Cold war bridging the gap to peace Essay Example For Students

Cold war: bridging the gap to peace Essay Cold War: Bridging the Gap to PeaceOne might argue that the Cold War divided the world which is still present today. It also pulled countries ties with other countries further apart. However, these people fail to realize that the main superpowers of the Cold War are closer together than ever before. Both The United States and Russia (former U.S. S.R.) are now working together to limit the number of strategic arms further from what was settled at SALT I and SALT II. There are also numerous other areas where both the United States and Russia have become closer in relations than ever before. This created a stable world peace for the time being.The Arms Race in the Cold War brought about plenty of newly designed weapons capable of massive destruction. By 1969, both the United States and U.S. S.R. have developed over one thousand missiles to be used at their disposal. At the end of the Cold War and the fall of the U. S.S.R., both countries looked for ways to reduce the number of arms to prevent this atrocity from every happening again. In 1979, SALT-II was signed by the two countries but was lost over a quarrel over Afghanistan. What people dont realize was that the talks resumed and created a new program to further limit the number of ICBMs and other weapons of mass destruction. This program was entitled START (Strategic Arms Reduction Treaty). Besides including the two countries, Soviet satellite countries joined the program as well such as Belarus, Ukraine, and Kazakhstan. Countries developed a defense program called NATO which would be used to help counties being attacked by the U.S.S.R. and its satellite countries. After the fall of the U.S.S. R., on May 27th, 1997, Russia joined NATO in Paris which marked the beginning of a commitment to build together a lasting and inclusive peace in the Euro-Atlantic area based on the principles of democracy and cooperative security, (Lord Robertson- NATO Security General). Many find that this is a little ironic as NATO was created to help fight against Russia and the rest of the U.S. S.R. and now the once hated enemy has now become part of the program. Although ironic, the signing of Russia to NATO shows that the relations between Russia and the western world have improved greatly. One final area where the United States and Russia have become closer together is in space. During the Cold War, the Space Race was used to show technological and scientific superiority by one country over another. The race ended with the Apollo 11 mission in which Neil Armstrong became the first man to walk on the moon. While a lot has happened since that famous mission in 1969, including the creation of the International Space Station. With the creation of the International Space Station, space superiority is now a worldwide effort in which we all share a common goal. There is no race anymore, only a race against time rather than against each other. The Cold War brought upon plenty of hardships between countries and also the verge of a nuclear warfare in 1962 with the Cuban Missile Crisis. But with the Cold War over and the fall of the U. S.S.R., the strength in the ties between the two countries has grown to become as close as ever. Just goes to show that sometimes you have to go backward before you can go forward.

The Connection Between Language and Race Essays - Culture

The Connection Between Language and Race Language exists as much to conceal as to signify. Whatever admirable relations such terminology signifies, the use of such language can be a way of embedding racist attitudes. Race' was first used in the English language in 1508, in a poem by William Dunbar, and through the seventeenth and eighteenth centuries it remained essentially a literary word denoting a class of persons or things. It was only in the late eighteenth century that the term came to mean a distinct category of human beings with physical characteristics transmitted by descent. Race has been used to distinguish who is who and language has been used to communicate with each other verbally and by writing. The importance of language is a key aspect and interaction in our everyday lives. We use language to communicate to the people around us about how we feel and question/understands this world that we are in. We communicate great with our words, emotions, and timbre of our voice in an abundance of situation. Would you talk to a small child with the same words you would in a business meeting? The ability to socialize with each other, form relationships, collaboration, and it's what separates humans from other animal species. Communication drives our lives and better ourselves. I have always been interested in languages. Our language is the most important part of our being. I think it is important to learn other languages because it help us learn about other people and their culture, it's so simple that we can learn just from socializing this is one of the most basic parts of our identity. Language isn't the only way that humans communicate but it makes it so much easier to do s o with language. No matter where you go in the world, there was always be different languages everywhere. For example if you come to Los Angeles, it is a lot of people from different places coexisting in the same region. Languages can be gray in many ways what they also can make it difficult for people to communicate as well. If you speak English but someone else speak Spanish it may be difficult to