Agro Based Industries

Agro-based industry would mean any activity involved in cultivation, under controlled conditions of agricultural and horticultural crops, including floriculture and cultivation of vegetables and post-harvest operation on all fruits and vegetables. The development of agro-industries has assumed crucial importance in the economic planning and progress of the country. There are extreme variations among different states in the number of processed food industries.It is also evident from this study that except potatoes, all the other perishable products have been showing inadequate number of cold storage plants and low capacity utilization of the existing units. This study suggests that there is a need to develop the processed food industries throughout the country in order to provide more employment opportunities and to reduce the regional imbalances.The main focus of Agro based industries is: Livestock farming – Livestock are domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. Crops- Cultivation of crops. Aquaculture – The cultivation of aquatic animals or plants for food. Livestock farming is a type of farming with living animals.Livestock farming consists of Poultry farming where birds are grown for eggs and its meat, Dairy farming where milk giving cattle are grown for dairy products, apiculture where bees are grown for its honey, and cattle farming where cattle is grown for meat. Aquaculture can also be considered as a type of livestock farming dealing with water-living animals and plants. Crops, as you know are useful plants that are needed by humans. Crops consist of Food crops, beverage crops, fiber crops and fodder crops. Food crops are crops that grow food.

Frito-lay and Snack Foods

In 1898, Caleb Bradham bought the patent rights (quy?n sang ch?) for Pepcola brand name va renamed Pepsicola. Sales increased sharply in America and expended to other continents. From here, Pepsico became multinational food and beverage corporation in United States with many famous brands of snack foods, beverages and other products. Beside the popularity of Pepsico brand on beverage, snack foods are also pay an important role in increasing annual retail sales on the world for Pepsi Group. Specifically, food and snack sales in North and South America combined contributed 48 percent of PepsiCo's net revenue in 2009.And Fristo-Lays North America, which is combined with the Frito Company and the H. W. Lay Company, creates the top selling line of snack foods in the U. S, Canada and Mexico. These brands include Lay's and Ruffles potato chips, Doritos tortilla chips, Tostitos tortilla chips and dips, Cheetos cheese flavored snacks, Fritos corn chips, Rold Gold pretzels, Sun Chips and Crack er Jack popcorn. In which, PepsiCo holds six slots in the top 10 global snack brands. The top three brand positions are Lay’s (7%), Doritos (3. 6%) and Cheetos (2. 7%).Ruffles, Tostitos and Walkers also feature in the global top 10. It cannot denied that PepsiCo is a king in competitive snack industry, and fighting for a higher place is a huge challenge for other snack makers, but not impossible. Pringles, ranked 4 (2. 3%) of the Top 10 snack global brand share 2013 based on retail value, is one of the most popularity snack brand of Procter & Gamble Co. The brand commands an 11% share of extruded snacks total retail value. Its main markets are Western Europe and North America, which account for a combined share of 50% of its sales at a global level.It proved that Procter & Gamble Co is a large competitor in snacks global market. Kraft Foods is also a remarkable representative in this race. Although Planters, a division of Kraft Foods on snacks food, was just formed in 2000, a chieved many successes with the main strength is nuts. Today Planters is available in an infinite variety of product lines ranging from Nuts & Seeds, to Mixes, Peanut Butter, Bars, and Nuts for Baking & Cooking, all available with Kraft’s â€Å"Naturally Remarkable† taste and quality guarantee.In general, any successful worldwide snack brand has tapped into the opportunities in these areas, and manufacturers looking to grain traction on the global scale should take heed and invest in flavor, format and occasion innovation as well as leveraging into adjacent categories. Besides, it is also important for snack makers to establish brands firmly. Pack imaging is particularly important and a very powerful marketing tool to build up brand equity.

My Car

When I look at my car all I can think about is the future for it and how glorious it will look when I am finished. I drive a carbon steel grey 2013 Volkswagen GET and I love it. Currently I only have a couple of modifications done to it but I have a list of plans for the future, for when I get the money. On my list of modifications, current and future, I can divide the modifications into three main categories; engine power, cosmetic appearance, and handling.Some of the modifications may be in for than one category but all of the modifications lead to my car looking, sounding, and feeling tremendous. Engine power was the first thing I started to work on when I first got my car. First I went too tuning shop and had Leo, the owner of the shop, install an PAR stage 1 refresh which took the car from pH to about pH. That modification really woke the car up making it a little faster and a lot more fun to drive.The next power modification I did was a cat-back exhaust which claimed to give th e car 15 ore horse power but I did not feel any difference. The cat-back exhaust only made the car louder and gave the car a more aggressive look from the back. After the cat- back exhaust I installed an air intake which make the car more fuel efficient, gave it about 5 extra horsepower, and allowed the car to have an awesome blow off sound. The final power modification I have done so far was putting on a three inch downside and a stages refresh which took the car from about pH to about pH.My power edification I hope to get in the future are an intake manifold, larger fuel injectors, Audit re coil packs, a key turbo kit from PAR, and a larger intercooler. For cosmetic appearance I have not done too many things yet but the things I have done made the car look much better and gave it a little bit of my own personal style. The first thing I did for appearance was changing my head light and for light to HID light, this made the car look much more aggressive and gave me better visibility in the night.The next wing I did was tint the windows, I made them very dark in the back I believe it was a 5% tint. After that I painted my grill strips teal and added four teal stickers around the car. Two stickers are on the rear window and the other two are on my rear side windows. For cosmetic appearance that is all I have been able to do so far but I do plan to eventually get new headlights, new taillights, larger wheels, and the lower the car on coil oversee. Handling is the category where I have done very little to affect it.I eave only done two things to affect handling and those two things are lowering springs and new tires. The lowering spring affect handling because they lower the car center of gravity making the car not lean so much in the corners. The tires help handling by allowing the car to get more traction so it does not slide around as much and because the car have more traction it can take corners at a faster speed. I plan to eventually get coil oversee, strong er sway bars, and new wheels. All of those items will help the car handle much better.Looking at my car now makes me think of all the hard work I have put into it and how I look forward to doing a lot more work on it. Out of engine performance, cosmetic appearance, and handling I have done the most work on engine performance and the least work on improving handling. I hope in the next coming year I can save up enough money to do all of modifications I would like to do on my car and when I am finally finished my car will look, sound, and feel amazing. But, as every car person knows, a project car is never finished.

Community Acquired Methicillin-resistant Staphylococcus Aureus Article

Community Acquired Methicillin-resistant Staphylococcus Aureus - Article Example As the research stresses the etiology of CA-MRSA infections includes presentation of small series of soft tissue infections, pneumonia or bacteremia in both adult and pediatric patients. Strains of CA-MRSA produces symptoms that range from subtle to life threatening. The most common lesions were abscesses and cellulitis which presented as single lesions involving extremities. Patients with abscesses may have no fever or leukocytosis. Abscesses are mostly accompanied by central necrosis and surrounding cellulitis. Multiple boils are usually characteristics and occur in outbreaks but is a less frequent presentation of CA--MRSA. In addition, scalded skin syndrome and impendigo are usually uncommon. Myositis and pyositis are also rare infections that involve pelvis or lower extremities. Some patients may also have associated bacteremia and septic shock. According to the report there is an increasing rate of drug resistant Staphylococcus aureus that has led to study of potential medicinal herbs for treatment. Some plants extracts have antimicrobial activity and can be great significance in therapeutic treatment. Strains of Staphylococcus aureus were vulnerable to extracts of Punica granatum and Tabebuia avellanedae, which are Brazillian traditional medicinal herbs. Two naphthoquinones isolated from T. avellanedae and ellagitannins isolated from P. granatum were mixed and they exhibited antibacterial activity against Staphylococcus aureus.

Process-analysis paper Essay Example | Topics and Well Written Essays - 500 words

Process-analysis paper - Essay Example The parts can be small or larger depending on the stylist or individual receiving the hairstyle. oilier. This makes the dreads come untwisted. Braiding, ratting, flat ironing, and using a towel with beeswax can achieve dreads. Sometimes if this does not work, hair extensions can be braided into the hair. Dread hair extensions can also be sewn into shorter hair to make the hair style. Dreads to not have to be created through neglect or not washing the hair. In fact, today dreads need to be cared for more than other hairstyles. Dreads can be washed frequently by pouring shampoo onto the dreads and letting them soak. Then water can be used to rinse out the dreads. Towels will be used to squeeze the water out of each individual dread. This can be done every other day, weekly, or even monthly. It is important to use conditioners on dreads so the hair will not break off. Most individuals chose to go to a professional to have their hair done. The process is done first and then followed up monthly. The monthly treatments are when the dreads are ratted or twisted again. It takes about two hours initially and an hour for the monthly touchups. Another way to protect dreads from untwisting or coming out is to wear a scarf to bed. This helps protect the dreads from tossing and turning at night. A scarf will also allow the dreads to remain twisted longer. It is important that dreads are totally dry before putting a scarf on or going to bed. Dreadlocks are easy to complete at home or at a professional shop. They are no longer the dirty or unkempt hairstyle of the 70’s. All hairstyles can be shaped into dreads. Boys and girls of all colors now wear this popular style. If done right, dreadlocks are a clean and attractive

