders $6.4 million on average. Thus, the hypothesis that the markets reaction was the same to related acquisitions and diversification is rejected, suggesting that there was a market premium to diversification.Using descriptive statistical summaries it was found that both diversifying and horizontal buyers preferred to buy firms that were profitable. For both type of acquisitions the average operating profit was more than 5% in excess of the targets industry average. Therefore fame of high-profit targets argues against the importance of a managerial-discipline motive for both types of acquisition and in favor of a managerial-synergy motive. This is because Managerial-discipline takeovers should have been directed at low-profit firms, whose profitability needed improved. The motive was Managerial-s ynergy as the targets were takeovers were high- profit firms, this is because synergy-motivated managers were looking for good partners Matsusaka(1993).Another factor linked to the managerial theories is whether or not the targets management was retained.Top management is said to have been retained if it meet the following criteria. Firstly It was reported in the Wall Street Journal that the acquired firms management would continue to operate under the new management. Secondly, it was indicated in the buyers listing statement that the targets management would be retained. Lastly, when the merger took place at least one of the top three executives of the target firm was still managing the firm three years later from when the merger took place. According to the above mentioned definitions, 61.8% of the managers in the sample were retained and only 3.5% of the acquisitions fell in the Replaced category.The main finding is that buyers earned significantly positive announcement-period re turns during the conglomerate merger wave when they made diversifying acquisitions. The hypothesis that conglomerates were driven by empire building or some other managerial objective can be rejected because such explanations imply value decreases to unrelated acquisitions.Another explanation of the conglomerate merger wave is that mergers were driven by an accounting trick rather than expected efficiencies. Therefore, investors watched EPS when the EPS went up they bid up the price of the stock. According to this argument, Conglomerates, tended to buy companies with lower P/E ratios than their own in order to increase their EPS and boost their stock prices. There was no evidence that firms earned positive returns which inflated EPS in this way.The study indicated that early conglomerators earned significantly positive returns simply because they were first. They may have gained some rents to organizational innovation. Possibly the men who built the first conglomerates had a unique talent for diversification, which the market rewarded.Hubbard, Palia (1999), have examined the likelihood that internal capital markets were formed to alleviate the information costs associated with the less well-developed external capital markets of the time that is, whether they were expected to create value by the external capital markets in the 1960s.In this paper, the authors have inspected a form of cross-subsidization that occurs when a financially unconstrained bidding firm takes over a financially constrained target firm and as a result forms an internal capital market.The study examined whether the external capital markets expected that the formation of internal capital markets in the 1960s were value-maximizing for the bidding firm. However, existing research has argued that internal capital markets can be value-enhancing. As argued by Geneen(1997), the financing and budgeting expertise that a firm possesses is not necessarily related to its degree of diversification. Ac cordingly, the internal capital market hypothesis for all acquisitions is tested.The study also tests the bootstrapping explanation for conglomeration in the 1960s, which takes place when firms with a high price-earnings ratio (P/E) took over low P/E target firms and fooled the stock market with an increased combined earnings-per-share.In the 1960s, external capital markets were less developed in terms of company-specific information production than in later years. The authors have classified company-specific information into two general categories. Firstly, production information and secondly, financing and budgeting expertise. However, in this study information-intensive activities were introduced. This was because it assists the manager to internally allocate capital across divisions of a diversified firm. It was suggested that diversified firms were perceived by the external capital markets to have an informational advantage, because external capital markets were less well devel oped at that time. Comparing