understand what the other person is saying, making the conversation more difficult than if you both spoke the same language. Although it may be difficult for us to all speak the same language, we can definitely learn how to speak others language through tutoring and other resources. Especially if you like traveling around the world it is a good idea to know more than one language. Thus language is not the creation of one person or of one period but it is an collection, on which hundreds of generations and numerous individual workers have worked. Language is like a update to mankind. It raised Man from a low state of being to a articulate frame of mind. Additionally, man differs from animals is that man alone is the sole possessor of language. No doubt animals have some level of communication but that is not only inferior in degree to human language, but, is completely different and complex. Also, language helps with the spread of culture. Sometimes an idea or situation is not able to be explained with language, this makes it hard to translate. Language is so important to humankind I really can't imagine life without it. It can easy to forget how useful our words can be and the history that comes with it. Race refers to a person physical person such as hair, eyes and color. It also represents the concept of dividing people into groups based on physical characteristic (which is a result from your genetic ancestry). People may wonder does race play a role in our society today I would say yes! Throughout history we have witnessed the effects and even today there are still race issues going on in our society. Racism ties together with race so, people may may wonder does this still exist, I would say yes based on the way society is structured it highly suggest that it definitely exist. For example, higher prestige jobs tend to be based on race and background more so than the skills you're

Grand Bargain - Details and Explanation

Grand Bargain - Details and Explanation The term grand bargain is used to describe a potential agreement between President Barack Obama and congressional leaders in late 2012 on how to curb spending and reduce the national debt while avoiding steep automatic spending cuts known as sequestration or the fiscal cliff set to take place the following year to some of the most important programs in the United States. The idea of a grand bargain had been around since 2011 but the real potential emerged following the 2012 presidential election, in which voters returned many of the same leaders to Washington, including Obama and some of his fiercest critics in Congress. The looming fiscal crisis combined with a polarized House and Senate provided high drama in the final weeks of 2012 as lawmakers worked to avoid the sequestration cuts. Details of the Grand Bargain The term grand bargain was used because it would be a bipartisan agreement between the Democratic president and Republican leaders in the House of Representatives, who had been gridlocked on policy proposals during his first term in the White House. Among the programs that could be targeted for substantial cuts in a grand bargain are the so-called entitlement programs: Medicare, Medicaid and Social Security. Democrats who resisted such cuts would agree to them if Republicans, in return, sign off on higher taxes on certain high-income wage-earners much like the Buffett Rule would have imposed. History of the Grand Bargain The grand bargain on debt reduction first emerged during Obamas first term in the White House. But negotiations over the details of such a plan unraveled in the summer of 2011 and never began in earnest until after the 2012 presidential election. The disagreements in the first round of negotiations reportedly were the insistence by Obama and the Democrats on a certain level of new tax revenue. Republicans, particularly more conservative members of Congress, were said to have vigorously opposed raising taxes beyond a certain amount, reportedly some $800 million worth of new revenue. But following Obamas re-election, House Speaker John Boehner of Ohio appeared to signal a willingness to accept higher taxes in return for cuts to entitlement programs. In order to garner Republican support for new revenues, the President must be willing to reduce spending and shore up the entitlement programs that are the primary drivers of our debt, Boehner told reporters following the election. We’re closer than anyone thinks to the critical mass needed legislatively to get tax reform done. Opposition to the Grand Bargain Many Democrats and liberals expressed skepticism over Boehners offer, and restated their opposition to cuts in Medicare, Medicaid and Social Security. They argued that Obamas decisive victory allowed him a certain mandate on maintaining the nations social programs and safety nets. They also claimed the cuts in combination with the expiration of both the Bush-era tax cuts and payroll-tax cuts in 2013 could send the country back into a recession. The liberal economic Paul Krugman, writing in The New York Times, argued that Obama should not easily accept the Republican offer of a new grand bargain: President Obama has to make a decision, almost immediately, about how to deal with continuing Republican obstruction. How far should he go in accommodating the G.O.P.’s demands? My answer is, not far at all. Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still-shaky economy. And this is definitely no time to negotiate a grand bargain on the budget that snatches defeat from the jaws of victory.

