Thursday, September 3, 2020
Characters: Cathy and Dave, a wealthy expert couple Al, a land sales rep Cathy and Dave are youthful, upwardly portable. They hold great expert occupations in downtown Chicago. One day Cathy got a greeting via the post office, from a hotel called Green Acres (GA), which was situated close to the mountains, around eight hour driving time from Chicago. The mailer welcomed the youthful couple to go through two evenings liberated from cost and get $50 for costs. All they needed to do consequently was to tune in to an introduction, see a video, and take a voyage through the retreat for around two hours. Extra conditions included 24 hour advance booking of the live with 24 hour notice for undoings, and a legitimate Visa. Green Acres would charge $50 for a flake-out. In spite of the fact that the letter made no notice of it, Cathy and Dave realized the greeting was a land advancement and speculated that the two hours with the GA staff implied a hard sell for an apartment suite or a townhouse close to a lake or a fairway, something they didn't need. They chose to take the offer in any case so as to get a free excursion and orchestrated to visit GA the next end of the week. Cathy and Dave made some great memories at GA. The main harsh purpose of the outing was the last trade they had with Al the sales rep. Toward the finish of the two hour introduction when Cathy and Dave had wouldn't accepting any GA properties, Al taken a gander at Dave in dissatisfaction and stated, Ã¢â¬Å"If you knew you werenÃ¢â¬â¢t going to purchase any property here, for what reason did you come? Our organization burned through $300 to get you down here, and you have taken food off my familyÃ¢â¬â¢s table. What you did is improper. If it's not too much trouble donÃ¢â¬â¢t do it again.Ã¢â¬ At this Dave countered, Ã¢â¬Å"Your letter was clear, there was nothing in it that said an acquisition of land was included, and we had no commitment to purchase anything from you. Your greeting was genuine, I donÃ¢â¬â¢t owe you or your family anything and I loathe what you only said.Ã¢â¬ At the finish of this awkward trade, Cathy and Dave left the stay with an unsavory inclination. However, the upsetting emotions didn't keep going long in light of the fact that the drive back through the mountains was really breathtaking. Following a couple of days Cathy said to Dave, Ã¢â¬Å"You know, IÃ¢â¬â¢m still frantic about what Al said to us at Green Acres. Would it be advisable for us to keep in touch with his chief, or to the land board or to some administration office? You know, on the off chance that we donÃ¢â¬â¢t accomplish something, some poor clueless individuals may succumb to their gimmicks!Ã¢â¬ Dave answered, Ã¢â¬Å"No, I donÃ¢â¬â¢t figure we should burn through whenever on this. A great many people know, or should comprehend what they are getting into-there are no free snacks! Other than if we grumble, Al may lose his employment and when weÃ¢â¬â¢ll be truly taking the food from his familyÃ¢â¬â¢s table!Ã¢â¬ What Are the Relevant Facts? 1. Cathy and Dave are instructed and generously compensated. 2. They got a spontaneous greeting from Green Sections of land (GA). 3. The greeting had nothing in it that said they had to purchase anything from GA. 4. They effectively speculated that the GA deals staff would squeeze them to purchase land. 5. GA was eight hours driving time from Chicago. 6. Al made a business introduction. 7. Cathy and Dave tuned in to the introduction. 8. Al said Cathy and Dave had acted corruptly and had denied him of a possibility of acquiring a deals commission. 9. Dave said that they had satisfied their commitment, as laid out in the greeting, and had not acted mistakenly. What Are the Ethical Issues? 1. What is the job of incitements in advertising? 2. What is the obligation of people who acknowledge affectations? Do they have any good commitments to buy products on the off chance that they acknowledge free endowments from vendors? 3. Is giving alluring endowments to potential purchasers a moral practice? Does the size of the blessing or the affectation matter? 4. Cathy and Dave were advanced, taught city people and didn't feel forced to purchase from GA. Do less taught or less complex purchasers feel forced to purchase stock under temptations of blessings? Would such business practice be viewed as moral? 5. Ought to Cathy and Dave grumble with the goal that other defenseless individuals may not be forced into purchasing costly property they don't need? Who Are the Primary Stakeholders? Ã¢â¬ ¢ Cathy and Dave Ã¢â¬ ¢ Al Ã¢â¬ ¢ GA Ã¢â¬ ¢ GAÃ¢â¬â¢s investors Ã¢â¬ ¢ Other likely purchasers, particularly the powerless ones What Are the Possible Alternatives? 1. Cathy and Dave can overlook the episode and do nothing. 2. They can document a grumbling with GA. 3. They can document a grumbling with the suitable specialists. 4. They can keep in touch with Al. What Are the Ethics of the Alternatives? 1. What is the best strategy for Cathy and Dave from the ethical viewpoint? What is the best strategy that Cathy and Dave take that will give the best advantage to the best number? 2. Do Cathy and Dave and other likely clients have rights not to be constrained or instigated into activities they may not wish to take? Do GA and Al have rights to seek after their business and individual interests? Were any rights abused? 3. What is the only activity for this situation? Which option disperses the weights and obligations reasonably? In the event that Cathy and Dave act and if GA improves its practices everybody with the exception of Al may advantage. Not whining may mean Al will proceed with his strategies and subvert GAÃ¢â¬â¢s objectives accepting that word would get around and extra clients will be insulted. What Are the Practical Constraints? None. What Actions Should Be Taken? 1. What ought to Cathy and Dave do? 2. Which option would you pick? 3. Which approach (utilitarian, rights, or equity) sounds good to you in this circumstance? Obviously, no activity could mean clueless individuals might be tricked into purchasing costly land with conceivably extreme results. Grievances could prompt improved practice and better execution however could prompt the loss of AlÃ¢â¬â¢s work. 4. What is the correct activity?