Graduation for all English Language Learners Assignment

Graduation for all English Language Learners - Assignment Example 1 2 3 4 5 Scale # 3 (Personal Abilities / interest) Question # 6 Do I afford the cost / fee of learning English Language? 1 2 3 4 5 Question # 7 Do I have ability of learning English Language? 1 2 3 4 5 Question # 8 Do I have an interest in learning English Language? 1 2 3 4 5 Scale # 4 (benefits) Question # 9 After learning English Language, would I get good response from the market? 1 2 3 4 5 Question # 10 Would the English Language help / facilitate me to boost my professional career? 1 2 3 4 5 Introduction Peer Reviews; mean the evaluation of a work through diverse ways that ultimately gives confidence to the students / authors to look at their own writing as a work in progress. During the process of peer review, each of the students (peer reviewers) has an equal chance to criticize the work of their fellow student. The initial part of the document identified a construct and defined it using Peer Review articles / books on promoting English Language to all students till graduatio n. The developed construct contains basically four (4) types of questions which need to be answered to build up a trend for promoting English Language learning. ... The first (1st) scale contains two (2) items, whereas, each item has been rated five (5) points Likert scale. The two (2) questions on this scale have been developed to know whether the candidate has been facilitated to take admission in graduation of English Language. The second (2nd) scale contains three (3) questions and the answer of the each question would be rated five (5) points Likert scale. This scale has been developed to identify the efforts made by the English Language learning candidate for knowing the importance of the subject. Moreover, the questions identify the efforts of the instructors for attracting students to learn English Language. The third (3rd) scale contains three (3) items and each of the items would be rated five (5) points Likert scale. This scale identifies the personal interest as well as the capabilities of the English Language learning candidate to know whether the candidate wants to learn English Language. The forth (4th) scale contains four (4) ite ms; each item would be rated five (5) points Likert scale. The questions in the scale facilitate to recognize the future scope of the English Language learners; this scale would be utilized to motivate the candidates to learn English Language (Timberlake, 2009). Method of scaling These assessments use a summative scale to obtain a total assessment score to identify the level of the content. A five (5) step Likert scale has been utilized with the ratings include: ‘Strongly disagree’, ‘Disagree’, ‘Neither Agree or Disagree’, ‘Agree’ and ‘Strongly Agree’. The scoring for the above given ratings which have been utilized in the document include from one (1) to five (5),

African american politic of social change Essay

African american politic of social change - Essay Example These factors include race and ethnicity, religion, gender, sexuality, class, age, migration status and disability or ability. Put simply, any inequality is never the product of a single, isolated factor. Rather it is the result of the intersections of various social factors, experiences, and power relations. This paper analyzes how two figures, namely Ida B. Wells and Amy Marcus, understood and utilized intersectionality as a lens through which to analyze events and as a political tool in the pursuit of the broader goals of their respective movements. The analysis is undertaken in the historical settings of their efforts. In addition, their specific events, writings, and actions are assessed as a way of conducting the analysis. Ida Bell Wells was an African-American woman who lived between July 1862and March 1931. In their career life, Wells worked as a journalist, a newspaper editor, a suffragist, a sociologist and as an initial leader in the civil rights movement. As a journalist, Wells documented the lynching of blacks in the United States (Bressey 1). They demonstrated that it was a way of controlling blacks who displayed opposition to whites in any sphere of life. The lynching was usually done on the pretext of rape charges (Logan 50). Being an active leader of the civil rights movement, Wells established many leading womens organizations across the United States. These included the National Association of Colored Women which Wells founded in 1896 and the Women’s Era Club. The latter became the first civic organization for black women. Moreover, Wells co-founded the National Afro-American Council. Wells was endowed with public speaking skills and spoke at several international civil rights even ts. The African-American Civil Rights Movement comprised several social movements across the United States. The goal of the movement was two-fold: first, the movement sought to bring to and end

Religious ideology and the power of the state in African past Essay

Religious ideology and the power of the state in African past - Essay Example mid Caliphate came to existence in 909 AD; the Fatimids ruled following the Berber revolt, and later on, attempted to acquire morocco and Egypt as well from the Mamluks who were in control (Islam in North Africa, N.d, slide 7). The Arab leadership was evident, which subjected people to pay taxes and conversion to Islam, failure to which they would be killed. With time, Arabic became the main language, which displaced other languages, and as a result, by the 14century, Christianity had been reduced to the ration of 1 in 10 Egyptians. Islam also spread among the Berber community, mainly through army membership; the Berber captives were converted to Islam once recruited to the army (Islam in North Africa, N.d, slide 12). Despite the Berbers’ resistance, when the Muslim army conquered Morocco and Algeria, the Berbers had to convert to Islam. Arabs had succeeded in conquering the Berber territories, forcing the Berbers to be slaves. This Arab rule introduced multi–cropping, aimed at increasing the state revenue. However, the severe famine of 1062-73 influenced the decline of Fatimid rule, which was overthrown later on by the Mamluk troops, and thereafter, Mamluks took over leadership in Egypt. It is rather evident that the Arab leadership influenced the spread of Islam all over North Africa. The Ptolemaic rule existed between 332-30BC; Ptolemaists succeeded Alexander the great. They focused on advancing Egypt, with port of Alexandria being their main achievement. As a result, Alexandria became the biggest city in Egypt, therefore attracting many people from different races (Greek conquest, N.d, slide 3). The Ptolemaists aimed at expanding trade from Europe to red sea and Indian Ocean, with the Greeks introducing camels. Aksum was one of the regions involved in trade; it was ruled by king Zoscales who was of Greek origin. In 146 BC, Rome had conquered Carthage, creating a new province, Ifrikiya. As a result, Rome exploited the agriculture sector in North Africa,

International finance and management Essay Example | Topics and Well Written Essays - 1500 words

International finance and management - Essay Example hods for managing the said exposures are forward contracts, money market contract, currency options, currency swaps, leading and lagging and choice of currency invoice. Lastly, a brief illustration on how to use the money market and forward contract is provided. Medco Ltd is a pharmaceutical company based in the U.K. the company deals in exports and imports of medicines throughout Europe. The nature of the company’s transaction presents a risk as a result of the fluctuation of the foreign exchange rates. The company is planning to invoice a customer in France for 500,000 euros, payable in six months. The company’s managing directors seek advice on whether to implement money market or forward contract hedging strategy. This essay presents the risks in relation to the changes in exchange rate, the causes and factors affecting foreign exchange rate risks, methods of dealing with the forex risks and a mathematical illustration to help the company’s managing directors decided between the two hedging strategies (money market and forward contract). Foreign exchange is a market concept that means, converting currency of one country into that of another. Therefore, foreign exchange market is the market that hosts the currency conversion process (Baxter & Stockman 1989). The process of currency conversion depends on exchange rates. An exchange rate is the cost charged for converting the value of a country’s currency into the value of another. A spot exchange rate is the rate used in an instant currency conversion agreement between two or more parties (Dornbusch 1976). Spot exchange is carried out in a spot exchange market, which is part of the foreign exchange market. On the other hand, forward exchange rate is the rate agreed on today, to convert currencies at a future date specified in the agreement (Weithers 2011). The fluctuating exchange rate could present an unfavorable situation to a company if the local currency is rendered less valuable, (increased

Journal reflective Essay Example | Topics and Well Written Essays - 1000 words

Journal reflective - Essay Example Conceptually, these two aspects have brought a revolutionary paradigm in marketing that mainly focuses on having and taking care of the customers rather than merely attracting them. Notably, though, is the importance of these two elements in business today with respect to the customers and the progress of the organization in context. Delineating from their generality, value concept, and relationship marketing have several other constituents tied to them. Besides, myriad theories combine to link, separate and contextualize the value concept and relationship marketing to the prevailing business environment. Within the value concept, for instance, is the customer-perceived value, mathematically defined as the perceived benefits divided by the perceived sacrifice.3 The sacrifices, in this case, are the costs the customer has to incur during purchase such as purchase price and installation costs among others. To sum up about the value concept, it is very critical for any company aiming to launch competitive values to the clients to carefully analyze and understand the needs of the clients.4 It is the riskiest part of the value concept since the lack of such understanding may dilute customer loyalty. It may be a total waste of resources, and cause a ripple effect of not meeting the objectives of the company. In genera l, the value concept is directly proportional to relationship marketing.5 Arguably, reading this article is not only important to anyone aiming to start a business, but also to the established companies. Clearly, the impact of such reflection on professional learning and professional marketing skills cannot be overemphasized. As already asserted above, the reflection has a direct relationship with both professional learning and the real business environment. For one, it is through the reflection that a learner