it to the current decade, there was less access by the public to computers, data- bases, analyst reports, and other sources of company-specific information. Not only this there was less large institutional money managers and the market for risky debt was illiquid.The authors selected a sample of 392 acquisitions that occurred during the period from 1961 through 1970. Diversifying acquisitions were defined as those in which the bidder and target do not share any two- digit SIC code Matsusaka(1993), and related acquisitions as those in which they do share a two-digit SIC code. Further the Wall Street Journal was used for announcement date as the event date. Four measures of abnormal returns to the conglomerate bidding firm were calculated. These measures are as follows. Firstly, the usual percentage returns or the cumulative abnormal returns from five days before to five days after the event date. Secondly the percentage returns until date of last revision or the cumulative abnormal returns from five days before to five days after the date of the last revision (Lang et al. (1991)). Thirdly, the dollar returns or the percentage return times the market value of the bidder six days before the announcement (Malatesta(1983) Matsusaka(1993)). Lastly, the investment return defined as the change in the value of the bidder divided by the purchase price (Morck et al. (1990)). Tobins r ratio6 is used as a proxy for a firms capital market opportunities.The evidence from these measures is mixed. Positive abnormal returns for all four measures were shown for related acquisitions. On the other hand, two of the four measures had shown statically significant positive abnormal returns for diversifying acquisitions in. Not only that diversifying acquisitions do not significantly earn less than related acquisitions in two of the four measures. Thus, evidence suggests, the capital markets believed acquisitions to be generally good for bidder shareholders during the 1960s.More significantly, it was found that when financially unconstrained buyers acquired constrained target firms, highest bidder returns were earned. Further, bidders generally retain target management, signifying that management may have provided company- specific operational information and the bidder on his part also provided capital budgeting expertise. Therefore, external capital markets expected information benefits from the formation of the internal capital markets.The study found no evidence in support of the bootstrapping hypothesis, as the coefficient on the dummy variable7 was not statistically different from zero. This result is consistent with Matsusaka, (1993), who also finds no evidence for bootstrapping.Therefore, firms merged to form their own internal capital markets as there was a deficiency of well-developed external capital markets in the 1960s. Some firms apparently had an information advantage over the external capital markets and were expected to produce value in an internal capital market. In the 1960s diversified acquisitions were rewarded by financial markets, the informational advantage that acquiring firms appeared to possess was likely to be in the capital budgeting, allocation process and operational aspects of each division. Bidder firms generally retained the target management as it would facilitate them running the operational part of each target firm.The Motives discussed in the above mentioned articles are appealing however evidence from the stock market suggests that shareholders preferred their firms to diversify. Using a data set from the 60s and early 70s, Matsusaka (1993) reported that, when the company announced an unrelated acquisition, the stock price of the bidder increased on average of $8 million. However, on the announcement of a related acquisition, the bidding firms stock price fell by $4 million. The difference between the two returns is quite significant. Thus it appears that investors fully be lieved that unrelated acquisitions benefited their firms relative to the alternatives. Thus the managers just did what the stock market told them to do that is to diversify. Evidence from 1980s stock market suggested that shareholders, again, liked what was happening. Shleifer, and Vishny (1992) found that in the 1980s, stock prices of the bidding firms rose when they bought other firms in the same industry, and fell with unrelated diversification. It is clear that the market disapproved unrelated diversification. Therefore it does not astonish that, in light of such market reception, managers stopped diversifying and did what the stock market directed them to do.2.2 Legal MotivesMatsusaka (1996) investigated whether the antitrust enforcement of the 1960s led firms to take on the diversification goal, by preventing them from expanding within their own