Justice in the United Arab Emirates (law enforcement ) Research Paper

Justice in the United Arab Emirates (law enforcement ) - Research Paper Example However, the norms related to compliance, accountability and justice are more or less uniform despite the differences. Factors such as independence, transparency of the regulating bodies, negligence and abuse by officials responsible for ensuring justice, etc., play a key role in determining the success or failure of the law enforcement systems. This paper on justice in the United Arab Emirates discusses the status and composition of law enforcement in the region and compares the same with the United States. â€Å"Our system of government does not derive its authority from man, but is enshrined in our religion, and is based on Gods book, the Holy Quran. ... its teachings are eternal and complete, while the systems conjured up by man are transitory and incomplete.† Islam is an official religion in the UAE and holds a position of key importance within its constitution. Religion in the U.A.E., holds significant jurisprudence in the middle eastern states and the Sharia Law is the key basis of legal legislations in the middle east. The criminal justice system in the U.A.E., is composed of a two-fold regime which includes the Sharia Law - governed by Islamic legal doctrines and is based on the Holy Quran; the sayings of Prophet Mohammed (known as the Hadith); the juristic consensus arrived at by prominent religious scholars i.e. the Ulema; and the method of reasoning by analogy i.e. the Qiyas. The civil justice system on the other hand, is governed by concepts and ideologies on criminal law derived from the western world (Mostyn, 1982). The Sharia law is mostly applied to matters of personal concern and only the citizens are covered under this law, i.e. the punishments under this law are applicable to the citizens of the U.A.E., while expats and foreigners are referred to and dealt with under the criminal justice system which applies concepts and ideologies derived from western legal laws. The legal system in the U.A.E. is based on its constitution

The Effects of Long Term Tumour Diagnosis and the Disease of Cancer Essay

The Effects of Long Term Tumour Diagnosis and the Disease of Cancer - Essay Example I've found that not only does this disease place a strain on the patient but on those managing the patients care as well, myself included. That is why it is imperative to have managing goals obvious in the treatment regimen so that there is always an avid awareness of what the next step of treatment is going to be. This is a positive reinforcement not only for the patient, but for my role as the assisting nurse as well, along with the other medical professionals caring for him or her. Through my years of experience I've learned that breast cancer is one of the leading causes of death for women who develop a form of this disease. The treatments are varied depending upon the individuals own diagnosis and symptoms. Furthermore, medical professionals, especially nurses like me can have a difficult time managing the care regimen of women with breast cancer simply due to the fact that many women's perceptions of their risks and management of the disease are highly varied (McDonald 2002, p.183). Also, being faced with a diagnosis such as breast cancer is scary and an individual develops high anxiety and many fears. This is where the medical staff such as nurses and other medical professionals should provide counselling and understanding to ensure that the management of the disease does not interfere with the patients' mental health, which can be very difficult to do (Aldridge-Clanton 1998, p. 109). I've ran into this problem innumerable amounts of time, especially in re gards to how they feel about their bodies and what they are afraid their life will be like following the treatment process. Many patients state that just deciding on what treatment to choose can promote fear and worry in their minds. Also physicians can complicate the problem if they don't manage the care effectively. Therefore there can not be instances such as conflicting opinions among physicians because it only complicates the treatment for the patient (Aldridge-Clanton 1998, p.110). Furthermore, another issue that can concrete upon the problems is the idea women have about breast cancer and being diagnosed with it. Much of this is due to the fact of the idea that women have of breast cancer, of it basically being a hereditary form of cancer and those who do not have a family history of it don't tend to feel screening and other routine testing is much of a necessity. Therefore, I've found that I need to provide affirmation to many of the patients that anyone is susceptible to developing breast cancer, even those without a hereditary history. Sometimes this can be hard to do in gaining my patients understanding. Therefore, many patients false assumptions can lead to a variety of problems as medical history can attest too. Although 20% of women can have a family history of breast cancer only 5% to 10% are actually caused by the hereditary gene. Therefore it is imperative for nurses (such as myself) and medical care providers to stress the importance of mandatory sc reening and check-up's for breast cancer among all age groups and ethnicities

Impacts of Mergers Acquisitions on Shareholder Wealth