Himalayan Tourism in Nepal Essay Example for Free

Himalayan Tourism in Nepal Essay

Hemingway’s fiction is not his suicide note Essay Example for Free

Hemingway’s fiction is not his suicide note Essay Earnest Hemingway, the literary genius of the late 1800s produced volumes upon volumes of both poetry and fiction. After a short and very fruitful life Hemingway committed suicide but failed to succeed in initial attempts. Later, he finally succumbed to the great equalizer – death. Some people have surmised that Hemingway left clues to his unlikely demise in his fiction, however, â€Å"suicide cut the strings before they were painfully drawn out; Hemingway attempted to suck life dry of anything and everything he could fathom† (Gunsberg, 1995) This basically means that Hemingway believed that it was necessary to experience everything, even death, to enrich his art and craft. Although Hemingway committed suicide, and although many of his work focuses on death and suicide, it would be grossly unfair to conclude that he foretold his suicide in his fiction because this would be underestimating the power of the writer and his genius. A brilliant writer like Hemingway used his fiction as a form of exploration of the human condition and not as a reflection of his own condition. It would be very presumptuous to suppose that Hemingway used his fiction to foretell his suicide as many writers and literaturists would agree that although literature is a means of exposing internal emotions, it is also a means of release; hence, Hemingway’s fiction is more of an illustration of his literary genius than they are, as most would suppose, cries of help of a man in pain. Therefore, Hemingway’s fiction could not be considered his suicide notes. For instance, in the story ‘Indian Camp’ (Hemingway), the author does narrate an instance where the Indian Father commits suicide, (Hemingway) but this is simply used as a platform for the issue of emancipation from pain as illustrated by the contrasting incident of the Indian Mother who is professionally attended to by Dr. Adams who stops her pain and successfully delivers her baby. (Hemingway) In this particular story, it is not so much the suicide that is the issue but the prospect of hope and new beginnings that takes center stage. Another story where suicide is tackled is ‘A Clean and Well Lighted Place’ (Hemingway) where Hemingway portrays the pain of old age suffered by a deaf old man (Hemingway). In this particular story, there is an incident where the old man attempts to commit suicide by hanging himself, but the noose is cut by his niece and foils his attempt. (Hemingway) The story, albeit tackling suicide in one of its details does not necessary give much value to this issue, it even illustrates how one cannot escape the pains that accompanies life; that not even death can release us humans from what we have to deal with in life. So, if carefully considered, this particular story does not actually vindicate Hemingway’s own suicide, in fact it even serves to sissify his own attempt by indirectly implying that if the author believed that suicide was not a means of ending the suffering of existence as shown in his fiction, then he would have been a great coward to commit what he was writing against. Hemingway did not use his stories as a platform for the justification of his own suicide; he had his own reason’s for his suicide, and those reasons are not in any way connected to his stories. Finally, in ‘Hills like White Elephants’ (Hemingway) the author tackles the issue of abortion with a couple arguing over whether to have it (the baby) or not; the man insisting of having an abortion and the woman, subtlely indicating that she would like to have the baby. (Hemingway) Although there is no reference to suicide in this particular Hemingway story, what is obvious is the argument between two people regarding the issue of ending a life, which, by the way, is not really an argument that you would normally hear from ordinary chat. In this story, Hemingway, again, although, very discreetly, makes references to why life should be valued and why it should be considered with utmost respect, even going to the extent of contrasting childbirth with happiness. (Hemingway) Easily, from this story it is immediately evident that the author was against any form of taking away life intentionally, and so totally debunks the assumption that his fiction was an indirect indication of his consequent suicide. If such is the case, then it can be easily concluded that Hemingway committed suicide for a higher reason; this being related to the progress of his art and craft. Like many other writers who had grappled with the peculiarities of life, Hemingway was no different; and like many other creative writers then and now, it has to be considered that art, in any form, is already a means of airing out recluse emotions; it is a release that is even perhaps more effective than death itself. Hemingway, like many other artists during his time, had peculiarities of his own, and what most of these writers had in common was the ability to use the human condition as a platform in their work. While many of Hemingway’s stories talked about suicide, it has first to be understood that the author is not necessarily the ‘I’ in any of his/her work, and so it would be terribly unfair to affine subject matters in Hemingway’s stories to his actual existence. The relationship of the author to his story ends with his by-line; all the other things in the written work should be set apart from the author. It is very elementary to assume that the author only writes about his/her own personal life because, then, creativity would not have as big a role in literature as it is supposed to have. What could be more accurate, however, is the fact that the literary genius of Hemingway was enough for people who read his work to assume that he was foretelling his own suicide. While this assumption is blatantly misdirected, it simply shows how a writer is able to twist and distort the minds of his readers to think that there is much more to his fiction than meets the eye (or mind). If such is the case, then every reader might as well apply for a position at the Vatican interpreting the ancient Dead Sea scrolls. Works Cited Gunsberg, Ben. Earnest Hemingway: Would Be King. Earnest Hemingway. 18 Dec. 1995. 16 Apr. 2009 http://www. users. muohio. edu/shermalw/honors_2001_fall/honors_papers_2000/gunsberg. html. Hemingway, Earnest . A Clean, Well-Lighted Place. Earnest Hemingway. 1999. 16 Apr. 2009. Hemingway, Earnest . Hills Like White Elephants. Earnest Hemingway. 1999. 16 Apr. 2009 http://www. moonstar. com/~acpjr/Blackboard/Common/Stories/WhiteElephants. html. Hemingway, Earnest . Indian Camp. Earnest Hemingway. 1999. 16 Apr. 2009 http://amb. cult. bg/american/4/hemingway/camp. htm.