Thursday, August 27, 2020
Definition and Examples of Indicative Mood in English In customary English sentence structure, demonstrative mind-set is theÃ¢ form-orÃ¢ mood-of the action word utilized in common articulations: expressing a reality, communicating an assessment, posing an inquiry. TheÃ¢ majority of English sentences are in the characteristic mood.Ã Also called (basically inÃ¢ 19th-century syntaxes) demonstrative mode. In present day English,Ã¢ as an aftereffect of theÃ¢ loss ofÃ¢ inflectionsÃ¢ (word endings), action words are not, at this point set apart to show mind-set. AsÃ Lise Fontaine calls attention to inÃ Analysing English Grammar: A Systemic Functional IntroductionÃ (2013),Ã The third-individual singularÃ¢ in the demonstrative moodÃ¢ [marked byÃ¢ -s] is the main residual wellspring of state of mind markers. There are three significant dispositions in English: the demonstrative mind-set is utilized to offer real expressions or suggest conversation starters, the basic state of mind to communicate a solicitation or order, and the (seldom utilized) subjunctive mind-set to show a desire, uncertainty, or whatever else as opposed to actuality. EtymologyFrom the Latin, expressing Models and Observations (Film Noir Edition) The state of mind of the action word lets us know in what way the action word is conveying the activity. When we offer essential expressions or pose inquiries, we utilize the demonstrative state of mind, as in I leave at five and Are you taking the vehicle? The characteristic state of mind is the one we utilize most often.(Ann Batko, When Bad Grammar Happens to Good People. Vocation Press, 2004)I got the blackjack directly behind my ear. A dark pool opened up at my feet. I made a plunge. It had no bottom.(Dick Powell as Philip Marlowe, Murder, My Sweet, 1944)I dont mind on the off chance that you dont like my habits, I dont like them myself. They are really terrible. I lament over them on long winter evenings.(Humphrey Bogart as Philip Marlowe, The Big Sleep, 1946)Joel Cairo: You generally have a smooth explanation.Sam Spade: What do you need me to do, figure out how to stutter?(Peter Lorre and Humphrey Bogart as Joel Cairo and Sam Spade, The Maltese Falcon, 1941)There are just three different ways to manage a blackmailer. You can pay him and pay him and pay him until youÃ¢â¬â¢re destitute. Or on the other hand you can call the police yourself and let your mystery be known to the world. Or then again you can execute him.(Edward G. Robinson as Professor Richard Wanley, The Woman in the Window, 1944) Betty Schaefer: Dont you now and again abhor yourself?Joe Gillis: Constantly.(Nancy Olson and William Holden as Betty Schaefer and Joe Gillis, Sunset Boulevard, 1950)She loved me. I could feel that. The manner in which you feel when the cards are falling ideal for you, with a decent heap of blue and yellow chips in the table. Just what I didnÃ¢â¬â¢t know at that point was that I wasnÃ¢â¬â¢t playing her. She was playing me, with a deck of checked cards . . ..(Fred MacMurray as Walter Neff, Double Indemnity, 1944)Personally, IÃ¢â¬â¢m persuaded that crocs have the correct thought. They eat their young.(Eve Arden as Ida Corwin, Mildred Pierce, 1945)The Traditional MoodsThe names demonstrative, subjunctive, and basic were applied to action word structures in customary language structures, with the end goal that they perceived characteristic action word structures, subjunctive action word structures, and basic action word structures. Characteristic action word structures were suppose d to be valid by the speaker (unmodalized proclamations) . . .. [I]t is smarter to see mind-set as a non-inflectional thought. . . . English essentially syntactically actualizes disposition using statement types or modular helper action words. For instance, as opposed to state that speakers utilize demonstrative action word structures to make attestations, we will say that they commonly utilize explanatory sentences to do so.(Bas Aarts, Oxford Modern English Grammar. Oxford University Press, 2011) The Indicative and the SubjunctiveHistorically, the verbal classification of MoodÃ¢ was once significant in the English language, as it despite everything is today in numerous European dialects. By unmistakable types of the action word, more seasoned English was capable toÃ¢ discriminate between the Indicative Mood-communicating an occasion or state as a reality, and the Subjunctive-communicating it as an assumption. . . . These days the Indicative Mood has become terrifically significant, and the Subjunctive Mood is minimal in excess of a reference in the portrayal of the language.(Geoffrey Leech,Ã Meaning and the English Verb, third ed., 2004; rpt. Routledge, 2013)Ã¢ Articulation: in-DIK-I-tiv disposition
Saturday, August 22, 2020
Doc Holliday Biography Doc Holliday (conceived John Henry Holliday, August 14, 1851-November 8, 1887) wasÃ¢ an AmericanÃ¢ gunfighter, card shark, and dentist.Ã AÃ friend of individual gunslingerÃ andÃ lawmanÃ Wyatt Earp, Holliday turned into an iconicÃ¢ characterÃ¢ of theÃ American Wild WestÃ¢ throughÃ¢ his job in theÃ¢ gunfight at the O.K.Ã Corral.Ã Despite his notoriety forÃ¢ having gunned downÃ¢ Ã¢â¬Å"dozensÃ¢â¬ of men, later research recommends Holliday killed close to two men.Ã Over the years, HollidayÃ¢â¬â¢s character andÃ¢ life have been portrayed in numerous motion pictures and TV arrangement. Quick Facts: Doc Holliday Full Name:Ã John Henry (Doc) HollidayÃ Known For:Ã Old West American speculator, gunfighter, and dental specialist. Companion of Wyatt EarpÃ Born:Ã August 14, 1851, in Griffin, GeorgiaDied:Ã November 8, 1887, inÃ Glenwood Springs, ColoradoParents:Ã Henry Holliday and Alice Jane (McKey) HollidayEducation:Ã Pennsylvania College of Dental Surgery, D.D.S. Degree, 1872Ã Key Accomplishments:Ã Fought close to Wyatt Earp against the Clanton Gang in the Gunfight at the OK Corral. Went with Wyatt Earp on his Vendetta RideÃ Spouse:Ã Big Nose KateÃ HoronyÃ (common-law)Ã Famous Quote:Ã Ã¢â¬Å"All I need of you is ten paces out in the street.Ã¢â¬ (to gunfighter Johnny Ringo). Ã Early Life and EducationÃ¢ Ã Doc Holliday was conceived on August 14, 1851, in Griffin, Georgia, to Henry Holliday and Alice Jane (McKey) Holliday. A veteran of both theÃ MexicanÃ¢â¬American WarÃ¢ and theÃ Civil War, Henry Holliday showed his sonÃ¢ to shoot.Ã In 1864, the family moved to Valdosta, Georgia, where Doc went to first through tenth grade at the private Valdosta Institute.