Impacts of Mergers Acquisitions on Shareholder Wealth This dissertation attempts to investigate, the impact of Mergers Acquisition (MA) on shareholder wealth in the European banking industry from 2003-2007 and explains in depth detail of the literature reviewed by the author to provide the basis of the successful achievement of the project. MA has been a popular research topic in finance with broad literature exists on MA. For this review to be achievable, a broad search for information was undertaken by means of the internet and library. The research question will examine the wealth effects (abnormal returns) of MA involving European banks using `event study` methodology over the period of 2003-2007 in both the announcement period and long run post acquisition period. In other words, can MA improves or destroy shareholder wealth of the targets, bidders and combined firms. 1.2 Introduction The decade of 1990 saw the biggest increase in European MA activity. Merger Acquisitions (MA) have been a significant phenomenon in the Europe. and the world economy which symbolizes one of the most important strategic decisions made by managers and shareholders of the engaged firm. Sudarsanam (2003,para1,p.1) argues shareholders and managers may be the most important stakeholders in MA but other groups such as workers, competitors, lenders, customers all have a collective interest in this activity. MA may be undertaken in order to replace an inefficient management, but sometimes two businesses may be more valuable together than apart. Motivation behind the mergers is to maximise the shareholders wealth. However, according to Jensen and Ruback (1983) and Sirower and O`byrne (1998), in almost two third of cases, mergers produce wealth gains for target shareholders and more or less zero gains to acquirers. Various studies have found that, usually the announcement of bank mergers neither create nor destroy shareholders value Pilloff and Santomero (1998). Also, some studies indicates that the announcement of certain types of bank mergers do create value, if that merger reduce costs. Berger, Demsetz, Strahan (1999) identified five fundamental dynamic factors that motivate corporate takeovers i.e. an increase of globalization, technological progress, financial deregulation, changes in customer demand and the integration of financial markets. Arnold (2005, para2, p.1041), defined mergers as the combining of two business entities under common ownership whereas Bruner (2005) states it as consolidation of two firms that creates a new entity in the eyes of the law. According to Investorwords.com acquisition is a acquiring control of a corporation, called a target, by stock purchase or exchange, either `hostile` or `friendly` which also be called takeover. E.g. in October 2007, Royal bank of Scotland (RBS) merged with Dutch bank ABN Amro to clinch Europes biggest ever banking takeover with 86% of ABN Amros shareholders accepting a 71bn euro (Ft.com). Bruner (2005) argues takeover activities are strategic transactions that could turn out to be an excellent investment of capital and resources. 1.3Merger waves Nowadays, MA is well known fact that comes in waves according to evidence from Bruner (2005), Gorton, Kahl Rosen (2005), Martynova Renneboog (2006). Five individual merger waves were observed in the UK economy in the last century i.e. 1900`s, the 1960`s, the 1970`s, the 1980`s and the 1990`s. (Kastrinaki, Stoneman 2007) Brankman, Garretsen, Van Marrewijk (2008) argues that, in terms of economic importance, the dominant merger wave unpredictable is the positive global outcome, suggesting that MA waves are an economy wide global phenomenon. The wave of bank mergers has been established to explain the diverse theories e.g. the `efficiency hypothesis` expect that mergers improve efficiency and help poor banks to survive as competition becomes increasingly rigorous in the banking industry. Gugler, Mueller, Yurtoglu (2004) finds that merger waves can be implicit if one identify that MA do not boost efficiency and doesnt increase shareholders` wealth but instead sited that MA waves are best come across as the answer of overvalued shares and managerial opinion. 1.4Why do MA occur? In various European countries, mergers have allowed banks to increase efficiency by assisting the coordination of the closing of branches. Banks shareholders and managers need to recognize the potential sources of economic gain emerged from MA. Banks can reduce costs and increase value in different ways e.g. diversification. I.e. if mergers generate cost synergies such as economies of scale, banks can reduce expenses. According to evidence from Berkovitch Narayanan (1993), Sudarsanam, Holl Salami (1996), Hannan Pilloff (2006), Martynova Renneboog (2006), the motives for MA have been categorised into the three main groups i.e. economic motive or synergy, managerial or agency problems and hubris. The actual distribution of merger gains between target and bidder shareholders will depend on their individual negotiating strengths. Therefore, following table shows the impact of mergers on shareholders wealth: Merger Motive Total Gains Target Gains Bidder Gains Synergy + + + Agency problems + Hubris 0 + 1.4.1 Synergy Motive The first key group that accounts for MA is an economic or synergy motive which means that two companies can achieve together which they cant achieve single-handedly. Siems (1996) argued that synergy theory projected that the acquiring bank can efficiently create synergies via economies of scale and scope by reducing costs and eliminating redundancies and duplication. Economies of scale