core industries. If correct, diversification should have occurred more less frequently when small firms merged than when large firms merged since small mergers were less likely to have attracted antitrust attention. Further the author examined the diversification patterns in the United Kingdom, Canada, Germany, and France in the late 1960s and early 1970s, where none of these countries had legal restrictions on horizontal growth similar to those in the Unites States.The US Clayton Antitrust Act was the antitrust legislation in the postwar period (1950 Celler-Kefauver amendment to Section 7). The act, prohibited mergers that would substantially lessen competition, or tend to create a monopoly. This new law was used by the antitrust authorities and the courts to limit the number of mergers between vertically related and firms in the same lines of business. The strictness of the antitrust environment in 1968 is illustrated by the observation that in the earlier 12 years, all antitrust cases that reached the Supreme Court had been resolved in support of the government. The study indicates the following two implicatio ns. Firstly, large horizontal mergers were more liable to have been challenged on antitrust grounds than small horizontal mergers. Secondly mergers between unrelated firms were unlikely to have been blocked, regardless of size. Firms diversified in 1960s, since antitrust authorities prevented them from expanding in their home industries. Later when antitrust policy became less rigid in the 1980s, firms expanded horizontally, leading them to refocus on their core business. Stigler (1966) was perhaps the first to present evidence on the antitrust hypothesis, concluding that, the 1950 Merger Act has had a strongly adverse effect on horizontal mergers by large companies.The author selected a sample of 549 mergers (that took place in 1968) from the New York Stock Exchange. Results of the study were reported through Logit regressions .It was found that bidders were as likely to have entered new industries when they made small acquisitions as when they made large acquisitions, and small bu yers were as likely to have diversified as large buyers. Further the total number of diversification acquisitions concerning small companies was high.Though, according to the antitrust hypothesis diversification should have been widespread primarily in large mergers where same industry acquisitions were prohibited by tough antitrust enforcement.Secondly assembled international evidence indicated that diversification took place in many industrialized nations in the 1960s and 1970s, although restrictions against horizontal combinations were unique to the United States. Yet, most other industrialized Western nations8 experienced diversification merger waves and general movements toward diversification in their largest companies (Chandler (1991)).Thus most of the evidence, is not consistent with the antitrust hypothesis, signifying that other explanations for corporate diversification should be emphasized not the anti trust hypothesis.Scholes and Wolfson (1990) state, that the changes i n U.S. tax laws9 in the 1980s had obvious affect on the desirability of mergers and acquisitions. However such transactions were not only motivated by tax factors but also non tax factors10. Tax laws can have number of affects on mergers and acquisitions , which can include the following capital losses, presence of tax-attribute carry forwards such as net operating losses , investment tax credits, and foreign tax credits, among others, that might be cashed in more quickly and more fully by way of a merger the desire to step up the tax basis of assets for depreciation purposes to their fair market value the desire to sell assets to permit a change in the depreciation schedule to one that is more highly accelerated. The authors in this study have examined the effect of changes in tax laws passed in 1980s on merger and acquisition activity in the United States.The authors selected the annual values of mergers and acquisitions from 1968 through 1987 in nominal dollars. The data source f or nominal values was W. T. Grimm and Company for 1968-85 and Mergers Acquisitions (1987-88, rev. quarterly) for 1986 and 1987. Using time series analysis it was found that the dollar volume of merger activity between 1980-1981 increased from $44.35 billion to $82.62 billion (86%) in nominal terms. The percentage increase was approximately twice as large as the next largest percentage increase in annual merger and acquisition activity over the 1970-86 periods. There was spectacular increase in merger activity that began with the passage of the Economic Recovery Tax Act of 1981, however this was not the only merger wave that occurred in that time frame. Unusual merger activity was also witnessed