Ã Considered a remarkable understudy, Holliday exceeded expectations atÃ¢ rhetoric, syntax, science, history,Ã¢ and Latin.Ã¢ <img information srcset=https://www.thoughtco.com/thmb/PQdPnED2rOYlcJ2UWgBj7zRROSE=/300x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-542628662-bdde89caa23e4753b3ebf7cc25cb889e.jpg 300w, https://www.thoughtco.com/thmb/Ytilw2vCpo6XKCDz6jl3YVKK8ME=/400x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-542628662-bdde89caa23e4753b3ebf7cc25cb889e.jpg 400w, https://www.thoughtco.com/thmb/qPFsY7o-ww4y49FRDXh2QKfRZ2Q=/500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-542628662-bdde89caa23e4753b3ebf7cc25cb889e.jpg 500w, https://www.thoughtco.com/thmb/3aEQ2TNmbvhrCkw8Ydh3VA5aY7Y=/700x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-542628662-bdde89caa23e4753b3ebf7cc25cb889e.jpg 700w information src=https://www.thoughtco.com/thmb/9lEZ2bnecHGOrzOjwcTO4rTo-Y0=/1024x700/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-542628662-bdde89caa23e4753b3ebf7cc25cb889e.jpg src=//:0 alt=Doc Holliday class=lazyload information click-tracked=true information img-lightbox=true information expand=300 id=mntl-sc-square image_1-0-6 information following container=true /> Doc Holliday. John van Hasselt/Getty Images In 1870, the 19-year-old Holliday moved to Philadelphia,Ã¢ where he got a Doctor of Dental Surgery degree from the Pennsylvania College of Dental Surgery on March 1, 1872.Ã¢ Holliday HeadsÃ WestÃ In July 1872,Ã Holliday joined aÃ¢ dental practice in Atlanta,Ã¢ but was before long determined to have tuberculosis. Trusting the drier atmosphere would helpÃ¢ his condition, he moved to Dallas, Texas, in the end opening his own dental practice. As hisÃ¢ coughing spells expanded and his dental patients surrendered him, Holliday went to betting to help himself. In the wake of having been captured twice for illicit gamblingÃ¢ and being absolved of homicide, he left Texas in January 1875. Betting hisÃ¢ way west through states and urban communities where wagering was treated as a legitimate calling, Holliday settledÃ inÃ Dodge City, Kansas, in the spring of 1878. It was in Dodge CityÃ¢ that Holliday become a close acquaintence with partner city marshal Wyatt Earp.Ã Though there were no reports of the occurrence in theÃ Dodge City papers, Earp credited Holliday for sparing his life during a shootout with outlaws at theÃ Long Branch Saloon.Ã¢ The Gunfight at the O.K. CorralÃ¢ InÃ SeptemberÃ 1880, HollidayÃ¢ rejoinedÃ¢ his companion Wyatt EarpÃ¢ in the wild and blasting silver mining camp town of Tombstone,Ã ArizonaÃ Territory.Ã Then aÃ Wells FargoÃ¢ stagecoachÃ¢ security operator, Wyatt joinedÃ¢ his siblings, Deputy U.S. Marshal Virgil Earp, and MorganÃ Earp as TombstoneÃ¢â¬â¢s Ã¢â¬Å"police force.Ã¢â¬ Ã In TombstoneÃ¢â¬â¢s gamblingÃ¢ and alcohol filled environment, Holliday before long got engaged with the savagery that would result in theÃ Gunfight atÃ¢ the O.K. Corral.Ã¢ Restricting theÃ EarpsÃ for control of TombstoneÃ¢ was the infamousÃ Clanton Gang, aÃ¢ group ofÃ¢ localÃ¢ cowboysÃ¢ led byÃ¢ the famous steers rustlersÃ¢ and murderersÃ Ike Clanton and TomÃ McLaury. OnÃ October 25, 1881,Ã IkeÃ Clanton andÃ TomÃ McLauryÃ came to town for provisions. Over theÃ¢ course of theÃ¢ day, they had severalÃ¢ violentÃ¢ confrontations with the Earp siblings. On the morning of October 26,Ã IkeÃ¢â¬â¢s sibling Billy ClantonÃ¢ and TomÃ¢â¬â¢s sibling FrankÃ McLaury, alongside gunfighter Billy Claiborne,Ã¢ rode to town to give reinforcement to Ike and Tom. When FrankÃ McLauryÃ and BillyÃ Clanton discovered that theÃ EarpsÃ hadÃ justÃ pistol-whipped their siblings, theyÃ¢ vowed vengeance. AtÃ¢ 3 p.m. on October 26, 1881, theÃ EarpsÃ andÃ the quickly deputizedÃ Holliday confronted the Clanton-McLauryÃ gang behind the OK Corral. In the 30-seconds of gunfire that followed, Billy Clanton and bothÃ McLauryÃ brothers were killed.Ã Doc Holliday, and Virgil and Morgan Earp were injured. While he was available at the gunfight, Ike Clanton was unarmed and fled the scene. In spite of the fact that a regional court found that theÃ EarpsÃ and Holliday hadÃ¢ acted inside their obligations as lawmen at the O.K. Corral, Ike Clanton was not fulfilled. In the followingÃ¢ weeks, Morgan Earp was killed and Virgil Earp was for all time damaged by a gathering of obscure cowboys.Ã In what has gotten known as theÃ Earp Vendetta Ride, Holliday joined Wyatt Earp as a major aspect of a government group that sought after the suspected outlawsÃ¢ for longer than a year, killing four of them.Ã¢ Later LifeÃ¢ and DeathÃ inÃ ColoradoÃ Holliday moved to Pueblo, Colorado, inÃ April 1882.Ã In May, he was arrestedÃ¢ for the homicide of Frank Stilwell, one of the cattle rustlers he had pursued down while riding with Wyatt EarpÃ¢â¬â¢s government force. When Earp scholarly of the capture, he arrangedÃ¢ to have the solicitation to remove HollidayÃ¢ to ArizonaÃ¢ denied.Ã¢ Ã¢ In the winter of 1886,Ã Holliday met his old companion Wyatt Earp for a last time in the hall of the Windsor Hotel in Denver. EarpÃ¢â¬â¢s precedent-based law spouse Sadie Marcus later describedÃ Holliday as a continually hacking skeleton remaining on Ã¢â¬Å"unsteady legs.Ã¢â¬ Ã¢ Ã¢ Holliday spent the most recent year of his life in Colorado, kicking the bucket of tuberculosis in his bed at the Glenwood Springs Hotel on November 8, 1887, at age 36.Ã HeÃ isÃ buried in Linwood Cemetery sitting above Glenwood Springs, Colorado.Ã¢ LegacyÃ¢ Outstanding amongst other perceived characters of the American Old West, Doc Holliday is associated with his kinship with Wyatt Earp.Ã In a 1896 article, Wyatt Earp saidÃ¢ of Holliday:Ã¢ Ã¢â¬Å"I discovered him a steadfast companion and great organization. He was a dental specialist whom need had made a card shark; a courteous fellow whom sickness had made a drifter; a thinker whom life had made a harsh mind; a long, lean blonde individual about dead with utilization and simultaneously the most dexterous speculator and nerviest, speediest, deadliest man with a six-firearm I ever knew.Ã¢â¬ Ã¢ Sources andÃ Further Reference Roberts, Gary L. (2006).Ã Doc Holliday: The Life and Legend.Ã John Wiley and Sons, Inc. ISBN 0-471-26291-9Ã Doc Holliday-Deadly Doctor of the American West. Legends of America.Ã Ã OK Corral. History.netÃ Urban, William L. (2003).Ã Ã¢â¬Å"Tombstone. Wyatt Earp: The Ok Corral and the Law of the American West.Ã¢â¬ The Rosen Publishing Group. p. 75. ISBN 978-0-8239-5740-8.