occurs when the average unit cost of production declines as volume increases e.g. banking mergers in the UK of Bank of Scotland and Halifax of 30bn merger in May 2001, to create HBOS fifth major force in UK banking sector. The idea was that the Bank of Scotland was operating in north of the country and Halifax was in south by merging these two banks, were trying to reduce cost of processing banking transactions. Economies of scope occurs when the cost of producing several products in a multi product firm is lower than the cost of producing the same products by individual firms e.g. Banc assurance model, British banking and issuance giant Lloyds TSB acquired Scottish Widows in June 1999 for 7bn. Sudarsanam et al (1996) identified the sources of value creation into three main types i.e. operational synergy, managerial synergy and financial synergy. Operational synergy occurs during the recognition of economies of scale and scope, vertical integration, the elimination of duplicate activities, the transfer of knowledge or skills by the bidders management team and a reduction in agency costs by bringing organization precise assets underneath common ownership (Ravenscraft Scherer 1987, 1989 cited in Martynova Renneboog 2006). Sources of value in vertical mergers includes reducing transaction costs in which combining different stages of the production chain can reduce costs of communication and bargaining i.e. one companys output is other companys input and by putting together will make the business efficient. E.g. Microsoft bid for Yahoo in January 2008, worth $42bn that will create more powerful browser or have a better chance of tackling the internet search leader. Having said that, current trends towards outsourcing suggest that, the benefits from vertical mergers are limited. According to Martynova Renneboog (2006), establishments of operating synergies reduce production distribution costs and yielding an incremental cash flow accruing to the companys post-merger shareholders. Sudarsanam et al (1996) argues managerial synergy could occur if the bidder has a competent managerial team and takes over a target with fewer competent managers. Such takeover is disciplinary and likely to improve the wealth gain for both bidder and target shareholders. Having said that, there is a considerable risk of agency problems where the managers do not operate in the interest of shareholders. Martynova Renneboog (2006) argues that diversifying takeovers are likely to gain from financial synergies in which financial synergies may incorporate improved cash flow stability, cheaper access to capital, an internal capital market as well as contracting efficiencies created by a reduction in managers employment risk. Conglomerate mergers allow risk diversification by spreading the income stream of the holding company over a wide variety of products and markets. Sudarsanam et al (1996) finds that financial synergy materialize from three likely sources i.e. the tax advantage of unused debt, the growth opportunities and financial resources of the emerging companies and the coinsurance of debt of the two companies which result in lower costs of capital. 1.4.2 Agency factor The second main motive for MA is managerial or agency factor. Shareholders are Principals i.e. owners of companys assets and managers are employed as shareholders Agents to manage these assets on their behalf. Managers should make decisions that are consistent with the objective of maximize the shareholder wealth, but managers do not share this objective necessarily. Managers will have their own personal objectives which will be mainly concerned with maximizing their own welfare (Sudarsanam et al 1996). Therefore, managerial decisions in acquisitions may result in agent costs that reduce the total value of the joint firm as they do not maximise but weaken shareholders return. Berger, Demsetz, Strahan (1999) argues that one managerial intention may be empire-building. Executive compensation leads to increase with companys size, so managers may wish to accomplish personal financial gains by engaging in MA, although at least in part the higher observed compensation of the managers of larger institutions rewards greater skill and effort. To protect their firm-specific human capital, some managers may also try to reduce insolvency risk below the level i.e. in shareholders interest possibly by diversifying risk through MA movement. Arnold (2005) observes that the managers may enjoy the thrill of the merger process itself and as a result push for such deals to take place. 1.4.3 Hubris The third and final main motive for MA is Hubris which was specified by Richard Roll in 1986. Arnold (2005, para2, p.1055), define hubris as over weaning self confidence or, less kindly, arrogance. The hubris hypothesis states that the valuation of target by the bidder management is over optimistic and per se the bidding firms management overpays for the target. This perhaps for a number of bases such as decisions makers believing themselves, that the value exists when it does not or that their valuation is correct and that the market is not shimmering the full economic value of the combined firm. These managers may perhaps be overconfident or have misplaced faith in their ability to develop the profit performance of the target firm. Berkovitch Narayanan (1993) argues that the hubris maintains that decision makers in the bidding firms simply pay too much for their targets as a result of mistakes in overestimating the value of the targets. 