Introduction To Mechatronics System Engineering Essay

Introduction To Mechatronics System Engineering Essay Mechatronics is a word originated in Japan in 1980s to denote the combination of technologies which go together to produce industrial robots. The word, mechatronics ,is composed of mecha from mechanism and the tronics from electronics. In other words, technologies and developed products will be incorporating electronics more and more into mechanism, intimately and organically, and making it impossible to tell where one ends and the other begins. According to the Mechatronics forum, UK a formal definition of Mechatronics is the synergistic integration of Mechanics and Mechanical Engineering, Electronics, Computer technology, and IT to produce or enhance products and systems. W.Bolton defines mechatronics as A mechatronic system is not just a marriage of electrical and mechanical systems and is more than just a control system; it is a complete integration of all of them. A graphical representation of mechatronics,as shown in figure 1, illustrates integrated and inter-disciplinary appro ach of nature. 3.PNG Figure 1 Graphical representation of mechatronics Even though many people believe that the presence of mechanical, electrical, electronic components, and computers make a system mechatronics, others do not feel the same as there is nothing wrong with the individual identity. Hence , the term mechatronics should be used to represent a different meaning , namely ,a design philosophy, where mechanical, electrical, electronic components, and IT should be considered together in the design stage itself to obtain a compact, efficient, and economic product rather than designing the components separetly. A mechatronic engineer must be able to design and select mechanical devices, sensors, and actuators, analogue and digital circuits, microprocessor-based components, and control devices such as logic gates to design modern systems. ELEMENTS OF MECHATRONICS SYSTEM Various elements in typical mechatronic systems are shown and are described here under. Actuators and Sensors Signals and conditioning Digital logic systems Software and Data Acquisition systems Computers and Display devices. Actuators and Sensors: Sensors and actuators mostly come under mechanical systems. The actuators produce motion or cause some action. The sensors detect the state of the system parameters, inputs and outputs. The various actuators used in mechatronic system are pneumatic and hydraulic actuators, electro-mechanical actuators, electrical motors such as D.C motors, A.C motors, stepper motors, servo motors, and piezoelectric actuators. (Onwubolu, 2005) The various type of sensors used in mechatronic system are linear and rotational sensors, acceleration sensors, force, torque, and pressure sensors, flow sensors, temperature sensors, proximity sensors, light sensors. Signals and Conditioning: The mechatronic systems deal with two types of signal and conditioning: input and output. The input devices receive input signals from the mechatronic systems via interfacing devices and sensors, and then send to the control circuits for conditioning or processing. The various input signal conditioning devices used in mechatronic system are discrete circuits, amplifiers, analog-to-digital converters, digital-to-digital converters. The output signals are send to output/display devices through interfacing devices. (Bishop, 2002, pp. 1188-1195) Digital logic systems: Digital logic devices control overall system operation. The various digital logic systems are used in mechatronic system are logic circuits, microcontrollers, programmable logic controllers, sequencing and timing controls, control algorithms. (Onwubolu, 2005) Software And Data acquisition systems Digital logic systems Signals And Conditioning Actuators And Sensors Computers And Display devices Figure 2 Elements of a mechatronics system Software and Data acquisition systems: Data acquisition system acquires the output signals from sensors in the form of voltage, frequency, resistance etc and inputting into the microprocessor or computer. Software is used to control the acquisition of data through DAC board. (Bishop, 2002, pp. 1150-1188) The data acquisition system consists of multiplexer, amplifier, register and control circuitry, DAC board. Computer and Display devices: Computers are used to store large number of data and process further through software. Display devices are used to give visual feedback to the user. (Onwubolu, 2005) The various display devices used in mechatronic system are LEDs, CRT, LCD, digital displays etc. STAGES IN DESIGNING MECHATRONICS SYSTEMS The design process consists of the following stages: Stage1: Need for design The design process begins with a need. Needs are usually arise from dissatisfaction with an existing situation. Needs may come from inputs of operating or service personal or from a customer through sales or marketing representatives. They may be to reduce cost, increase reliability or performance or just change because of public has become bored with the product. (W.Bolton, 2003) Stage2: Analysis of problem Probably the most critical step in a design process is the analysis of the problem i.e., to find out the true nature of the problem. The true problem is not always what it seems to be at first glance. Its importance is often overlooked because this stage requires such a small part of the total time to create the final design. It is advantageous to define the problem as broadly as possible. (W.Bolton, 2003) If the problem is not accurately defined, it will lead to a waste of time on designs and will not fulfil the need. Stage 3: Preparation of specification The design must meet the required performance specifications. Therefore, specification of the requirements needs to be prepared first. This will state the problem definition of special technical terms, any constraints placed on the solution, and the criteria that will be used to evaluate the design. Problem statement includes all the functions required of the design, together with any desirable features. The following are some of the statements about the problem: -Mass and dimensions of design. -Type and range of motion required. -Accuracy of the element. -Input and output requirements of elements. -Interfaces. -Power requirements. -operating environment. -Relevant standards and code of practise, etc. (W.Bolton, 2003) Stage 4: Generation of possible solution This is often known as conceptualisation stage. The conceptualisation step is to determine the elements, mechanisms, materials, process of configuration that in some combination or other result in a design that satisfies the need. This is the key step for employing inventiveness and creativity. (W.Bolton, 2003) A vital aspect of this step is synthesis. Synthesis is the process of taking elements of the concept and arranging them in the proper order, sized and dimensioned in the proper way. Stage 5: Selection of suitable solution or Evaluation This stage involves a thorough analysis of the design. The evaluation stage involves detailed calculation, often computer calculation of the performance of the design by using an analytical method. (W.Bolton, 2003) The various solutions obtained in stage4 are analysed and the most suitable one is selected. Stage 6: Production of detailed design The detail of selected design has to be worked out. It might have required the extensive simulated service testing of an experimental model or a full size prototype in order to determine the optimum details of design. (W.Bolton, 2003) Stage 7: Production of working drawing The finalised drawing must be properly communicated to the person who is going to manufacture. The communication may be oral presentation or a design report. Detailed engineering drawings of each component and the assembly of the machine with complete specification for the manufacturing process are written in the design report. (W.Bolton, 2003) Stage 8: Implementation of design The components as per the drawings are manufactured and assembled as a whole system. OBJECTIVE: A coffee dispensing machine has to design using Mechatronic design methodology. The machine is to be used in the university campus. The machine should offer the coffee of user choice like latte, cappuccino, black and expresso. The machine use real coffee beans and milk for this process. The machine should identify the cup size for the particular choice and has to detect and intimate the missing and the wrong size of cup to the user. CONCEPTUAL DESIGN: A vital aspect of this stage is synthesis. Synthesis is the process of taking elements of the concept and arranging them in the proper order, sized and dimensioned in the proper way. Outline solutions are prepared for various possible models which are worked out in sufficient details to indicate the means of obtaining each of required functions. This is the structure of creating high-level for the system. USER REQUIREMENTS: The machine is to be used on a university campus. The machine will: Offer the user choice of ingredients e.g. with or without sugar and should offer the choice of latte, cappuccino, black and expresso. The machine will use real coffee beans and milk. Use two sizes of paper cups- large for latte and cappuccino and small for expresso. Cups will be put in position by the customer. Missing or wrong size cup has to be detected. The machine should accept only  £2,  £1, 50 pence coins and the cost of coffee will be  £1.50p. Change should be given automatically. The cost of machine should me not more than  £2000. The time to display coin is less than 2 seconds and time to make coffee is maximum 30 seconds. The dimension of coffee machine is 0.5 meter* 0.5 meter* 1 meter. Indication for system fault, system needs service and if the coins in the box attains maximum level. Digital display while processing is being carried in each stage to easily understand by the user so that he can communicate easily. It should be designed in such a way that machine should give an output signals when ingredients are empty and allow to refill Ease of maintenance The outer model of the coffee machine is shown below 2.PNG Figure 3- coffee vending machine The designing of coffee machine can be classified as, Automatic coin management system Automatic dispensing of coffee. AUTOMATIC COIN MANAGEMENT SYSTEM: The automatic coin management system should recognize coin, sorting of coin, change dispensing and the control of the associated human-machine interface. To detect the coin, the coin thickness and weight has to be considered. Since the machine will accept only  £2,  £1 and 50 pence the coin has to be detected properly by means of proper detection method. After the detection the coin has to send to their respective bin for storage. If the coin  £2 is inserted then change 50 pence has to be given automatically. In the display, respective value of coin or total value of coin is displayed. In the coin management system, the thickness of the coin, weight of the coin and the diameter of the coin are taken in to consideration. The table below will give detailed description of the following coin. Coins Thickness Weight diameter Image of coin  £2 2.50mm 12.0gram 28.4mm 3.PNG  £1 3.15mm 9.5gram 22.5mm 1983_REV.JPG 50p 1.78mm 8.0gram 27.3mm 50_PENCE_1982.JPG Table 1- coin properties (British coin properties, 2010) The probabilities of inserting coins in the machine are follows:  £1 + 50p 50p+50p+50p  £2 Return 50p 50p+ £2 Return both the coins Fake or counterfeit coins Return the coin The coins are collected in their respective bins. If the bin attains 180 coins the indication has to be made and if the coins in the 50 pence bin have less than 10 coins the indication is made for the operator. The size of  £2 collecting bin should be 50 cm (200*2.5mm=500mm) in height; the sensor is placed in bin at 45cm (180*2.5mm=450mm). The size of  £1 collecting bin is 63cm (200*3.15mm=630mm) in height; the sensor is placed in bin at 56.7cm (180*3.15mm=567mm). The size of 50 pence collecting bin should be 35.6cm (200*1.78mm=356mm) in height; this bin has two sensors to indicate maximum and minimum number of coins, maximum level sensor is placed at 32cm (180*1.78mm=320mm) and minimum level sensor is placed at 1.78cm (10*1.78mm=17.8mm). Consider if the machine has to accept  £2 coin means, first the coin is to be inserted, and then the sensor S1 senses the coin and activates the thickness and weight detector. If the detector detects  £2 coin means the solenoid V1 and V2 are not energised but the solenoid V3 is energised which make the pivotable gate G3 to point towards the  £2 bin. Then the solenoid valve in the 50 pence bin energised to return the change. The schematic representation of coin management is shown in figure 4. INSERT COIN aaaaase 50 pence bin 1 pound bin aaaaaa S1 Thickness detector Weight detector G1 V1 G2 V2 G3 2 pound bin S2 V3 S3 RETURN COIN Figure 4- schematic representation of coin management AUTOMATIC DISPENSING OF COFFEE: The automatic dispensing of coffee should grind coffee, fill brewing chamber, tamp down coffee grounds, brew coffee, detecting coffee cup, fill coffee cup and eject used grounds are to be made automatically. Automatic coffee dispensing process will trigger once the required money of the coffee has been received from the customers. Different procedures have to be followed to prepare different flavours of coffee. Expresso: The coffee beans are grinded finely and 7gm of powder is used for dosage to prepare 30ml of expresso. Tamping has to be done at 134N for 2seconds. The hot water at 92ÃÅ'Ã…   -96ÃÅ'Ã…   Celsius at 9-10 Bar pressure and have to be extracted at 25 seconds. Small cup has to be used. Latte: Expresso and hot milk at 92 degree Celsius has to be added. Large cup is used. Cappuccino: Expresso and milk foam (2/3 of cup) has to be mixed; large cup is used for collecting the cappuccino. Black coffee: expresso and more amount of water (2/3 of cup) is mixed and large cup is used. The cup has to be detected by means of the sensors. The two sensors are used for cup detection. To sense the small cup, the sensor has to be placed at its height. If the expresso is selected and the sensor for the small cup activated means the valve is opened to send the coffee to the cup. To detect large cup, the sensor for the small cup and another sensor placed at the height of large cup has to be activated. If not the user has to be informed in the display PLACE LARGE CUP. EMBODIMENT DESIGN: Power supply: Since all electronic circuits work only with low D.C voltage it needs a power supply unit to provide the appropriate voltage supply. This unit consists of transformer, rectifier, filter and regulator. A.C voltage typically 230V rms is connected to a transformer which steps that AC voltage down to the level to the desired AC voltage. A diode rectifier then provides a full-wave rectified voltage that is initially filtered by a small capacitor filter to