Characters of dread Essays Characters of dread Essay Characters of dread Essay In Alexander Mackendricks 1957 exemplary, Sweet Smell of Success, the character of J. J. Hunsecker is amazingly incredible, regarded and desolate. This is likewise valid for the character Jerry Langford in Scorseses 1983 film, The King of Comedy. The two characters share places of matchless quality and accordingly can be handily appeared differently in relation to reference to their similitudes and contrasts. J. J. is the most remarkable paper reporter in New York, in this manner yielding authority with his order over the press. Jerry is an acclaimed anchor person and comic (I. e. The King of Comedy) and thusly his capacity lies ithin the authority over the diversion business. How is this feeling of intensity comparable between characters? The two characters can represent the deciding moment somebody in their individual fields. For instance in Sweet Smell of Success, J. J. can help press specialist, Sidney Falco, by his power over The New York Globe and what gets distributed. J. J. at that point utilizes this influence to further his potential benefit by utilizing Sidney for his own gadgets. Likewise, in The King of Comedy, Jerry has the position to make Rupert Pupkin an effective entertainer by permitting him to perform on his show. Jerry precludes this from claiming Rupert until a lot is on the line and its an immeasurably significant issue. Right now Jerry utilizes his capacity to spare his own life. In spite of the fact that these men are both in comparable hierarchal positions, they are seen contrastingly by the general population and people around them. The two men are regarded, anyway this is demonstrated in an unexpected way. With J. J. the regard of others stems exclusively from dread. Individuals fear a lord who is manipulative, degenerate and known to play filthy. In this manner, he is regarded in light of the fact that he requests it. For instance when J. J. says; Sidney, this syrup your giving out with you pour over waffles, not J. J. Hunsecker, this shows Sidney that J. J. s not to be played with and that he won't aside from any jabber from people around him. J. J. has additionally formed this possibly talk when addressed sort of condition, which requests adoration in its own right. On opposite finish of the range, Jerry is regarded out of reverence by people in general and everyone around him. He is a humori st and a well disposed character hence individuals love him. This is appeared in the film when he is strolling down the road and fans approach him to shake his hand. He is as yet regarded as the lord of New York, anyway this is on a more ersonal level than J. J. since individuals don't fear him. The two characters share the wonders of riches, influence, acclaim yet in addition depression. J. J. is encircled by individuals, anyway they are exclusively associates as opposed to companions. From the scenes at his condo we see that J. J. is really alone. The main individual he appears to think about is his more youthful sister. It appears as if his longing for influence and riches has decimated all companionships or any took shots at affection. This is valid for Jerry too. At the point when we see his house in the Hamptons, he is the just one there other than the employed assistance. The table is set for ne, implying to the crowd that he has no spouse or sweetheart. In this manner both of these characters show Just how forlorn it really is at the top. The characters of J. J. furthermore, Jerry have been thoroughly analyzed concerning their capacity, regard and depression. These men share the ability to control people around them for their own needs. They are both regarded however this stems from better places for these characters; one is from dread and the other is from adoration. At long last, albeit the two men have made it to the highest point of their industry it appears just as they have lost all friendships en route.
Friday, August 21, 2020
Advancement is one expression that is intricate to characterize. This is on the grounds that no exact meaning of advancement that is internationally acknowledged has been settled on. This is comprehensive of the human science field that has seen such a large number of speculations realized to characterize innovation. Be that as it may, we can have a general definition characterizing innovation as a post-middle age period that is perceivable with an extreme change from the pre-current idea of agrarianism to a universe of industrialization, private enterprise, urbanization, defense and general social change that was immensely received by the whole world, however having its root beginnings in Europe in the occasions around 1700. Renaissance was the prompt time that went before innovation; renaissance for this situation alluding to the last snapshots of the moderately aged period. This period was about logical and mechanical transformation that saw the ascent of numerous developments that have come to characterize the advancement of modernization. The social change can be ascribed to the illumination of mankind as Immanuel Kant expressed in one of his popular books. Numerous definitions have been in this way raised in the field of human science and by various savants. Karl Marx characterizes advancement as an entrepreneur transformation. Free enterprise is a condition of financial status that depends on independence in that an individual puts resources into various proprietorships or organizations for the sole reason for individual advantages or revenue driven thought process. He along these lines considers innovation to be an insidious wonder and truly scrutinizes it. Then again, Max Weber characterizes innovation based on close to home convictions that in the long run lead to the social changes that happen in modernization. He considers advancement to be a pattern that prompts the decrease in conventional qualities and amplifies justification that he so much feelings of dread would inevitably consume off mankind. He is so negative on the impacts of advancement given the mean definition that he provides for the marvel. The remainder of the savants to give a definition in our article will be Emile Durkheim. Durkheim in any event had a hopeful meaning of innovation, however not so much idealistic. He characterized innovation based on work division. He accepted that innovation would acquire the world the idea of expansion of financial exercises in the human culture. He considered modernization to be a move of progress in the manner the network worked; the solidarity change from mechanical to natural. On the critical side, he anyway fears anomie, an express that portrays insignificant good direction gave to people in the general public (Calhoun, Gerteis, and Moody 46). As characterized in the starting part, innovation conveys along various social changes and social qualities that characterize an obvious contrast from similar components that were knowledgeable about the pre-present day age. Advancement has extraordinarily influenced the premise of the family on the planet today. The family as an establishment, combined with numerous different things like marriage, ethical quality and religion have all been undermined. In the pre-present day age, the profound quality of the general public originated from the family foundation. Hence, the mindfulness that was constantly engaged with the childhood of an ethical family was the main need by the family heads around then (Macionis 4). Legislative issues has experienced powerful change because of the impact advancement. In the pre-present day days, governmental issues was not as dominative for what it's worth in the cutting edge world. Innovation has made governments have an exceptionally dominative hand by intensely controlling its residents by extremely complicated and uncongenial bureaucratic arrangement. The economy is another element that has characterized advancement. In the pre-present day period, economy was characterized by agrarian profitability. This can even be exhibited by the Feudalist arrangement of government that existed in Europe. This arrangement of a political framework included land being traded thus for administrations. It was where the rulers, who were the land proprietors, gave out land to vassals, who were the inhabitants. The land in this sort of political framework was alluded to as fief. Notwithstanding, the economy in the advanced society has totally taken a curve, with free enterprise being the framework. Private enterprise focused on the individual interests and benefits thought process of either an individual or a nation. This implies no reasonable prioritization will be taken if at all a nation or an individual has the point of making benefit. This is a framework that was broadly denounced by savants, for example, Karl Marx (Calhoun, Gerteis, Moody, Pfaff, and Virk 122). The various logicians who thought of the different meanings of advancement had changed desires and expectations that would go along innovation. Karl Marx had an extremely negative perspective on innovation. He profoundly reprimanded free enterprise, an economy framework that he asserted set in with advancement. He considers private enterprise to be a benefit roused framework and in this way a narrow minded framework. He additionally dreaded the ascent of classes in the general public, something that he depicts as the child of private enterprise. He despicably denounces private enterprise as voracity and personal responsibility and had negative desires for the cutting edge world. He predicts difficulties, for example, outrageous destitution while different nations swam in a ton of riches, all with the coming of an industrialist economy. Max Weber, with his meaning of innovation being founded on human discernment, had his feelings of dread on the corruption of mankind. Weber was likewise cynical in transit innovation would change the world. He anticipated the distance of social equity that would set in because of the adjustment in people convictions achieved by innovation (Calhoun et al 122). Among these three logicians, Emile Durkheim at any rate had a hopeful perspective on the setting in of innovation. With his meaning of innovation being founded on the division of work, he saw advancement getting exceptional development of the economy. This would happen because of work expansion and specialization that would similarly disperse human asset to each financial movement. His desires for the appearance of innovation were accordingly high. In spite of him having these uplifting desires, he had a dread of anomie. This is where there is moderate debasement of ethics in the general public because of dismissal of good direction by human who might have every one of their psyches set towards the advancement of the economy. The subject of advancement has constantly raised a great deal of contentions. Numerous logicians have raised speculations attempting to characterize advancement yet no articular hypothesis has been universally acknowledged to characterize innovation. With this paper however, we have had a diagram of the different meanings of innovation by the three savants: Karl Marx, Emile Durkheim and Max Weber. We have likewise observed their hunches, sentiments and desires for innovation. Various parts of advancement and the difference in these perspectives that influence innovation have been talked about and contrasted with the pre-present day age. In any case, even with all these, it should in any case be evident that there still exists no exact meaning of advancement and the term is available to any conviction that any individual could think of.