1.5 Factors influencing shareholder returns Shareholders returns are not just affected by MA announcements, but they are also influenced by bid characteristics e.g. method of payment, cross border MA, friendly vs. hostile bids etc. 1.5.1 Method of payment The method of payment is one of the key variables that must be agreed between the buyer and seller to determine the firms` abnormal returns and overall outcome of the bid. According to Huang and Walkling (1989), The form of payment will influence bidding strategy if it affects the anticipated NPVs of an acquisition. Huang and Walkling found that when method of payment and degree of conflict were taken into account statistically, abnormal returns were no higher in tender offers than in mergers. Payment methods can affect NPVs through interrelations with either acquisition cost or the probability of success or both whereas Dube, Glascock Romero (2007) argues that the different stages of benefit growing to the target and acquiring firms shareholders is attributed to the alternative methods of payments. Arnold (2005, para1, p.1059) states that cash payment has been the most popular and most valued method of payment which offers higher return than equity. For example, bidding firm is expected to carry out stock financed merger if the management of bidding firm has better-quality inside information that the existing assets of the firm are overvalued. However, if the bidder firm has confidential information about the target company and trusts it to be undervalued, then it probably offer cash financed merger. Therefore, merger financed with stocks are a negative signal because the use of stocks as a method of payment is more likely to occur when the stock is overvalued, while the use of cash is taken as the firm being overvalued. Alternatively, if target shareholders consider that their bank is overvalued, they will prefer to receive cash. This theory is supported by empirical literature and it demonstrates that at the time of the bid announcement acquirers who propose cash, tend to practice higher abnormal returns than those who offer stock financed merger. The advantage of cash is that the acquirer shareholders hold the same level of control over their company because their proportion of ownership has not been diluted by giving target shareholders stock options in the merged company. Therefore, the returns to the shareholders of a bidding firm will be higher in cash financed merger than the stock. Brealey, Myers Marcus (2004, para1, p.599) states if cash is offered, the cost of the merger is not affected by the size of the merger gains. And if stock is offered, the cost depends on the gains because the gains show up in the post merger share price, and these shares are used to pay for the acquired firm. 1.5.2 Cross border MA The combination of worldwide financial markets has been going together with, increases in the number and tiny proportion of firms that operate in the global market and the globalization process has been to a rational extent encouraged by cross border MA. According to Brankman, Garretsen, Van Marrewijk (2005, 2008) cross border MA are the main medium for foreign direct investment. MA provides fundamental but also limited understanding of this form of takeover, as cross-border MA are most likely related to economy-wide shocks such as economic integration, changes in the legal and regulatory environment or likely asymmetric business cycles. Based on past empirical evidence, though the majority of the domestic MA create significant wealth gains for the targets and negative or zero returns for bidders, cross border MA could have different impact on related firms. Kang (1993) stated that cross border MA are expected to create more wealth than domestic ones because of existence of market imperfections which leads to guide multinational firms (MNC) having a competitive advantage over local firms. Foreign banks have to act in accordance with with both regulations at home and abroad; domestic credit establishments have cost advantages, since fulfilling two diverse sets of regulation enforce additional costs on foreign banks. Also, different regulations reduce the amount of related fixed costs. This decreases the possibility for banks to collect benefits from economies of scale and scope. Economies of scale propose that bank is able to reduce its costs by growing the volume of output of products and services it already produces. As a result of developing into new country, a bank increases its potential client base and benefits from economies of scale. According to economies of scope, banks that diversify activities could reduce costs by providing more services. 