838 4p

Readings:

· Investopedia, “The Basics of Mergers and Acquisitions”

· Klaus Gugler, Dennis C. Mueller, B. Burcin Yurtoglu, Christine Zulehner. 2003. “The effects of mergers: an international comparison.” International Journal of Industrial Organization 21 (2003) 625–653

· Michael Jensen. “Takeovers: Their Causes and Consequences.” 1988 Journal of Economic Perspectives, 21-48.

· Finance and Labor Perspectives on Risk, Inequality and Democracy, Sanford M. Jacoby. 30 Comparative Labor Law and Policy Journal 7, Fall 2008

· Income Dynamics, Economic Rents, and the Financialization of the U.S. Economy. Donald Tomaskovic-Devey and Ken-Hou Lin. American Sociological Review 2011 76: 538 originally published online 10 July 2011

· Rafael LaPorta, Florencio Lopez-de-Sileanes, and Andrei Shleifer, 1998, “Corporate Ownership Around the World,” NBER Working Paper 6625.

Assignment:

Upload to the Assignments Folder in Sakai your Answers to Sections A-D. Answers to question should typically be in one to two complete sentences but please provide more detail if context required or the question specifically asks for a more detailed analysis.

Note that the “See XX” references below direct you to particular readings for answering those questions, but you may use any other resource available (Internet resources, class notes) in your responses.

Section A

See Various Readings

1. Do shareholders need to be concerned about mergers and their consequences?

2. How has the financialization of the US economy impacted the average American?

3. Jacoby speculates that the labor movement in the US has been using pension fund capital to influence financial regulation and policy. Do you agree that this is the case?

4. Assuming Jacoby is correct, do you agree that corporate governance should be influenced by labor in this fashion and if so in what direction should labor drive the corporation?

5. Describe what is meant by synergies in the context of mergers and acquisitions. Do synergies justify a premium in valuation?

Section B

See Various Readings

1. Consider the Sarbanes-Oxley Act and the directives it placed on corporate governance for public companies.

a. Describe any 2 such directives included in this Act

b. Discuss whether these directives were successful in moving public companies towards a broader consideration of corporate governance as a means to enhance the interests of all stakeholders.

2. Consider the Glass-Steagall Act and its intentions coming as a result of the 2008 Financial Crisis. Has this Act been successful in accomplishing the intentions of its drafters?

3. Consider the current political climate and the general US Government sentiment (shared to various degrees by members of both parties) towards reducing current securities regulations on public companies. Do you support expanding or limiting regulations on public companies as a means of enforcing a broader stakeholder model of corporate governance? Why or why not?

Section C

Corporate Ownership Around the World LaPorta et al

1. Summarize one component of corporate governance practices from any 3 non-US countries (pick one from each of 3 separate countries) which would be beneficial to the interests of stakeholders if implemented in the US.

2. In what countries do financial institutions play a significant role in firm governance as shareholders?

3. How does poor shareholder protection lead to controlling shareholders, more concentrated ownership and narrower and smaller stock markets?

Section D

Research Paper Summary – 1-2 pages maximum (single or double spaced)

Decide on a subject you are interested in relating to corporate governance. This may encompass any topic that is related to any subject we have covered this semester. If you for example are interested in corporate governance in France, find an article on that, or women on corporate boards, etc. Then find a fairly recent (past 15 years preferably) serious research article from one of these academic sources noted below by searching for a paper that is of interest to you. Be sure you find the paper accessible enough to understand the problem the person was studying, how they reached their conclusion, and the conclusion.

Read the paper and

1. summarize the problem the researcher was studying,

2. discuss how they reached their conclusion and what the conclusion was,

3. explain what it means, and what you think about it,

4. recommend whether future sections of CG&FA should have this article assigned as required reading

Generally, any scholarly research article of appropriate length (generally at least 10 pages), published by a research or academic institution should work for these purposes. Some examples of research articles that would be appropriate for this assignment would be the articles that were ere assigned as readings for the class.

Please do not use any of these articles for your work on this assignment. However, feel free to use research articles which you may have been asked to read in other classes so long as they have a relevant link to any aspect of corporate governance.

As a very general guideline, if the research paper selected is under 10 pages long, it’s probably not going to work…

Here are possible sources for your research article – remember it must be serious research and a recent article, not newspaper or web media stories:

Note: Some institutions may have changed the location of their web sites, so you can search by the description to get to it. Sources 1 below is a great site to use for a simple search tool with free access to the articles through your Rutgers netID.

1. JSTOR in Articles and Databases in the electronic database section of the Rutgers Library under economics and finance and sociology and history;

NOTE THIS IS A GREAT SOURCE WITH AN EASILY SEARCHABLE DATABASE OF SCHOLARLY ARTICLES THAT WOULD SERVE FOR THIS ASSIGNMENT.

2. Social Science Research Network working papers (see www.ssrn.com );

3. National Bureau for Economic Research working papers ( www.nber.org search under working papers but you must be at a Rutgers computer to get free access to papers on Rutgers subscription);

4. Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University under Publications, Recorded and Past Vents, or News articles https://law.stanford.edu/publications/?page=1&tax_and_terms=205