produce a DC voltage. This resulting DC voltage usually has some ripples or AC voltage variations, regulator circuit can use this DC input to provide DC voltage that not only has much less ripple voltage but also remains the same DC value even the DC voltage varies somewhat, or the load connected to the output DC voltage changes. The power supply unit is a source of constant DC voltage. The required DC supply is obtained from the available AC supply after rectification, filtration and regulation. Transformer Rectifier Regulator Filter 230 V 5v AC DC 12V 12V 12V Figure 5- Block diagram of power supply. SENSORS: Proximity sensors: These types of sensors are used to determine the presence of nearby objects. They are essentially non contact two state devices which give ON-OFF outputs. The proximity sensor often emits an electromagnetic field or beam and look for changes in the field. The object being sensed is often referred to as the proximity sensors target. Different proximity sensors targets demand different sensors. Inductive proximity sensor: This sensor is used for the detection of ferrous metal objects over short distances. Inductive proximity sensors operate under the electrical principle of inductance. Inductance is the phenomenon where the fluctuating current, which by definition has a magnetic component, induces an electromotive force (emf) in a target object. (inductive proximity sensor, 2008) An inductive proximity sensor has four components; the induction coil, oscillator, detection circuit and output circuit. The oscillator generates a fluctuating magnetic field the shape of a doughnut around the winding of the coil that locates in the devices sensing face. When a metal object moves into the magnetic field of detection, eddy circuits build up in the metallic object. The sensors detection circuit monitors the oscillators strength and triggers an output signal from the output circuitry proportional to the sensed gap between probe and target. (inductive proximity sensor, 2008) This sensor is used as a sensor S1 in the coin detecting mechanism. Its range is about 50mm. Strain gauge load cell: The load cell is an electromechanical transducer that coverts load acting on it into an analogue electrical signal. Load cells provide accurate measurement of compressive and tensile loads. Load cells commonly function by utilizing an internal strain gauge that measures deflection. Because the modulus of the elasticity of a load cell is constant the amount of strain can be calibrated to determine the force upon the train in the load cell which is measured by strain gauge transducer. This strain gauge load cell is used because of its accuracy and its response time. This strain gauge is used for the detection of weight. By means of calculating the force the mass of the object can be identified Since, F= m.A Where, F= force, m= mass; A= acceleration. Mass of the coin is known, by calculating acceleration value, the force can be found. According to the force value the coin can be detected. This strain gauge works in the range of 0-50k lbs. accuracy in the range of 0.03- 0.05%, ( load cell, 2010). It is inexpensive too. This strain gauge load cell is used because of its accuracy and its response time. Strain gauge is attached to the object or the strained element where the force is being applied. As the object is stressed due to the applied force, the resulting strain deforms the strain gauge attached with it. This cause an increase in resistivity of the gauge which produces electrical signal proportional to the deformation (W.Bolton, 2003, pp. 36-37) .The measurement of resistivity is the measure of strain which in turns gives the measurement of force or load applied to the object. The change of resistance is generally very small and is usually measured using a Wheatstone bridge circuit where the strain gauges are connected to the circuit. Temperature sensor: Temperature measurement is needed in coffee machine to maintain the temperature of water and milk. Temperature is defined as the average kinetic energy of the individual molecules that comprise the system. As the temperature increases, the molecular activity also increases and thus the average kinematic energy increases. There are different sensors to measure the temperature they are: Bimetallic strip Resistance temperature detectors (RTDs) Thermistors Thermocouples Thermodiodes and transistors. Among this in coffee machine the thermistor is going to use. The most commonly used temperature sensors are resistance temperature detector (RTD) and thermistor. Both are temperature-sensitive resistors. Thermistor, a word formed by combining thermal with resistor. Thermistor is a non-linear device; their resistance will decrease with an increase in temperature, but at a much faster rate than that of RTDs. The resistance can change by more than 1000 times. As a result, thermistor can sense minute change in temperature that is otherwise undetected by RTDs and thermocouples, (W.Bolton, 2003, pp. 43-47). Thermistors are small, inexpensive devices that are most commonly made of metal oxides such as those of chromium, nickel, manganese and cobalt. The metals are oxidised through a chemical reaction, ground to a fine powder, then compressed and subject to very high heat. These oxides are semiconductors. Thermistors can be classified into two types depending on the temperature coefficient of resistance (k). If k is positive, the resistance increases with increasing temperature, and the device is called a positive temperature coefficient (PTC) thermistor or posistor. If k is negative, the resistance decreases with increasing temperature, and the device is called a negative temperature coefficient (NTC) thermistor. NTC thermistors are mostly used in temperature sensing devices where as the PTC thermistor are mostly used in electrical current control devices. The NTC thermistor is going to use in this coffee machine to sense the heat of water and milk. Thermistors respond quickly to temperature changes, and they have a higher resistance, so junction effects are not an issue. Typical accuracies are 1%, but the devices are not linear, have a limited temperature or resistance range and can be self heating. Compared to other sensors, thermistor have a limited measuring range, typically from -80 to 150 degree Celsius. To measure the temperature of water and milk this range is more enough. Advantage of using thermistor: High and fast output. Manufactured in almost any shape and size. Very high degree of accuracy. Good stability and repeatability. Has the ability to withstand mechanical and electrical stress. Temperature controller: The PID controller is used to control the temperature in the coffee machine. The purpose of using PID controller is it eliminates offset of the proportional mode and provides fast response. The three adjustment parameters here are proportional gain, integral time and derivative time. PID controller is the most complex of the conventional control mode combination. The PID controller can result in better control than the other controllers. The PID controllers are mainly used to control the process parameters like temperature, flow, etc. Level sensor: The measurement of level of the water and milk in the tank of coffee machine is very essential. There are number of devices to measure the level of the liquids in the tank. There are two methods in measuring the liquid they are direct and indirect method. Here direct method is going to use because the level if the liquid in the tank can be measured by means of float method, (W.Bolton, 2003, pp. 41-42). The most commonly used design in float type is hollow metal ball or sphere. Here there is no restriction to the size, shape or material used. The design consists of a ball float attached to a rod, which in turn is connected to the lever arm. A slider is attached in the lever is connected to the potentiometer. By means of this arrangement the level can be measured. The water for the machine is continuous that has to be controlled. The level in the water tank can be controlled automatically. The control system maintains water level in the storage tank. The system performs this task by continuously sensing the level in the tank and adjusting a supply valve to add more or less water to the tank. The desired level has to be set by the operator. The level transducer measures the level within the tank by using the float and potentiometer arrangement. The level transducer sends the signal which is the feedback for the control device. This feedback is compared with the desired level value to produce the required control action that will position the level control as needed to maintain the desired level. The level controller used here is PID controller. The block diagram of automatic tank-level control system is shown below. Infra red beam sensor: Infrared beam sensors used for detecting the cups. Consists of a transmitter and a receiver, and the integrated amplifier can produce infrared beam. The LEDs should be properly covered with a reflective material like glass or aluminium foils on the sides to avoid the spreading of the IR beam and to get a sharp focus of the beam. The receiver uses a sharp IR module. When the IR beam from the transmitter falls on the IR module, the output is activated this activates the relay and deactivated when the beam is obstructed. It has highly reliable performance. The operating range of this sensor is 0-6m. Operating temperature of this sensor is -20 degrees centigrade to 60 degrees centigrade. Aperture angle of infrared beam sensors is +/- 8 degrees. (sensors, 2010) Solenoids: A solenoid is a device which is used to convert an electrical signal in to mechanical motion usually in straight line. The solenoids are used in the coffee machine for various purposes like coin management, sending the coffee bean in to the grinder, to open the 50 pence bin to give change when  £2 coin is inserted. The two major parts in the solenoids is coil and movable iron core. The coil used here is to be DC which when energised pulls the core inside it and this result in the mechanical motion of the core. The amount of force by which the core is pulled depends on the amount of current flowing in the circuit and the number of coils. The solenoids are very cheap and its works under 24V DC. D.C Motor: The DC motors are widely used in modern control system and as a final control element in positional or speed control system. The D.C motor is used for the purpose of grinding the coffee beans. This motor has to be controlled. This can be done by means of closed loop control. This speed controller is done by means of pulse width modulation controllers. This has the advantage that its drives the bipolar power transistors rapidly between cut off and saturation where operation is very efficient. (B. Histand Alciatore, 1999) Feed back is used in this circuit to modify the motor speed even if the conditions are changed. Hydraulic pumps: The hydraulic pump is used for the purpose of pumping the water and milk from the tank. The reason for using hydraulic pump is it converts the mechanical energy supplied into hydraulic energy by lifting water or milk to higher levels. Hydraulic energy refers to potential and kinetic energy of a liquid. Hydraulic pumps are the energy-absorbing machines. Since, it requires mechanical power to drive. Lifting of water or milk to higher level is carried out by the various actions of pumps such as centrifugal action, reciprocating action etc. (hydraulic pump, 2010) Power, P = = = Flow rate, Q= Power, P= pressure * flow rate The advantage of using hydraulic systems are it is easy to produce and transmit hydraulic power, it is uniform and smooth, balancing hydraulic forces is easier, it is easy to maintain ,weight to power ratio is very less, it is easy to maintain, maximum fluid flow, frictional resistance is less and hydraulic systems are safe and compact. Gears: The gear is used during the tamping process. The process is based on the relative position of the shaft axes and the position of the teeth on the wheel. For this purpose, helical gear is used in this process. Helical gears are simple modification of spur gears. A helical gear has teeth in the form of helix around the gear. The angled teeth engage smoothly than do spur gear teeth. This causes helical gears to run more smoothly and quietly than the spur gears. This type of gear is used in high-speed application. Because of high-speed, pressure is produced. Where, pressure = mass * acceleration. The selection of ball and roller bearings for gear is considered upon the following factors, they are The load carrying capacity and the nature of the load The speed of shaft in R.P.M The anticipated life of bearings. Magnitude and direction of loads. The proportion of thrust to radial load. Human machine interface:- Human machine interface is an important part to design. As this is an automatic machine and the inputs to the machine are from the user, so there should be an interface between these two. This is accomplished with the help of buttons placed on the front panel. Also the touch sensors located at the back of each button are responsible to transfer the user inputs to the machine. The LED display informs the user regarding the process and intimate any faults in the system. Push buttons: The push button is used for the purpose of selecting the variety of coffee by the user. There are four push buttons in the machine. LED display: The dispensing machine should be capable of outputting text signals so that the user will know the process present state through LED display. Since the machine is made to be user friendly all the process happening in the machine as to informed to the user. If the coin is inserted that has to be informed to the user. The microprocessor is used to store all the information that has to be displayed for the ongoing process. If suppose, milk in the empty means through the level sensor the signal is sent to the microprocessor according to that it will send the output to the display as MILK TANK EMPTY. MICRO-CONTROLLER: It is the brain of coffee machine. The microcontroller contains a microprocessor, memory, I/O capabilities, and other on-chip resources. It is basically a microcomputer on the single chip. The main purposes of using the micro-controller are low cost, versatility, ease of programming and small size. This micro controller is physically embedded in the system to perform the control functions, (Onwubolu, 2005, pp. 205-256) . The PIC micro controller is the most commonly used micro-controller. This has various features like analogue to digital (A/D) and digital to analogue (D/A) converters, timers, digital I/O ports and a serial communication interface. The temperature and flow sensor gives analogue value that will be converted to digital in the micro-controller. So there is no need for external analogue to digital (A/D) converter in this process. Communication: Communication betwee