in the 1960s. The termination of 1960s wave was accompanied by quite a few regulatory events that depressed such transactions. Firstly, the Williams Amendments had enlarged the cost and difficulty of effecting tender offers. Secondly the issuance of Accounting Principles Board Opinions 16 an d 17, forced many acquiring firms to boost depreciation expense, goodwill amortization and cost of goods sold. Thirdly the Tax Reform Act of 1969, made transferability of tax attributes (net-operating-loss carry forwards) more restrained. Therefore there was a sudden decline in merger activity from the peak in 1968. Relative to the tax benefits when the non tax benefits of the transaction were small, current management were the most efficient purchasers, as they had an advantage along the hidden information dimension. Therefore 1981 act had increased the incidence of cases in which non tax benefits were less than the common tax benefits of mergers and acquisitions. As a result, there was an increase in the number of transactions involving management buyouts. The annual dollar value of unit management buyouts between 1978-80 increased by a factor of 3, and by a factor in excess of 20 for the period 1981-86.The antitrust proposition mentioned above is appealing as one of the most impo rtant reason for diversification, during the 60s and 70s, which simply disallowed mergers of firms in the same industry, regardless of the effects of these mergers o

Synthesis of a Potential Enzyme Inhibitor

Synthesis of a Potential Enzyme InhibitorDelaram Salehi out-of-the-way(prenominal)dAimSynthesis and characterisation of Benzocaine.IntroductionThe Fischer esterification of 4-amino benzoic harsh is catalysed by an window pane is fully reversible.Method3g of 4-aminobenzoic acid was weighed out and placed into a dry 100cm3 round crapper flask (ensuring no residues atomic recite 18 left inside the joint).20 cm3 of methylated spirits was measured out and added to the 4-aminobenzoic acid in the round bottom flask.3 cm3 of concentrated Sulfuric acid was measured out and added to the round bottom flask mixture (ensuring no residues are left on the joint), a condenser was fit onto the round bottom flask and the mixture was gently swirled.Using a heating mantle, the mixture was heated and upon boiling refluxed for 30 minutes.At the end of reflux, the heat source was remote and the mixture was allowed to cool to room temperature.Upon cooling, the mixture was gently stirred using a glass stirring rod and Sodium hydroxide solution (20%) was tardily added to the mixture until a neutral pH was attained.The mixture was allowed to stand for 5 minutes before the contents were poured into a beaker containing approximately 70 cm3 of ice, the reaction watercrafts was rinsed with distilled piss and the washings were transferred into the beaker to reach an approximate volume of 150cm3.The crop was filtered using a Buchner funnel (washed with some cold water) ensuring that the moisture is completely sucked out.The product was then transferred onto a overtake glass and dried in an oven at a temperature no greater than 60oC. The dry mass was then noted and the product submitted for analysis.Steps1-10 were repeated using Isopropyl alcoholic drink instead of Methylated spirits and the melting point for the product was attained.Mechanism of actionStep one portrays the protonation of the nose candyyl oxygen on 4-aminobenzoic acid where the sulfuric acid acts as the H+ donor (t he regeneration of this proton would establish the Sulphuric acid as a catalyst). This proton transfer results in a delocalisation of positive stir which bedevils rise to the presence of the three resonance structures portrayed in step 1- resonance. Of these three structures, the spunk structure (where the positive charge is localised onto the cytosine atom) allows for the esterification to proceed as its partial positive charge allows Nucleophilic attack by the Oxygen atom on Methanol as seen in step two. next this nucleophilic attack, a protonation and de-protonation occurs (which has a net effect of proton transfer) thus leading to the formation of a water molecule on the carbon atom which cleaves off in the hydrolysis in step 3. This hydrolysis results in a delocalisation of positive charge which gives rise to the presence of the three resonance structures portrayed in step 4- resonance. Of these structures, the middle structure where the positive charge is localised onto t he carbon atom allows for a de-protonation to occur as the Hydrogen atom donates its electrons to the positive carbon thus neutralising the carbon and forming a double bond. This de-protonation also results in the regeneration of the Sulphuric acid proton which protonated the reactant in step 1 thus establishingResultsWeek one division contributeMass