Essay Writing For Beginners - Find Out How Easy Your First Project IsIf you're a beginner in the world of essay writing, you may feel that you have to start with simple projects or subject matter, to ease you into the challenge. It's a common myth that the more difficult the assignment, the better the writer will be. That is definitely not true. In fact, the opposite is true.Easy projects, even easy assignments, teach you many skills. You get to know that writing is an art and you can improve your skills for better assignments. That's why they are considered a good beginning.Very often, this exercise turns out to be something very different from what you expected. Sometimes, there are little problems when you attempt this first assignment. Some students complain that their papers are too technical, while others complain that they don't understand the concepts behind the paper. A lot of students write simply because they're overwhelmed by the materials and ideas they have to deal with . Before you think of doing research on this topic, take a look at the table below.You should know that writing is not as easy as writing. The first task is to learn how to write a simple assignment and to solve problems that you've encountered when writing. Do you need a better way to organize your thoughts? Have you tried using those proven writing tools?Easy projects do not necessarily mean small projects. It doesn't mean that the project should be a copy-paste of other similar projects. But it must be designed according to your own preferences. For example, a few weeks ago, you had a lot of difficulties trying to write on your own. So you took a break, made some notes and then try to organize your thoughts again.After a while, you realized that you were also having a lot of problems, with your ideas and thoughts. You had no clear idea what to write. You still found it hard to write down those notes but you're getting closer to your own idea and so it's getting easier to write.Ea sy assignments can help you a lot in mastering this skill. Do you want to try to write about everything you can think of, perhaps even more than one idea per day? Then you must learn how to write all those thoughts and ideas, thus you will be able to write a wide variety of essays, all in a short period of time.Do you really think that the assignment was easy because you managed to produce a project, which is 'average' for your ability? Even the best students who start writing essays usually make their first projects very complex and not easy.
Wednesday, June 10, 2020
In this paper we examine the relationship between performance of the Chinese IPO firms and the reputation of investment bankers underwriting their stocks. Similar to previous studies on well-developed stock markets, we find that the initial return on the first day of trading is strongly positive for Chinese IPO stocks due to underpricing. This initial return is negatively related to the underwriters reputation, suggesting that the better the reputation of the underwriter, the less underpricing and hence, the lower the initial return of the IPO stock. Extending the analysis to a ten-day window after the first trading day, we find that the cumulative return becomes negative but that the stocks with more prestigious underwriters experience less decline. We also examine the three-year return of the IPOs. Contrary to previous findings, we find a positive long-run return for the Chinese IPO stocks. This long-run return is positively correlated with underwriter reputation. Finally, we find some evidence of positive long-run operating performance for the IPO firms that employ more prestigious underwriters. 1. Introduction The underpricing of initial public offerings (IPOs) is a well-known phenomenon. Many studies have attempted to offer an explanation for the underpricing of IPOs and their long-term performance (see, for example, Loughran and Ritter, 2002; Ritter and Welch, 2002).A substantial body of research on the initial public offering of common stocks examines the effects of underwriter reputation on the initial and long-run performance of IPOs (see, among others, Logue, 1973; Beatty and Ritter, 1986; Titman and Trueman, 1986; Carter and Manaster, 1990; Maksimovic and Unal, 1993; and Carter et al., 1998). The financial press also provides some evidence of the correlation between IPO performance and underwriter reputation (See Forbes June 20, 1994). However, most previous studies have investigated the markets of developed countries, especially the U.S. stock market. None of them has examined the effects of underwriter reputation on the performance of Chinese IPO stocks. Furthermore, no prior r esearch has documented the relationship between the accounting performance of IPOs and underwriter reputation. Logue (1973) and Beatty and Ritter (1986) are among the first to examine the effect of underwriter reputation. Later studies use different reputation measures to examine the relationship between underwriter reputation and IPO performance. Carter and Manaster (1990, hereafter CM) use underwriters relative placements in stock offering tombstone announcements, Johnson and Miller (1988, hereafter JM) classify underwriters into one of four prestige categories, and Megginson and Weiss (1991, hereafter MW) use the relative market share of underwriters as a proxy for their reputation. Michaely and Shaw (1994) find that IPOs managed by high-prestige investment bankers tend to have smaller initial returns and less negative long-run returns than do IPOs handled by low-prestige underwriters. Brav and Gompers (1996) find that venture-capital-backed IPOs outperform nonventure-backed offerings five years after the offering date. Carter et al. (1998) find that each of the three reputation proxies (C M, JM and MW) is significantly related to the initial returns of IPO stocks. The better the underwriters reputation, the smaller the short-run underpricing and the less severe the long-run underperformance of IPO stocks. Liu and Wu (2002) show that other things being equal, underwriters with better reputations incur a smaller amount of underpricing. They find that underwriter prestige is negatively related to the mean and standard deviation of the initial return of IPO stocks. Although no widely accepted theory has been developed, it is generally believed that IPOs marketed by high-prestige underwriters will experience less severe short-run and long-run underperformance in stock returns and better long-run earnings performance. Chemmanur and Fulghieri (1994) argue that investors count on the investment banks past performance, measured by the quality of IPO firms assisted by them, to assess their credibility. By marketing IPOs with better short-run and long-run performance, investment banks enhance their reputation. Hence, we expect underwriter prestige to be positively related to the short- or long-run market-adjusted returns of IPO stocks. Several papers have investigated the issue of IPO underpricing in China. Mok and Hui (1998) examine the pricing of IPOs in the early years (before 1993) of Chinas stock market development. Su and Fleisher (1999) employ signaling theory to explain the underpricing of IPOs in China. Chan, Wang and Wei (2002) explain the underpricing of IPOs with several institutional variables and investigate short- and long-run stock return and accounting earnings performance relative to different benchmarks. Surprisingly, there are virtually no studies on the effects of underwriter reputation on the IPO performance in the Chinese stock market. In this paper, we examine underwriter reputation and the performance of IPO stocks in the Chinese market. First, we investigate the extent of underpricing, the short-and long-run stock returns following the IPO, and the relationship of these returns to underwriter reputation. Second, we examine the relationship between underwriter reputation and the future accounting performance of IPO firms. A closer examination of Chinas IPO market is warranted for several reasons. First, the institutional and economic environment in China is quite different from most other countries where the effects of underwriters have been investigated extensively. An interesting characteristic of the Chinese IPO market is that the aggregate amount of new shares issued each year is determined by the central government. New issues typically represent a small proportion of the outstanding shares, as the majority of firm shares is owned by the state or other legal entities, and cannot be sold to public investors. Therefore, the management and ownership structure is very different from the IPO firms in other countries. Second, Chinas stock markets have been in smooth operation for only about ten years. Investors are not as knowledgeable and sophisticated as those in well-developed countries. In addition, there is only a nascent institutional investment community in China. Consequently, stock prices are driven by the actions of private investors who typically own very few shares and have done very little investment analysis. These institutional and regulatory differences between China and other countries suggest that the findings from the IPO studies in the U.S. and elsewhere may not directly apply to the Chinese market. For example, underwriter reputation may be more important for the Chinese market because investors are less knowledgeable and have less information on the new stock issues. Thus, Chinese investors may be more willing to accept less underpricing (premium) when stocks are underw ritten by investment bankers with better reputation. Moreover, Chinese IPO market is not well developed. To ensure a successful underwriting, firms have a greater incentive to seek underwriters with good reputation. On the other hand, most of Chinese investment banks are established by central government offices or state-owned firms. Also, the majority of firm shares is owned by the state or other legal entities. Consequently, political relationship may play a very important role in the underwriter selection.For these reasons, underwriter reputation may have different impacts on IPOs in China than in other markets. The remainder of the paper is organized as follows. Section 2 discusses the characteristics of the Chinese IPO market and review prior research on this market. Section 3 discusses data and empirical methodology while Section 4 presents empirical results. Finally, Section 5 concludes the paper. 