Prosperity and Peril at the Peak with Pericles Essay -- Philosophy, Gr

In the Age of Pericles, from 491 until his death in 429 BCE, Athens thrived. In this short period, Athens was a place of reform and advancement, giving us our sources of democracy, architecture, and the dramatic arts. Here, great minds such as Socrates and Sophocles congregated; here, ideals flourished. These developments of the Age of Pericles distinguish it as a high point in Greek society and, indeed, all Western civilization. From the start of his career in government, Pericles provided the Athenian people with the foundations of democracy. In 461, Pericles campaigned against aristocrats sitting in government, and in 451 enforced a law to prevent children of non-citizens from becoming full citizens (PBS, â€Å"The Greeks†). By managing the ties that aristocrats often made to other countries, Pericles managed to keep government from being monopolized. Unlike the aristocracy, Pericles focused on the disenfranchised, instructing Athenians to â€Å"especially obey those laws enacted for the protection of the oppressed and those which, although unwritten, it is acknowledged shame to violate† (Kagan 166, from Thucydides 2.37.3). Expounding on this social observance of fairness, Pericles most directly gave rights to the Athenians when he made possible â€Å"the full participation of its citizens in the government of city and empire† (Robertson 90). This faculty of citizens to have full acces s to their government provided Athenians with the start of democracy. Although not everyone benefited, as women and slaves were left out during this particularly â€Å"masculine age† (Robinson 91), Pericles did try to attend to the rights of men as equally as he could. It was thus that he narrowed the gap in representation of wealthy and poor citizens: paying the ... ... of the state as a whole they judged him to be the ablest† (Kagan, from Thucydides, 2.65.4) Having realized that Pericles was altogether the best man to lead them, Athens re-embraced the man who brought them to their peak. Unfortunately, they soon fell from it, but as that didn’t happen until after the Age of Pericles, this age, gilded like Athens’ goddess, remains relatively intact. Athens was at once the site of the forerunner of democracy, the epitome of Classical architecture, the height of drama, naval superiority, and enlightened minds such as Socrates. As much as these developments gave Athens its preeminence, and despite how rapidly it fell, the growth of Athens in this brief time has given us the source of our modern democracy, our sense of culture, and our ideals for society. In the Age of Pericles, Athens bloomed, but even now we relish its benefits. Prosperity and Peril at the Peak with Pericles Essay -- Philosophy, Gr In the Age of Pericles, from 491 until his death in 429 BCE, Athens thrived. In this short period, Athens was a place of reform and advancement, giving us our sources of democracy, architecture, and the dramatic arts. Here, great minds such as Socrates and Sophocles congregated; here, ideals flourished. These developments of the Age of Pericles distinguish it as a high point in Greek society and, indeed, all Western civilization. From the start of his career in government, Pericles provided the Athenian people with the foundations of democracy. In 461, Pericles campaigned against aristocrats sitting in government, and in 451 enforced a law to prevent children of non-citizens from becoming full citizens (PBS, â€Å"The Greeks†). By managing the ties that aristocrats often made to other countries, Pericles managed to keep government from being monopolized. Unlike the aristocracy, Pericles focused on the disenfranchised, instructing Athenians to â€Å"especially obey those laws enacted for the protection of the oppressed and those which, although unwritten, it is acknowledged shame to violate† (Kagan 166, from Thucydides 2.37.3). Expounding on this social observance of fairness, Pericles most directly gave rights to the Athenians when he made possible â€Å"the full participation of its citizens in the government of city and empire† (Robertson 90). This faculty of citizens to have full acces s to their government provided Athenians with the start of democracy. Although not everyone benefited, as women and slaves were left out during this particularly â€Å"masculine age† (Robinson 91), Pericles did try to attend to the rights of men as equally as he could. It was thus that he narrowed the gap in representation of wealthy and poor citizens: paying the ... ... of the state as a whole they judged him to be the ablest† (Kagan, from Thucydides, 2.65.4) Having realized that Pericles was altogether the best man to lead them, Athens re-embraced the man who brought them to their peak. Unfortunately, they soon fell from it, but as that didn’t happen until after the Age of Pericles, this age, gilded like Athens’ goddess, remains relatively intact. Athens was at once the site of the forerunner of democracy, the epitome of Classical architecture, the height of drama, naval superiority, and enlightened minds such as Socrates. As much as these developments gave Athens its preeminence, and despite how rapidly it fell, the growth of Athens in this brief time has given us the source of our modern democracy, our sense of culture, and our ideals for society. In the Age of Pericles, Athens bloomed, but even now we relish its benefits.

Tori Amos Biography :: essays research papers

Tori Amos, Goddess of Rock and Roll, and the piano. The girl who has been through so much, but still lives to tell about it and share all of her life experiences through her songs. Her life is almost like a song itself, with all of the trials and tribulations one can imagine.  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Amos, who was born in Newton, North Carolina on August 22nd, 1963 wasn’t originally called Tori. Her given name was Myra Ellen. The change of her name came later in her career. Right from the beginning, her talents on the piano were recognized. At the young age of three, before her legs were even long enough to reach the pedals, she was climbing up to the piano bench to play a song. By the age of five, she was the youngest student to ever be accepted to the Peabody Conservatory in Baltimore. She stayed at the Conservatory for several years, but by the age of eleven she was asked to leave because she didn’t want to play the music that was required of her. She once stated in an interview on the Rosie O’Donnell Show, â€Å"Those guys are dead, why do I want to play that crap! I want to be a composer...don’t we all...but I did.†   Ã‚  Ã‚  Ã‚  Ã‚  After getting kicked out of the school she began playing at piano bars. Her father always was tagging along, because she wasn’t old enough to go alone. She played at the bars, in addition to a Marriot hotel, until she graduated from high school. Sometime after that Ellen, as she was called, changed her name. One of Tori’s sisters brought her boyfriend to one of Tori’s shows one night to see her play. After the show the boyfriend told Amos that she indeed was not an Ellen. She looked like a Tori, and that is how it all began.   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  After high school, she joined a band called Y Kant Tori Read. The band signed to the Atlantic record label, and worked on the release of their first album. Their CD release flopped, and the band broke up. When their CD was first released, not many people wanted it. Amazingly enough, the CD now goes for around one hundred dollars as a Tori collectors item.   Ã‚  Ã‚  Ã‚  Ã‚  During this time, Tori was still doing little gigs here and there. One night after a show, something happened that changed her life dramatically. Tori offered a member of the audience a ride home after the show, and he raped her in the back of the car with a gun to her head.

zionism- Greenberg :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Response to Myth and Metaphor It is not irrelevant nor is it fair to respond to the mirage of childish bickering that just frustrated the last half hour of my day without mentioning the more than obvious biases of the writers involved in their respective fields. Harold Fisch, a professor of English Literature at Leeds University and soon after at Bar-Ilan University, writes a detailed analysis of what he refers to as the Myth and Metaphor of the various approaches to Zionism in his book titled The Zionist Revolution. In this analysis Fisch attempts to break down several approaches to the myth and metaphor of Zionism to give the reader a sense of broader knowledge and a feeling that the field is generally covered in this article. He inevitably presents forth the opinion that he holds of highest regard last and most obviously, due to his literary nature, third in line after those of Aaron David Gordon and HaRav Avraham Yizchak Hakohen Kook respectively.   Ã‚  Ã‚  Ã‚  Ã‚  The problem with Fisch’s analysis of Gordon and his metaphor of Zionism is that the passages that he selected to quote do not at all confine themselves to the commentary he addressed to them. In this selected passage Gordon speaks of; â€Å"a living organism which performs its various functions naturally†¦..our natural soil from which we have been uprooted†¦..The heart of our people is here†¦for here is the mainspring of our life†¦..Here something is beginning to flower†¦Here is the force attracting all the scattered cells of the people to unite into one living national organism†(pg. 56).   Ã‚  Ã‚  Ã‚  Ã‚  Fisch’s misplaced claim comes directly following this quote when he claims that Gordon desires â€Å"a kind of new religion to replace the old religion of Judaism†. Fisch continues on the following page and claims that the religion he speaks of is â€Å"one distinct from that of the Law and the prophets. From the biblical point of view we may say that we have here a resurgence of something like the worship of the Bealim, the gods of the earth†. From the passage presented by Fisch we don’t see any such existence. Gordon, like Rav Kook, and many other contemporaries in this field, is devoted to the ideals of restoration to our roots and the â€Å"mystical† future that the Holy Land holds for its people when they will return to her. This concept is very much a part of the Jewish religion and can be seen in the well know verse â€Å"Return to me and I will return to you†, referring to G-d’s promise to his people that he will return to them once they take the initiative to return to him.