of reactant 3gMass of product obtained 2.38gRMM reactant 137RMM product 165Reactant/product moles 0.022Theoretical yield= 3.62g% Yield = (Actual yield / theoretical yield) * 100 = 65.75%Week two percentage yieldMass of reactant 3gMass of product obtained 2.79gRMM reactant 137RMM product 179Reactant/product moles 0.022Theoretical yield= 3.92% Yield = (Actual yield / theoretical yield) * 100 = 71.18%Melting point observational product 1MP 85.9-88.4oCLiterature product 1MP 88-90oCExperimental product 2 MP 83.5-84.1oCLiterature product 2 MP 84oCH NMR4-amino benzoic acidBenzocaine13CNMR4-amino benzoic acidBenzocaineDEPT-1354-amino benzoic acidBenzocaineAnalysisThe melting points for both products were average reading from three attempts and are fair within the literature range. This can be attributed to accurate measurements, clean utensils (thus avoiding impurities) and sufficient drying.At roughly 66% and 71% the percentage yields for products one and two severally are reasonably low. This may be due to a number of problems such as, incomplete transfer of reactant into the reaction vessel, not transferring all of the reaction vessel washings for filtering, incorrect filtering technique where some product was allowed to pass through instead of being retained e.g. filtering too fast or incomplete transfer of the product from the filter paper after filtration.With reference to the HNMR tables, I have deduced corresponding H atom based on integration, splitting and chemical channelize. The chemical shift of an atom depends on the extent of protect it has, for sheath a H atom attached to an Oxygen (e.g. H atom numb er 6 on 4-amino benzoic acid) has less screen due to the Oxygen atoms electronegativity whereas a H atom attached to a C atom has more shielding as carbon is not electronegative and in the case of H atoms number 2 and 3, they are also surrounded by other atoms which give them some shielding. I found locating H atoms 2 and 3 particularly tricky as their quintet splitting pattern and integration of 3 where very misleading however their chemical shift reaffirmed their identity as it is relatively to the left thus indicating a fair amount of shielding.With reference to the 13CNMR tables I was able to deduce the corresponding Carbon atoms based on two properties, chemical shift and peak height. The chemical shift (in accordance to the level of shielding/position of the C atoms) allowed me to locate peaks for carbonyl carbons (Carbon number 7 in both reactant and product) and more shielded carbon aand the height/integration of the peaks which corresponds to the number heat content atoms attached to the C atom in question.With reference to the DEPT-135 tables I was able to distinguish the difference between the C atoms in accordance with the different number of H attached to each C atom. This technique portrays CH and CH3 atoms as positively phased and CH2 atoms negatively phased. For atoms with the same phasing, I used the chemical shift ( as with 13 CNMR ) to distinguish between the C atoms in question.In this esterification, the product was maintained in a pH of 7-8. This was done in order to prevent a nucleophilic attack from hydroxide ions which would hydrolyse the product which and reverse the esterification thus converting the product back into the reactant.Rf values can be used to deduce the signboard of a molecule, where a low Rf value can indicate a wintry molecule. This is based on how the molecule interacts with the mobile and stationary phases. For example a low Rf value is a result of the molecule interacting with the polar stationary phase/silica a nd not travelling very far up the plate allowing us to deduce that its polar. Based on this theory and the fact that polarity increases with RMM a larger molecule would be more polar and thus have a lower Rf. I would therefore predict that Isopropyl 4-Aminobenzoate would have a lower Rf value than Benzocaine due to its larger RMM making it more polar than Benzocaine.ReferencesUNCP. (2014). CNMR spectroscopy. Available http//www2.uncp.edu/home/mcclurem/courses/chm550/nmr_lec4.pdf. move accessed 06/03/2014.Chemspider. (2014).4-Aminobenzoic acid.Available http//www.chemspider.com/953. Last accessed 06/03/2014.Chemspider. (2014).benzocaine.Available http//www.chemspider.com/Chemical-Structure.13854242.html?rid=752b9fda-5ccb-49f3-bf93-47ceb79356b4. Last accessed 06/03/2014.Jim Clark. (2002).THE MECHANISM FOR THE ACID CATALYSED HYDROLYSIS OF ESTERS.Available http//www.chemguide.co.uk/physical/catalysis/hydrolyse.htmltop. Last accessed 06/03/2014.Chemspider. (2014).4 aminobenzoic acid.Av ailable http//www.chemspider.com/953. Last accessed 06/03/2014.Chemspider. (2014).Isopropyl 4-Aminobenzoate.Available http//www.chemspider.com/Chemical-Structure.78903.html. Last accessed 07/03/2014.