1.5.3 Friendly vs. hostile bids Analysis regarding the impact of hostile takeovers has been arguable, varying from the benefits of market discipline for maximizing efficient utilization of resources to the damage of market shortsightedness on the economy, on the society and on value built over years. Dube, Glascock Romero (2007) argues such debates can impact financial marketsand can be expected to expand as developing markets open up to foreign corporations and as economic power is redistributed amongst countries. Hostile takeovers occur, when the management of a firm resists the takeover attempt by bidders. Lambrecht and Myers (2007) state that in some cases a potentially hostile acquirer could be better off negotiating with the target management for a merger and that such a situation reduces the power of the target shareholder to extract value from the bidder. Hostile acquisitions also involve swifter and more drastic changes in target. In both friendly and hostile acquisitions, overpayment can arise due to age ncy reflection of managerial objective maximization by the acquirer management. Goergen and Renneboog (2003) analyzed the market reactions to the different types of takeovers i.e. friendly, hostile and bids with multiple bidders. They found that hostile bids created the largest abnormal returns for the target i.e. 13% on the announcement day. When a hostile bid is made, the share price of the target straight away reflects the expectation that opposition to the bid will guide to upward revisions of the offer price. Various empirical studies have found that the returns to bidders in hostile takeovers are negative; resulting in low possibility of success of a hostile bid. 1.6 Impact of MA on shareholders Almost all of the studies of MA in banking industry are based on US data. As we know, one of the main objectives of mergers is to maximise the shareholders value by the means of increase in dividends and increase in share prices, so the shareholders can enjoy the capital gains. The two most important methods which can be used to assess the impact of MA were explained by Firth in 1980. In the first method, accounting information is used to determine the firms` financial performance profitability. The second method believes in efficient market which can be used in share price movements to estimate the economic impact of the event. The second method, direct measures any increase or reduction in shareholders wealth but also experience from the reality that no market is really efficient which results to mislead conclusions due to movement in share price. In this project, author chose the second method i.e. an event study in which the focal point will be on three different sets e.g. the target, the bidder and the impact of MA on combined firm in the long run. Various empirical studies on MA have concentrated on establishing stock market reaction around the announcement of a deal and whether a merger creates value for the shareholders of target and bidding firm. Delong (2001) examined 56 banks between 1991 and 1995, for focusing mergers that create positive abnormal returns whereas diversifying mergers produce negative abnormal returns. DeLong (2001) has point out that upon announcement the market responds positively to mergers that focus both on the activities and geography, which is consistent with Siems (1996). Delong finds that the cumulative abnormal returns (CAR) of target firm has been increased to 14.8% after merger and the bidding firm loose a significant 2.2%, whereas the combined firm neither created nor destroyed the shareholders value. The result also shows that the long term performance is improved when mergers involve inefficient bidders, payment not just made by cash and earnings are not diversified. Cybo ottone and Murgia (2000) analysed 54 largest MA deals with CARs at +3,41% between 1988 and 1997 on the European banking sector in 14 European markets. They have found that at the time of announcement, there was a positive and an important increase in the market value of the banks engaged in these deals. They have found positive abnormal returns for both buyers and the sellers using the general market index in the short period of eleven days, but found negative market reaction to acquiring bank. In other words, European bank mergers generate value for the combined firms including the target and the bidders do not lose. Various studies have shown that in Europe and the USA, target shareholders earn positive abnormal returns from mergers. Cyboottone and Murgia (2000) stated that bidding firm shareholders earn positive abnormal returns in European studies whereas in USA studies bidding firm shareholders earn negative abnormal returns from the mergers. Shareholders of target European banks achieve more than the bidding bank shareholders, however, the difference is very tiny indeed. So in other words, we can say that Cyboottone and Murgia (2000) results are not consistent with the USA banking literature which shows that no value creation effects are usually found. Martynova and Renneboog (2006) examined the short term wealth effects of 2,419 European MA announcements between 1993 and 2001 in twenty eight European countries. They found that UK target created higher returns (9%) and UK bidders experienced lower wealth losses (0.5%) in comparison to the total European average result. They also identified the share price reaction of bidding firms; on a hostile merger i.e. it generated a negative abnormal return of -0.4%, on the other hand, a friendly acquisition created a positive abnormal return of 0.8%. Therefore, Martynova and Renneboog (2006) have concluded that MA do create value for the bidding and the target shareholders in which target shareholders enjoy majority of gains as they collect large premiums. Beitel (2001) look at 98 large MA of European banks between 1985 and 2000 using the event study in which he found out, the shareholders of the target firm enjoy positive cumulative abnormal returns (CAR), whereas the shareholders of the bidding firm doesnt earn any CARs. However, the combined analysis of bidding and target European bank merger do create the shareholders value significantly. They also notice a change in the results after 1998 that European bidding banks in large deals