Domestic vs International Trade

Domestic Vs International Trade Mohammad Tariqul Islam Domestic Trade: Trade among parties in the same country. Domestic trade is the exchange of goods, services, or both within the confines of a national territory. They are always aimed at a single market. It always deal with only one set of competitive, economic, and market issues. The trading is always with a single set of customers all the time, though the company may have several segments in a market. Finally local trade or home trade or Domestic trade may be sub-divided into Wholesale trade, and Retail trade.International Trade: Trade among parties residing in different countries. International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history, its economic, social, and political importance has been on the rise in rece nt centuries. Some difference between International trade and local or domestic tradeInternational trade is in principle not different from  domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as  tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.Another difference between domestic and international trade is that  factors of production  such as capital and  labour  are typically more mobile within a country than across countries. Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. Advantages and Disadvantages of international Trade Advantage of international trade †¢ Monetary gains to the respective country indulging in trade. †¢ More variety of goods available for consumers. †¢ Better quality of goods. Competition both at the international level as well as local level. †¢ Closer  ties  between nations. †¢ More exchange of technical know-how. †¢ Local producers will try to improve the quality of their products. †¢ Increase in  employment  locally. Disadvantage of international trade †¢ Local production may suffer †¢ Local industries may be overshadowed by their international competitors †¢ Rich countries may influence political matters in other countries and gain control over weaker nations. †¢ Ideological differences may emerge between nations with regard to the procedures in trade practices. Read also Recording General Fund Operating Budget and Operating TransactionsInternational trade is beneficial to world economy. It adds to the money coffers of the world at large. Every country can benefit monetarily if it is able to dispose off its surplus goods after meeting the requirements of the local people. Key differences: †¢ International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. †¢ The main difference is that international trade is typically more costly than domestic trade.The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture. †¢ Another difference between domestic and international trade is that factors of production such as capital and labor are ty pically more mobile within a country than across countries. †¢ Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production.Trade in goods and services can serve as a substitute for trade in factors of production. †¢ Within a country labour and capital moves freely to get maximum returns. These factors of production do not move with such freedom among different countries due to differences in culture, climate, language, customs and political restrictions imposed by regulatory authorities. This immobility gives rise to wage and interest differentials among countries. †¢ Different currency system introduces additional cost and risk in international trade as the value of currencies is constantly subject to variations. As long distances involved transport costs for international transactions are higher than for domestic trades. Home trade is called domestic trade in some countries. These are the differences as seen by me. 1. For home trades, payments could be made in home currency only. Foreign trades are to be paid invariably in convertible currencies. 2. Home trades generally have no restrictions of movement within the country. In international trade, there are restrictions as to movement of specific goods to specified countries. 3. Home trades have taxes levied by the Government and local bodies.International trades have levies called customs duties. These invariably go to the Federal Government. 4. Documents for domestic trades are comparatively simple and easy to understand and follow. Foreign trades have a different set of documents which must be filed in every case. 5. Insurance of consignments sent on foreign trade are compulsory; in home trade it is optional. 6. Usually, foreign trades are preceded by payment or promises of payment made by international foreign exchange traders (also called Letters of Credit. In domestic trades, payments a re realised usually after the trade is executed. Depending on the credit rating of the parties concerned, even a simple promise is not taken. Letters of Credit in domestic trades is not common but not ruled out. 7. Credibility of parties can be got verified in foreign trades through the trade representatives of the countries involved in the transaction. 8. On receipt of consignment at a foreign country, the documents are handed over to the buyers only after payment is realised.Thereafter, the Banks concerned remit the payments to the sellers through normal international banking channels. In respect of domestic trades, bankers may or may not be the intermediaries. Payments can be directly sent to the sellers by the buying party. 9. Under the United Nation's charter, goods prohibited for specific countries cannot be sent to them by member countries. Penalties extending to boycott of trade with that country may follow. In domestic trades, such prohibitions do not exist. (Example: selli ng atomic energy raw materials to Iran, Iraq etc. 10. International trades are further government by agreements between member countries of General Agreement on Tariffs and Trade. Domestic or home trades are not subject to such agreements. An international business is a business whose activities are carried out across national borders. This differs from a domestic business because a domestic business is a business whose activities are carried out within the borders of its geographical location. A domestic company is one that confines its activities to the local market, be it city, state, or the ountry it is in. It deals, generally, with one currency, local customs and cultures, business laws of commerce, taxes and products and services of a local nature. The international company, on the other hand deals with businesses and governments in one or more foreign countries and is subject to treaties, tariffs. currency rates of exchange, politics, cultural differences, taxes, fees, and pe nalties of each country it is doing business in. It may also be conducting business in it's home country, but the emphasis is on trading in the international marketplace.Differences between Domestic and International Trade International Trade: The exchange of goods and services between countries is called International Trade. Inter-Regional Trade: The exchange of goods and services with in a country is called Inter-regional Trade. Differences between International and Inter-regional Trade and need for a separate theory: A number of things which make difference between international and inter-regional are given as under. We can understand from these reasons that it gives rise to a separate theory of international trade. . Factor Mobility: Labour and capital as factor of production do not move freely from one country to another country as they do with in the same country. Thus labour and capital are regarded as immobile between countries while they are perfectly mobile within a countr y. Adam Smith said â€Å"Man is of all forms of luggage, the most difficult to transport†. Differences in cost of production can not be removed by moving and money. The result is the movement of goods. On the contrary between regions with in the same olitical boundaries, people distribute themselves more or less according to the opportunities. Real wages and standard of living tend to seek a common level though they are not wholly uniform as between national these differences continue to persist and check population movements. Capital also does not move freely from one country to another country. 2. Different Currencies: Each country has a different currency. Buying and selling between nations give rise to complications absent in internal trade. This hampers smooth flow of trade as between one country and another country.A large number of foreign exchange problems arise in number of foreign trade which are non-existent in inter-regional trade. 3. Different National Policies: Different needs lead countries to pursue divergent national policies and not only with respect to foreign exchange rates. National Policies differ in a wide matter of domestic matters affecting international economic relations, wages, prices, competition, investment, business regulation etc and often involve interference directly in international economic intercourse in tarrifs, exchange controls, non-tarrif barriers and the like. . Different Political Circumstances: Mostly countries differ in political circumstances. In inter-regional trade, trade takes place among same people. But international trade takes place among people of different cultures, habits and languages. These cultural distinctions between markets, important in the absence of different national measures have led political scientists to take look at the nature of countries. 5. Difference in National Resources: Different countries are endowed with different type of natural resources.They tend to specialise, in the pro duction of those commodities in which they are richly endowed and trade them with others where such resources are scare. 6. Geographical and climatic differences: Every country cannot produce and commodities due to geographical and climatic conditions, except at possibly prohibitive costs. Countries having climatic and geographical advantage specialise in the production of particular commodities and trade them with others. 7. Different Markets: International markets are different in various aspects.Even the system of weights and measures and pattern and styles in machinery and equipment differ from country to country. Goods which are traded within regions may not sold in other countries. This is why in great many cases products to be sold in foreign countries are especially designed to confirm to the national characteristics of that country. 8. Problem of Balance of Payments: The problem of balance of payments is perpetual in international trade while regions with in a country have no such problem. 9. Restrictions on Trade: Trade between different countries is not free.There are restrictions imposed by custom duties, exchange restrictions, fixed quotas or other tarrif barriers. 10. Ignorance: Differences in culture, language and religion stand in the way of free communication between different countries. In inter-regional trade labour and capital freely moves about. These factors too make internal trade different from international trade. 11. Transport and Insurance Costs: The cost of transport and insurance also check the free international trade. The greater the distance between the two countries the greater the cost and insurances.

Change: Theme in the Metamorphosis Essay

The Metamorphosis by Franz Kafka is a novella. The theme in this story is that change in one character leads to positive and negative change in other characters. Gregor Samsa, the main character changes into dung beetle. His change affects his family deeply and they make both positive and negative changes to accommodate both his change and themselves. The family resents Gregor and sees him as a burden, which is a negative change, but previously the family had relied on Gregor as their source of income. This is where the conflict arises because now they have to learn to work for themselves instead of relying on Gregor for income, which is ultimately a great positive change. The family’s initial reaction towards Gregor is largely extremely negative. When the family and the chief clerk, Gregor’s boss, see him for the first time they panic. Gregor is promptly shoved back into his room and he is locked there. â€Å"No one came any longer, and, in addition, the keys were now on the outside† (page 25). This represents the family’s immediate hostility towards Gregor where as before Gregor’s family had always taken care of him. Gregor’s sister, Grete decided to at least bring Gregor some food but even then she is still frightened. â€Å"†¦She immediately opened the door again and walked in on tiptoe as if she were visiting a seriously ill person or even a stranger† (page 26). Mrs. Samsa asks to see Gregor but Mr. Samsa and Grete stop her. It shows that at least she has accepted Gregor’s change and wants to see him. Although the family does not react very well towards Gregor’s change his family still trys to help him. Grete notices that Gregor is learning to move around, this is a positive change. She decided that moving furniture out of Gregor’s room would give him more room to move around, and she asks for her mother’s help. Gregor sees his mother and sister taking away the last traces of his humanity. In a plight of desperation he sticks himself to a picture on the wall. Grete is annoyed and tells him to get off, and when Gregor’s mother catches sight of Gregor she is so frightened she faints. Grete panics because she is worried about her mother, and Gregor follows her to get medicine for their mother. In the midst of all this chaos Mr. Samsa comes home. A positive change in his  appearance is seen. Gregor had seen him as â€Å"†¦the same man who would lie wearily, buried in bed,†¦who had received him wearing a bathrobe and sitting in an arm chair†¦Ã¢â‚¬ (page 37). Where as now Gregor’s father â€Å"†¦was perfectly erect, dressed in a tight blue uniform† (page 37). Although Mr. Samsa’s appearance and his acquiring a job is a positive change his reaction towards Gregor is negative. Gregor’s father assumed that Gregor had done something violent and he was so furious he threw an apple at Gregor. Mr. Samsa throwing the apple was also a negative change because this was his son he was injuring. The change in the family’s behavior towards Gregor had become increasingly negative. Gregor’s mother and Grete had obtained jobs, and Gregor saw how tired and overworked the family was becoming. In the beginning Grete took careful time to feed Gregor and clean his room, but as she worked she hastily shoved food into Gregor’s room as she ran off. The bitterness of the family peaked, and Grete even wished for Gregor to die. â€Å"And therefore I merely say: we have to try to get rid of it† (page 47). Where previously Gregor had been dying physically he had accepted that he was a burden on the family and he was also dying emotionally. He accepted his face and dies peacefully. When the family finds Gregor dead they are relieved and thankful they don’t have to deal with him anymore. Gregor dying had a positive effect on the family because now they were relieved of the burden that they had been given. The family learned how to work for themselves, yet in the process they treated Gregor poorly, the first being positive but their treatment of Gregor being negative. If one person changes it become necessary for the people around them to change as well. Often times those changes made can be positive or negative. Gregor’s change greatly affected the family and it became necessary for the family deal with the change. The changes they made were largely negative and not beneficial towards Gregor. The family was unwilling to make positive changes in their behavior towards Gregor which resulted ultimately in his death. This shows that whatever changes people choose to make, either positive or negative, the changes will always have a great effect on everyone around them.