Essay --

I am precise happy for writing you this letter and I will do my best to be as informative as I can. As it is said that the child is the mirror ofthe family, first I would like to tell you a little about my family. My family consists of four members Father, Mformer(a), Brother and me. Myfamily is really precious for me. We harmonize our life in honesty and peace always share our problems with each other for bestsolutions. My family is important for me and is the main meaning of my life, the reason for my heartbeats. My father is an engineer. Heis my best friend and a big part of my life. He is the head of our family, his advice and ruling is actually important in any(prenominal) decisions wetake. He never dominates or forces opinions on us. My mother is a teacher. She is a real beauty. She is sensitive, caring, feminine andgentle. With her everything is in apple-pie smart set at home and our lives. She is good at cooking, knitting, embroidering. My brother isfifteen and is in his tenth year at school. He is very strong, but meanwhile very gentle, handsome, and independent. Sometimes heopposes my attempts to help him in anything. He has a great drive for his ideas and interests.I am 18 and I am a sophomore at VSTTI, Foreign Languages Department majoring in French and English. My love for Englishappeared some years ago. I am also patient and love children very much that is why I have chosen the profession of the Englishteacher. I am a plump middle-sized girl with black long and curled hair, big brown eyes and a small nose. I have got plenty of hobbies reading, collecting photos of famous people, cooking, knitting, cultivating various plants, chatting with myforeign pen-friends via internet, learning languages and writing poems. I h... ...pplication System on 2/25/2014 246 PM. Page 9.share our interests not only within our room, but also outside use the help of each other, and we will become temporaryrepresentatives of our country for each other. And yes, I know that it might be difficult for me to live in a different country with a foreignroommate however I am sure you will be next to me if I need any help.With this letter I gave you small bit of information about myself but I will enlarge my letter describing myself later if I manage to beselected as a finalist. I like to leave presents or things that will remind others about me, so please accept this small poem that I wroteespecially for you For the man who is always around, I will prepare reliable ground. Even in the awful darkness of fear you will be tending(p) a hand, As there is someone who will whisper I am your friend

Huckleberry Finn by Mark Twain Essay -- civil war, blacks, freedom

Before the Civil War, slavery was what the people in the in the south considered the normal. It was all they knew. They had been taught that blacks where under the white people. The blacks didnt understand it, but to them it was a matter of life and death. They accepted it because they were scared of the consequences that followed. However, white people who helped the blacks were considered traitors. The blacks were stuck. They wanted freedom, but in the south it was almost impossible. If they ran and were caught they were killed and the people in the north were the only people who would help. Even the northerner had trouble helping a wide variety of blacks. Northerners tried, but they could never compass all that they wanted. One thing that was interesting was when southerners realized that blacks were human beings. Once they had this concept it was almost impossible to think of them as slaves or the workers. Slaver was a huge part of the south and once Huckleberry Finn was publi shed it showed some of the problems in the United States, including slavery. In Huckleberry Finn, by Mark Twain there are tether scenes that I would consider my favorites when Huck escapes from his dad, when King and Duke deceive a town and when Huck realized that Jim is a human being.In Huck Finn one of the move points in the book was when Huck faked his death and met Jim on the island. Huck is locked into a cabin and his father periodically beets the poor boy. Human beings buttocks be dread cruel to one another. His own dad beat him and chased him around the house trying to kill him. Eventually, Huck cant handle it anymore, and has a plan. He wont sit by and wait for his dad to kill him. The only way to prevent people from following him, Huck had to ... ...en we can learn to love them. Can you take the action and become similar to Huck Finn? Where is your heart?Works CitedBilyeu, Suzanne. Mark Twains Bad Boy. New York Times upfront 142 (2010) n. pag. Print. Discusses all that happened when the book was first released to the public.Hurt, Mathew. Twains Adventures of Huckleberry Finn. Explicator (2005) n. pag. Print. Discusses showed the character of Huck Finn.Michael, Green. With Humor. Cobblestone 32 (2011) 36. Print. Shows how Twain and how he can manipulate words.Newell, Kate. Authenticity in Adaptations of Adventures of Huckleberry Finn. Literature/ take Quarterly 41 (2013) 303. Print. It shows how the people can reject what they dont like.Wysocki, Barbara. The Adventures of Huckleberry Finn. School Library 48 (2002) 87. Print. Shows what people should and how they should act.