2. Chinese IPO markets In 1978, China initiated various reforms to restructure its economy towards a socialist-market economy. An important step for this movement was privatizing state-owned enterprises (SOEs) by issuing shares to the public via IPOs. Although the first privatization took place in 1984, subsequent IPO activity was quite modest. In all, there were only 44 IPO issues between 1984 and 1990. The low popularity of IPOs was due in large part to the fact that there were no organized stock exchanges to trade shares. Recognizing the lack of market liquidity, the state established two new stock exchanges in Shanghai and Shenzhen in December 1990 and July 1991, respectively. Before the establishment of these two stock exchanges, the underwriting industry effectively did not exist. With the rapid growth in the stock market, this new industry began to develop quickly. According to a report of The Peoples Bank of China (the central bank of China), by year 2001 there are 177 investment banks authorized to underwrite the IPOs. The total asset of the 177 investment banks is 550 billion RMB, and their total liability is 478 billion. All investment banks are established by some government departments or large state owned firms. Thus, the state has a large control power on these investment banks. The initial public offering process is quite similar with that of the U.S. except that there are more regulations and more tedious application process. A substantial proportion of the initial public offerings is linked to the privatization of state-owned firms. The Chinese government introduced five major categories of shares: (1) state shares, which are held by the State Assets Management Bureau (SAMB); (2) institutional shares held by other state-owned enterprises; (3) employee shares held by managers and employees; (4) ordinary domestic shares (or A-shares), which can be purchased only by Chinese citizens on the Shanghai or Shenzhen Exchange; and (5) foreign shares, which can be purchased only by foreign investors in Mainland China (B-shares), through the Hong Kong Stock Exchange (H-shares) or the NYSE (N-shares). Only A-shares and B-shares are traded on the Shanghai and Shenzhen exchanges. The first three types of shares are not tradable in official exchanges, whereas trading of employee shares is allowed some time (typically one year) after the IPO. The stock offering process in China has vestiges of the Chinese transitional economy with socialist planning. The initial public offering process is more complicated from other countries due to heavier regulation. First, the aggregate value of new shares to be issued each year is part of the national investment and credit plan. The new issue quota is determined jointly by the State Council Securities Committee (SCSC), the State Planning Commission (SPC), and the Peoples Bank of China (PBOC), which is the central bank of China. The quota is allocated to provinces as well as to municipalities. The criteria used for allocation among provinces include the assessment of regional industrial structures, and the need for balanced regional development. Given each regional quota, local securities authorities invite enterprises to request a listing and then make a selection based on the issuing firm performance and regional development objectives. This process of selecting enterprises for listi ng in China differs considerably from other countries, where the decision to list a stock is usually determined by the stock exchange. The selected firms then submit their application for initial public offering to China Securities Regulatory Commission (CSRC). In their application, firms must provide the details about the offering such as when and where the shares will be offered, offering price, the number of shares to be offered, underwriter and the type of underwriting, etc. Once a firm is admitted to issue new shares through an IPO, it will select an underwriting syndicate to issue its shares. In China, most investment bankers issue IPO stocks under a firm commitment. In order to protect the domestic investment banking industry, foreign investment banks are not allowed to underwrite A-shares. Thus, all A-share IPOs issues are underwritten by domestic investment banks mostly owned by the state. Foreign investment banks can only underwrite B, H, N and other foreign shares. Based on the report of China Securities Regulatory Commission (CSRC), there are only 48 foreign underwriters by 2001 authorized to underwrite B, H, N and other foreign shares. These 48 foreign underwriters come from several different places, including the U.S, Japan, Hong Kong, Germany, France and other countries. Foreign underwriters generally have higher reputation in their own country, and but less known in China. In this study, we focus on the underwriting of A shares and the domestic investment banks which underwrite them. There is a body of research that investigates the development of Chinas privatization program and the stock price behavior of listed companies. Corporate earnings typically decline subsequent to listing, a phenomenon in contrast to the findings from studies of other markets. Very high initial returns have been recorded on the first day of IPO listings (e.g., Bailey, 1994; Mok and Hui, 1998; Chen et al., 1999; Chan, Wang, and Wei, 2002), but long-term stock returns and earnings performance are mixed. Mok and Hui (1998) find that positive returns have been achieved a year after listing, while Chan, Wang, and Wei (2002) find that the IPOs underperform the matched non-IPO stocks three years after listing, whether from the view point of stock returns or the earnings performance. These studies focus on the return and earnings performance of IPO stocks. None of them has examined the effect of underwriter reputation on the performance of Chinese IPOs. 3. Data and empirical methodology Our stock return and accounting data are retrieved from the Taiwan Economic Journal (TEJ) database. Information concerning the particulars of each offering, including the number of shares offered by the firm, the underwriters involved, and the offering price have been obtained from CSRC, SHSE and SZSE. All IPOs made from 1990 to 2001 with required data are included in the sample. As mentioned earlier, although the first privatization case took place in 1984, subsequent IPO activity was quite modest, with only 44 issues between 1984 and 1990. Since there werent any official stock exchanges during this period, we have excluded these IPO issues from this study. The sample selection process is summarized in Table I. The final sample includes 944 IPOs issued from 1990 to 2001. Several proxies for underwriter reputation have been employed in previous studies. In this paper, we use the underwriter reputation measures as defined by Carter and Manaster (1990, CM) and Megginson and Weiss (1991, MW). Specifically, we use the number of IPOs underwritten and the relative market share of an investment banker in stock offerings as a proxy for underwriter reputation. We use underwriters relative placements in stock offering tombstone announcements to obtain the CM measure. First, we count how many IPOs that each investment bank has underwritten, and rank the underwriters by this number. We use 50% and 80% to divide the whole underwriters into three groups: low, median and high reputations. The MW measure is constructed using the same process used to obtain CM measure, except that we use the total market value as a criterion to separate the whole underwriters into three groups. We define three levels of underwriter prestige based on the ranking of each reputation prox y, with a score of three representing the most prestigious level and one representing the least prestigious level. To evaluate the aftermarket performance of IPOs, we calculate returns for three periods: (1) the initial return period from the offering date to the first public trading date; (2) the short-term aftermarket period which covers a ten-day period after the IPO, exclusive of the first day of trading; (3) the long-term aftermarket period, which covers a three-year horizon after