experienced negative CARs and especially cross border mergers of European banks appeared to have destroyed shareholders value. Table 1: Summary of bank mergers using event studies of previous Abnormal Returns to shareholders MA studies Sample period Sample size Event Window Target CARs (%) Bidder CARs (%) Antoniou, Arbour Zhao (2006) 1985-2004 396 -2 to +2 17.37 -3.32 Cybo-ottone Murgia (2000) 1988-1997 54 -10 to 0 16.1 Not significant DeLong (2001) 1988-1995 280 -10 to 1 16.61 -1.68 Sudarasanam, Holl Salami (1996) 1980-1990 429 -20to+40 days 29 -4 Becher (2000) 1980-1997 553 -30 to +5 22.64 -0.1 Siems (1996) 1995 19 -1 to +1 13 -2 Houston Ryngaert (1997) 1985-1991 184 -2 to +2 20.40 -2.40 Ismail and Davidson (2005) studied 102 merger announcements in European banking industry between 1987 and 1999. They found positive abnormal returns for targets and the return to bidders differs across the deal type, also the merger deals earn higher returns than acquisition deals. They reported that the high competition in the market and reduction in the profitability in the banking industry in Europe is extending a depressing picture of performance of the future. They also reported low positive abnormal returns to target shareholders compared to other findings in the banking industry in Europe. The reason behind is that the bidder not ready to pay higher premiums in a competitive environment in which level of profits are decreasing. Ismail and Davidson (2005) pointed out that if equity is used as a method of payment instead of cash, then merger deals earn lower returns because of the fact is that equity signal to the market that the equity is overvalued which is consistent with fin dings of Huang and Walkling (1987). 1.7 Conclusion A bank acquires another bank because of number of reasons e.g. diversification, market power, managers preference etc. This literature review looks at the motives of MA based on the past academic studies i.e. Berkovitch Narayanan (1993), Sudarsanam et al (1996), Hannan Pilloff (2006), Martynova Renneboog (2006). Having said that, it is still not clear whether synergy gains or personal quest of managers is behind motivating majority of MAs. Evidence suggests that the managers may use the free cash flow for mergers that may produce negative NPV investments, because managers pursue their own interests rather than those of shareholders, resulting in mergers to not create value for shareholders. Whereas hubris, which supports the efficient market hypothesis (EMH) suggests that any bid for the target at premium overpays and it is result of the hubris. Arnold (2005) state it is similar to `winners curse` where the highest bidder will bid typically higher than the expected value of the purpose. However, most of the evidence suggests that the target shareholders gain positive abnormal returns while the cumulative abnormal returns (CARs) to the bidders are significantly negative and the combined banking firms seems to improve the shareholders value. Various studies also supports the fact that target shareholders gain at the expense of bidder shareholders and bank mergers do not create value for the combined firm in stock market reaction to bank mergers. Also, evidence shows that shareholders returns are not only affected by the MA announcements but they are also influenced by bid characteristics. 2.0 Methodology 2.1 Introduction Choosing appropriate research methods are clearly vital. According to Veal (1997) it is important for the researcher to be aware of the range of methods available and not to make claims that cannot be justified on the basis of the methods used. This part of this dissertation gives an outline how information was collected, the sample design statistics and which methodology is used by concentrating on European banking sector mergers between 2003 and 2007. Firstly, we have to decide the philosophy underlying this research, which involves choosing a paradigm. Collis and Hussey, 2003, p. 352 define paradi

Communism vs Capitalism Essay -- Communism Essays

Capitalism vs. Communism   Ã‚  Ã‚  Ã‚  Ã‚  Throughout history, there have been many systems developed in order to have a better society. Two of the most analyzed, and debated systems that have tired to change an economy for the best are communism, and capitalism. Communism, and capitalism have been compared on many levels, such as why they will or will not work, and which one works better. Throughout this essay I will concentrate on the differences, and similarities of how each operates, along with the benefits, and problems that each of them produces.   Ã‚  Ã‚  Ã‚  Ã‚  Both of these economic systems theories came about around the same time, in the late 17th to mid18th centuries. One of the main contributor for capitalism was Adam Smith, writing The Wealth of a Nation in 1776, and Karl Marx for communism publishing the Communist Manifesto in 1848. These both were looked as a manual or guide for achieving such advancements. Communism called for the people to not be selfish and work for the benefits of the community rather for their well being. It asks them to see that what benefits the whole, benefits themselves. Capitalism on the other hand is focused on working for individual growth, and personal ownership to provide wealth for one’s self. Communism plans to have a higher power or government control the economy to create a better way of living, by which all goods are equally distributed. As capitalism wants the government to not play a big role i...