My Philosophy about Child Development Essay -- Education Children Deve

My Philosophy about Child DevelopmentWorks Cited Missing A childs emergence affects how they learn. All children dont fit the norms of study but not all children should be looked down on because of this. The development of the body and mind leads to the development of skills a child learns in life. Teachers need to help the child expand their skills and the knowledge to do the skills well. Virtually everything a young child does is affected if physical development is delayed (Charlesworth, 2000). Adults and teachers need to do everything possible to keep physical development from being delayed. Adults can provide children with opportunities to help them in development. By the age of 3 a childs brain is three quarters of its adult size. From infancy to the age of two development is very rapid (Santrock, 1996). For this reason it is essential for the child to be able to explore their world around them. By exploring children will increase their knowledge and underst anding of the world. A child must have physical development before motor development can occur (Charlesworth, 2000). According to Piaget infants acquire knowledge from their environment. Through sight, smell, hearing, and touch this is accomplished. Adults are responsible for seeing that the children have a chance to explore to acquire the knowledge. A child must be physically able to do the work that is required to keep up with the early(a) students. Many chil...

organizational behavior Essay -- essays research papers

I.The Meaning of Money in the WorkplaceA.Money and Employee Needs1.Money is an important factor in satisfying individual needs.2.Money is a symbol of status, which relates to the innate drive to acquire.3.Financial gain symbolizes personal accomplishments and relates to growth needs.4.People value notes as a source of feedback and a bureau of goal achievement.5.Compensation is one of the top three factors attracting individuals to work for an organization.B.Money Attitudes and Values1.Money tends to create strong emotions and attitudes, most of which are negative, such as anxiety, depression, anger, and helplessness.2.Money is associated with greed, avarice and occasionally, generosity.3.People with a strong coin ethic believe that money is not evil that it is a symbol of achievement, respect, and power and it should be budgeted conservatively.4.Cultural values seem to influence attitudes toward money and a money ethic.a.People with Confucian work values are more likely to caref ully budget their money but are also more likely to spend it.b.People in countries with a long-term orientation give money a high priority in their lives.c.Scandinavians, Australians, ad New Zealanders have a strong egalitarian value that discourages people from openly talking rough money or displaying their personal wealth.C.Money and Social Identity1.People tend to define themselves in terms of their ownership and management of money.2.Couples tend to get into polarized roles regarding their management and expenditure of money.3.Men are more likely than women to emphasize money in their self-concept. 4.Men are shown to be more confident managing their money and are more likely to use money as a tool to influence and impress other.II.Reward... ...urally occurring feedback at regular intervals. 3.Includes designing artificial feedback where indispensable feedback does not occur.E.Self-Reinforcement1.Includes the social learning theory concept of self-reinforcement.2.Occurs when ever an employee has control over a reinforcer but doesnt take the reinforcer until completing a self-set goal.3.Also occurs decide to do a more enjoyable task after completing a task that you dislike.F.Self-Leadership in Practice1.People with a high degree of conscientiousness and internal locus of control are more likely to apply self-leadership practices.2.Self-Leadership can be learned.3.Training programs have helped employees to reform their self-leadership skills.4.Organizations can encourage self-leadership by providing sufficient autonomy and establishing rewards that reinforce self-leadership behaviors.