the IPO, exclusive of the first day of trading. The initial period vary somewhat by IPO issues. Panel B of Table 1 reports the summary statistics of the initial period. We compute the initial return as the percentage difference between the closing price of the first trading date and the offer price: (1) where is the initial return of stock j on the first trading day (day 0), is the closing price of stock j on day 0, and is the offering price of stock j. We also adjust the return for the market effect: (2) where is the market-adjusted return of an IPO stock on day 0, is the closing value of the corresponding A-share market index on the first trading day of the new issue j, is the closing value of the corresponding A-share market index on the day the new issue j is offered. The mean-adjusted initial return is: (3) where N denotes the number of companies in an IPO portfolio. The short- or long-run aftermarket performance is computed based on the buy-and-hold strategy. In order to test the effect of underwriter reputation on short-run returns, we calculate the return over a ten-day horizon after the first trading day, since underwriters usually stabilize the stock price in this period due to their firm commitment to price support. The buy-and-hold return for firm j (Rj) over a ten-day horizon is (4) where represents the return of firm js stock on day t. The initial return on the first trading day is not included in the above calculation. The market-adjusted ten-day return can be computed as: (5) where represents the return of the corresponding A-share market index on day t. The mean market-adjusted return over the ten-day horizon is (6) We next calculate the return for the each of the 36 months following the first day of stock trading. Following Ritter (1991), we assume there are 21 trading days in one month, instead of using a calendar month. Therefore, the first month consists of the first 21 trading days after the first trading day (denoted as day 0), the second month consists of day 22 through day 42, and so on. The long-run aftermarket cumulative return till month T (= 36) for firm j (CRjT) is computed as: (7) where represents the return of firm js stock on day t. Again, the return on the first trading day is not included. The market-adjusted return can be computed as: (8) where represents the return of the corresponding A-share market index on day t. Similarly, the mean market-adjusted cumulative return till month T is computed as follows: (9) Ritter (1991) and Loughran and Ritter (1995) compare the aftermarket return of an IPO portfolio with the returns of non-IPO matching firms (matched by Size, B/M and Size-B/M). Since a relatively high percentage of listed firms in our sample period are IPOs, it is not feasible to construct a meaningful non-IPO matching sample. Instead, we use the buy-and-hold return on the market portfolio as our benchmark return. We examine the explanatory power of the underwriter reputation measures by least squares regressions. Previous studies suggest that underwriter reputation signals the underlying risk of the offering, impounded in the initial return. We segment our sample by underwriter reputation and report the corresponding initial returns, short- and long-run performance for each segment. We use the market-adjusted initial return, short-run return and long-run return as the dependent variables in the regression, and the underwriter reputation measures (CM or MW) as the independent variable. The coefficient for each reputation measure should be negative in the initial return regression. In contrast, for short- and long-run aftermarket return, the coefficient for each reputation measure should be positive if the reputation of investment bankers indeed signals the quality of IPO firms. To assess the marginal impact of underwriter reputation, we control the effects of other IPO characteristics. The first variable is the gross proceeds of the IPO (Size), which is used to control any systematic influence due to the size of the offering. Since larger IPOs are often issued by well-established firms, the risk is expected to be lower and therefore, the initial return is expected to be smaller because these IPO stocks are less underpriced. In contrast, the short- and long-run returns are expected to be larger for these firms because they are more profitable. Based on this argument, the coefficient of size (Size) for the initial return is expected to be negative, while it should be positive for short- and long-run returns. The second variable is the issuing price (Issp). The higher the issuing (offering) price, the lower the initial IPO return. Thus, we expect a negative relationship between the initial IPO return and Issp. The third variable is the lottery ratio (Proba), w hich reflects outside investors demand for new shares. The greater the underpricing of the IPO, the stronger outside investors demand (see Hanley, 1993). This implies a negative relationship between the initial return and Proba. The return regression model can be written as (10) We also estimate this regression model using the market-adjusted ten-day return (AR) and long-run return (ACR) as dependent variables. In the investment banking industry, underwriters with better reputations tend to be more likely to survive market competition. Good underwriters will do their best to price IPOs at the intrinsic values of the firms to prevent losing their reputation and their clients. Also, they tend to market the stocks of high-quality firms. Thus, we expect that the IPOs handled by underwriters with better reputations will have better operating and earnings performance before and after their issuance date. 4. Empirical Results A. Initial IPO returns and Underwriter Reputation Proxies We calculate market-adjusted initial returns of the first trading day for three IPO portfolios, which are formed based on the level of underwriter reputation (either CM or MW measure). Table II provides summary statistics of the initial returns, Size, Issp and Proba. The results in Table II are consistent with the findings of the studies of U.S. and other developed markets. For example, more prestigious investment bankers tend to market the stocks of larger firms with a higher issuance price. As a result, the market-adjusted initial return is negatively related to underwriter reputation. The mean adjusted initial return declines monotonically from 468.44% (466.11%) to 161.18% (159.87%) as the level of underwriter reputation, based on either the CM or MW measure, increases (from a scale of one to three). The standard deviation of the market-adjusted initial return also declines monotonically with the level of underwriter prestige. We also calculate the mean issuance price for each por tfolio. Consistent with these findings, the mean issuance price of the IPOs increases from 6.09 (6.64) to 9.84 (9.84) as underwriter prestige increases from low to high. Panels A and B show that the differences among the returns of the three reputation groups are very large and significant at the 1% level. For example, the difference in the initial returns (market adjusted) between the low and high prestige groups is 307.26% (307.26%) and significant at the 1% level based on the CM measure. Similar results are found for the groups ranked by the MW measure. The results of regressions on the market-adjusted initial return are presented in Table III. The variables of primary interest are the CM and MW underwriter prestige measures. We first estimate the univariate regressions against each reputation measure and control variable, and then estimate the multivariate regressions by including all variables. As expected, the coefficients for CM and MW are all negative and significant at the 1% level for both univariate (rows 1 and 2) and multivariate regressions (rows 6 and 7). Carter et al. (1998) find that the CM measure outperforms the MW measure in explaining the IPO return. In contrast, we find that the performance of these two measures (CM and MW) is quite similar. In addition, the coefficient for each control variable is as expected. The coefficients of control variables are all negative and significant at least at the 5% level. B. Short-Run Performance and Underwriter Reputation When the demand is weak after listing, the lead underwriter will stabilize the stock price through various activities aimed at reducing the selling pressure. Chan, Wang and Wei (2002) show that in the short run the IPOs underperform several market benchmarks. However, they have not examined the relationship between the stock performance of IPOs and underwriter reputation. Table IV presents the cumulative returns and cumulative market-adjusted returns for the IPO portfolios underwritten by investment banks of varying prestige. Panels A and B report these results based on CM and MW reputation proxies, respectively. As shown, all six IPO portfolios underperform the market over the ten-day horizon immediately after the first trading day. This result is consistent with the finding of Chan, Wang and Wei (2002). Our primary interest here is the relative performance of these portfolios. For either reputation proxy (CM or MW), the cumulative return of portfolio 1 is lower than that of portfolio 3 over the ten-day horizon. Based on the CM reputation proxy, the