Please select from the titles below:

• A Review of Research into Emerging Stock Markets
• The Trafalgar House Taveover Bid for Northern Electric: a Case Study in the Impact of Regulatory Intervention
• Choice of Organisational Form in Petrol Retailing: An Economic Analysis
• Independent Central Banks: Coordination Problems and Budget Deficits

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A Review of Research into Emerging Stock Markets (p.1)
By S G M Fifield, A A Lonie and D M Power

Emerging stock markets have been the subject of extensive scrutiny since their emergence as a separate investment category some twenty years ago. This review article explores the major debates which have taken place in the emerging stock market literature, including (1) the definition of what constitutes an emerging stock market, (2) the diversification benefits of incorporating equities from emerging markets into an investment portfolio, (3) the predictability of returns in emerging stock markets and (4) the character and volatility of emerging market equity returns. This review analyses the existing research into emerging markets and also indicates areas where future research might prove useful.

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The Trafalgar House Taveover Bid for Northern Electric:
a Case Study in the Impact of Regulatory Intervention (p.37)
By S Pallett

Trafalgar House's takeover bid for Northern Electric, the first for a privatised utility, was notable in retrospect for the regulatory intervention which it evoked, although it had not been xpected that regulatory intervention would play a major role in its outcome. This paper presents a case study of this takeover bid. Its principal focus is on the impact of regulatory intervention by the MMC and the Office of Electricity Regulation and it uses event study methodology to assess the impact of this on shareholders' returns.

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Choice of Organisational Form in Petrol Retailing: An Economic Analysis (p.51)
By G Cook

This paper is concerned with the reasons for vertical integration. It specifically addresses the questions of why vertical integration and close contractual equivalents have arisen in the petrol sector of the UK and what influences the particular pattern of integration and contracts found. The paper reports the results of a case study based on 17 semi-structured interviews. The main conclusions of the paper are as follows. The recent history of vertical integration is better accounted for by efficiency rationales. The explanation of the nature of contracts used emerges as being a mixture of agency factors and those emphasised by transaction cost economics. It is argued that the mix of contracts used is principally explained vy agency theory.

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Independent Central Banks: Coordination Problems and Budget Deficits (p.69)
By S Power and N Rowe

This paper develops a simple game-theoretic model to show how the independence of central banks can result in coordination problems with the fiscal authority and excessive budget deficits. In a Stackelberg equilibrium with the fiscal authority as leader, the budget deficit is optimal. In contrast, with the central bank as leader, the budget deficit is too high. While in a Nash equilibrium, the budget deficit is higher still.

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Page last modified on 1 June 2000