cumulative market-adjusted return is -5.20% for the portfolio with the worst underwriters while it is -2.56% for the portfolio with the best underwriters. Similar results are found for the portfolios based on the MW reputation proxy in Panel B. For example, the difference between the low and high prestige groups is 2.90%, which is significant at the 5% percent level. Table V presents the regression results of the ten-day IPO returns. The coefficients of the reputation proxies are all positive with the MW coefficients significant at the 5% level. Results show that the MW measures have a slightly higher explanatory power than the CM measure. On the other hand, none of the control variables (Size, Issp and Proba) is significant. This result shows that underwriter reputation significantly affects the short-run performance of the IPOs. It is consistent with the contention that underwriters support the stock price during the first several trading days and that underwriters with better reputations make a stronger effort to support the aftermarket price. Note that while the coefficient of underwriter reputation is statistically significant, the R2 is low, suggesting that it may not be economically significant. C. Long-Run Performance and Underwriter Reputation Prior studies have documented that IPO stocks underperform comparable non-IPO stocks over a longer horizon (see, for example, Ritter 1991; Loughran and Ritter 1995; Chen, Firth and Kim 2000; and Chan, Wang and Wei 2002). Using the U.S. IPO data from 1979-1991, Carter, Dark and Singh (1998) find that the long-run market-adjusted returns of IPOs tend to increase, or the IPO underperformance is reduced, with underwriter reputation. However, none of these studies has documented the relationship between the long-run performance of IPOs and the reputation of the underwriters in the Chinese market. Table VI presents the long-run cumulative market-adjusted returns of IPO stocks over a three-year horizon after the offering. Again, IPOs are divided into three groups based on the ranks of the CM and MW measures in Panels A and B, respectively. For the CM portfolios, the three-year cumulative return is -20.80% for the group with lowest underwriter reputation. But for the medium and high prestige groups, the cumulative returns are 12.92% and 17.46%, respectively. Similar results are found for the MW portfolios. Thus, long-run market-adjusted returns increase with underwriter reputation. Contrary to the findings of Loughran and Ritter (1995) and Chan, Wang and Wei (2002), the overall long-run market-adjusted return of Chinas IPOs is positive. Investors can earn higher returns by investing in the IPOs underwritten by better underwriters. The differences in the market-adjusted returns between the low and high prestige groups are large and significant at the 1% level. The difference is 38.26% (42.36%) when groups are ranked based on the CM (MW) measure. The results suggest that the quality of underwriters signals the long-run performance of IPOs. Table VII reports the regression results for the long-run market-adjusted returns of IPO stocks. As expected, the coefficients for CM and MW are positive and significant at the 1% level. These results are consistent with those reported in Table VI, and suggest that underwriters with better reputations have a greater ability to distinguish the quality of issuing firms and that they tend to underwrite stocks of high-quality firms to enhance their reputation. However, it should be noted that regressions contain substantial noise in the data as revealed by low R2. D. Operating Performance and Underwriter Reputation The preceding results show that IPO stocks underwritten by investment bankers with better reputations tend to generate better long-term returns. An important question is whether this stock return performance is reflected in firms operating performance. In this section, we examine the long-run operating performance of IPO firms. Table VIII reports changes in the operating performance of IPO firms surrounding the year of issuance. The performance measures include the operating returns on assets (ROA), operating cash flows on total assets (CFOA), sales growth rate (Sale_G), and asset turnover (ATO). It is shown that ROA, CFOA and ATO decline steadily after the issuance, regardless of which event window is viewed. These results are consistent with the findings of Jain and Kini (1994), Mikkelson, Partch, and Shah (1997) and Chan, Wang and Wei (2002) that the issuing firms operating performance deteriorates after the initial public offering. These results may reflect managers attempts to window-dress their accounting statements prior to going public, which leads to pre-IPO performance being over-stated and post-IPO performance being understated. An important issue is whether the operating performance of issuing firms is correlated with underwriter reputation. Table VIII shows that the operating performance of the IPO group with high underwriter prestige is better than that of the group with low prestige no matter which event window is used. The differences in the operating performance between IPO groups with high and low underwriter prestige are often sizable. For example, the mean ROA of the group with high prestige is 13.85% before the firms issue their IPOs, while that of the group with low prestige is only 11.95%. This means that the ROA of the IPO firm group with low prestige is about 15% lower than that the group with high prestige. In general, the difference between the high and low prestige groups is statistically more significant when the MW reputation measure is used. The return on total asset, the operating cash flow to total asset ratio and asset turnover are all significantly higher for the high-prestige IPO gro up. These results reinforce the findings from stock return performance that high-prestige underwriters have a greater ability to discern the quality of IPO firms. Table IX reports the regression results for IPO firms operating performance before and after the issuing year. The dependent variables of the regressions are the operating performance measures reported in Table VIII whereas the independent variables are CM and MW reputation proxies. The overall results show that operating performance of IPO firms is positively related to underwriter reputation. However, this relationship is not as strong as that exhibited in stock returns. The t statistics are significant at the five percent level for the asset turnover, suggesting that the firm group with better underwriter reputation typically has higher sales before the initial public offering. Other regressions also show positive relations between operating performance measures and underwriter reputation but they are not statistically significant. Thus, although there are indications that firms future performance is positively correlated with underwriter reputation, this positive relationship is weaker than that exhibited by aftermarket stock returns. 5. Conclusion In this paper we examine the relationship between performance of Chinese IPO firms and the reputation of investment bankers underwriting their stocks. Similar to the findings for other markets, we find that the initial return on the first day of trading is strongly positive for Chinese IPO stocks. This strong positive return reflects the IPO underpricing phenomenon well documented in the literature. More importantly, we find that the first-day return is negatively related with the underwriters reputation. Thus, the better the reputation of the underwriter, the smaller the amount of underpricing and hence the lower the initial return of the IPO stock. When we extend our analysis to a ten-day window, we find that the cumulative returns are negative shortly after the first trading day. However, this decline is less severe for the stocks with high-prestige underwriters. The results show that the stocks underwritten by investment bankers with better reputations tend to be more stable in the aftermarket. This implies that better underwriters make a greater effort to stabilize the market after the stock is publicly traded. As we further increase the event horizon to three years, we find several interesting results. The long-run return of Chinese IPO stocks show an overall positive return in the three-year period. This finding contrasts sharply with empirical evidence of overwhelming long-run negative IPO returns for the well-developed markets documented in the literature. The regression results show a striking positive relationship between the long-run returns of IPO stocks and underwriter reputation. Results suggest that either investment bankers with better reputations have a greater ability to discern the quality of issuing firms or quality firms will seek out high-prestige underwriters. At any rate, underwriter reputation signals firm quality. Moreover, there is evidence that the operating performance in terms of various accounting measures is better before and after the stock is publicly traded for those firms hiring underwriters with better reputations. Overall, the results support the contention that IPO returns are positively correlated with underwriter reputation and better investment bankers have a greater ability to predict future profitability of issuing firms.