Blaine Kitchenware Case Study Answers Essay

1. ABOUT THE COMPANY Blain Kitchenware, Inc. (BKI), founded in 1927, is a mid-sized producer of small appliances for residential kitchens. BKI has an approximate 10% market share of the $2.3 billion U.S. market for small kitchen appliances, with 65% of sales originating from the US market. The company is public since 1994, and the majority of the shares is controlled by the founder’s family (62% of outstanding shares), who also have a strong representation in the board of directors. Mr. Dubinski – the CEO since 1992 and great-grandson of one of the founders, successfully completed an IPO in 1994 and gradually moved the production abroad in the early 90s. BIK`s current strategy is to complement its product offerings by acquiring small independent manufacturers or the kitchen appliance product lines of larger diversified manufacturers. The financial data at the end of 2006 reflects a strong financial position: The company has raised nearly no debt, it is very liquid, but also under-levered. BKI is one of the strongest companies in this industry in terms of EBITDA margin (22% in 2006), high level of cash holdings and no debt. However, the shift toward higher-end product line could not prevent the margins from a slight decline over the last three years. This was mainly explained by the integration costs and inventory write-downs due to the acquisitions completed so far. The other reason was that its organic revenue growth had suffered in recent years, as some of the core products lost market share. The growth of the top line was mainly due to the acquisitions. BKI’s annual return on equity is significantly below that of its publicly traded peers: 11% compared to an average of 25,9 and a median of 19.5 %. Now the over-liquid and under-levered BKI is facing strong pressure from a private equity group interested in buying the company`s common stock. Thus, the CEO considers a stock repurchase to avoid a hostile takeover. The company decided to distribute all excess cash as a dividend. The second step will be the recapitalization plan to hold permanently $ 300m of debt on the balance sheet, which is a difficult decision due to the first sign of the mortgage crisis. Moreover, the company expects annual revenue decline of 4%  in 2007-2009, and a permanent 2% growth rate afterwards. 2. METHODOLOGY AND VALUATION From a company`s perspective, the benefit of debt is the tax shields created, which are captured by equity holders. The family-controlled company in our case has little experience with holding debt and the board of directors might not easily accept the restructuring plan. What they should know is that the right amount of debt increases the firm’s value and discourages the takeovers. However, a too-high level of debt can lead to financial distress, lower credit rating, and higher interest expenses. For BIK, the credit rating regressed from A (Iteration 1) to A- (Iteration 10), accordingly changing the credit spread from 1.40% to 1.65%. Our aim is to asses the how the proposed recapitalization will affect the enterprise value, after the distribution of the excess cash as dividends, by using APV. We estimate the present value of the firm as if it were all-equity financed (VU), then we add the present value of tax shield associated with the new debt (permanent debt with market value of 300 mln USD), and subtract the present value of bankruptcy costs. We have to estimate expected after-tax operating cash flows , the expected tax shields and discount them at two different discount rates: (unlevered cost of capital) and (usually , cost of debt). For the present value of the bankruptcy costs, we have to first estimate the risk-neutral probability of default of the company. VL = VU + PV (future tax shields from debt) – PV (bankruptcy costs),  or rewritten as  threshold coverage ratio for default  probability of firm default conditional on surviving up to a specified period We start with a forecast of expected after-tax operating cash flows. We assume the annual 4% decline in revenues between 2007 and 2009 from the 2006 level, and a permanent 2% growth afterwards. Analysing the historical values of the operating margins from the Income Statement, we forecast values for the 2007-2009 period. The executives of BKI expect the firm to achieve operating margins at least as high as the historical ones. Thus, we took averages and slightly adjusted them toward higher values. Since the declining tendency in the last three years was cause by integration costs and inventory write-downs associated with acquisitions, which already have been completed. To the EBIT, estimated by using those margins, subtract the taxes, Capex, adjust for Depreciation, Amortization and change in Working capital. The capital expenditures were just over $10m on average per year. The company is expecting the Capex remain modest. Thus, we assumed a Capex of $10m for the next three years. We estimated Net Working Capital by using the average ratio of NWC/Net income of the last three years. Finally, we come up with the value for the operating after-tax operating cash flows for the next three years and the terminal value. We calculate the present value of these cash flows by discounting by the unlevered cost of capital, rU given as 8.7%, which gives us a value of the unlevered firm of ca. $566m. Secondly, we estimate the expected tax shields from the debt level: a permanent amount of $300m market value, and a constant tax rate of 40%. Then we calculate their present value using the appropriate discount rate reflecting the risk, rT (or rD). For the bankruptcy cost, we have the percentage of the unlevered-firm value of 20%, but for the present value, we need to estimate the risk-neutral probability of default q. This probability is calculated iteratively starting from the coverage ratio (EBITt-1 / Interest Expense). We match the coverage ratio number with the corresponding credit rating, which then has a corresponding default. This gives us the yield on debt y, the cost of debt rD, and the risk-neutral probability of default q. The formula for q is q=  where Ï  is the recovery rate in case of default, given here as 41%. In order to calculate the expected interest coverage ratio, we took the average EBIT between 2007 and 2009 for the mean of pre-tax cash flows, as well as the according standard deviation, since our estimation is future based. 2. SENSITIVITY ANALYSIS AND CONCLUSION We can conclude that by raising debt of $300m the company would be better of, since the value of the levered firm would be 16% higher that the value of the unlevered firm and will discourage the takeovers. However, the sensitivity analysis gives us an optimal value of debt of $354m, which would lead to an optimal ratio between the PV of tax shields and bankruptcy costs and, thus, a value of maximal levered firm of $680m, given that our assumptions for AVP will be realized in the future.

Ownership Structure, Managerial Behavior and Corporate Value

Journal of Corporate Finance 11 (2005) 645 – 660 www. elsevier. com/locate/econbase Ownership structure, managerial behavior and corporate value J. R. Daviesa, David Hillierb,T, Patrick McColganc a University of Strathclyde, UK b University of Leeds, UK c University of Aberdeen, UK Received 21 November 2002; accepted 6 July 2004 Available online 20 April 2005 Abstract The nonlinear relationship between corporate value and managerial ownership is well documented. This has been attributed to the onset of managerial entrenchment, which results in a decrease of corporate value for increasing levels of managerial holdings. We propose a new structure for this relationship that accounts for the effect of conflicting managerial incentives, and external and internal disciplinary monitoring mechanisms. Using this specification as the basis for our analysis, we provide evidence that the managerial ownership–corporate value relationship is co-deterministic. This finding is at odds with recent work which reports that corporate value determines managerial ownership but not vice-versa. D 2005 Elsevier B. V. All rights reserved. JEL classification: G32 Keywords: Ownership structure; Capital expenditure; Corporate value; Tobin’s Q 1. Introduction In a market without agency problems, corporate managers will choose investments that maximise the wealth of shareholders. In practice, competing objectives which are incompatible with the shareholder wealth-maximising paradigm may also be pursued. T Corresponding author. Leeds University Business School, University of Leeds, Maurice Keyworth Building Leeds, LS2 9JT, UK. Tel. : +44 113 3434359; fax: +44 113 3434459. E-mail address: d. j. [email  protected] c. uk (D. Hillier). 0929-1199/$ – see front matter D 2005 Elsevier B. V. All rights reserved. doi:10. 1016/j. jcorpfin. 2004. 07. 001 646 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 Following Jensen and Meckling (1976), a large literature has developed that examines how managerial behavior impacts upon firm performance. A vibrant strand of this literature concerns the relationship between managerial ownership levels, the direct investment decisions made by management and the inherent value of the firm, as proxied by Tobin’s Q ratio. Morck et al. 1988), McConnell and Servaes (1990), and Hermalin and Weisbach (1991) provide evidence of a significant nonlinear relationship between corporate value and managerial ownership. Specifically, value increases with managerial holdings for low levels of ownership. At some level, managers become entrenched within the firm resulting in a decrease in firm value. However, whereas Morck et al. (1988) and Hermalin and Weisbach (1991) document further changes in the corporate value–managerial holdings relationship at high levels of equity ownership, McConnell and Servaes (1990) report no such change. Recent work has built upon the findings of Demsetz and Lehn (1985) who argue that levels of managerial ownership will be determined endogenously in equilibrium. Moreover, Cho (1998) and Himmelberg et al. (1999) have shed doubt upon the earlier findings of Morck et al. (1988) and McConnell and Servaes (1990) by controlling for the effects of endogeneity and unobservable (to the econometrician) firm characteristics in their analysis. After controlling for the effects of endogeneity in the corporate value– managerial holdings relationship, they showed that managerial ownership had little or no effect on corporate value and investment. Short and Keasey (1999) and Faccio and Lasfer (1999) utilize a cubic specification to model the corporate value–managerial holdings relationship and both report a significant nonlinear functional form, similar to Morck et al. (1988), for British companies. However, neither study fully examines the misspecifying impact of endogeneity on their results. In this paper, we propose a new structure to the managerial ownership–corporate value relationship which captures a more complex characterisation of the evolving behavior of managers. We argue that at high levels of managerial ownership when external market discipline becomes neffective, there will be a resurgence of entrenchment behavior. With equity holdings around 50%, managers will have implicit control of their company, but still do not have objectives completely aligned to external shareholders. Only at very high levels of managerial holdings are incentives akin to other shareholders. When this model is applied to a l arge sample of firms incorporated in the UK, managerial ownership is seen to have a significant impact on corporate value. This relationship is endogenous, and consistent with Cho (1998) and Himmelberg et al. (1999), corporate value has a corresponding effect on managerial holdings. We also find that although ownership levels are affected by firm level investment, there is no evidence of the reverse occurring. In the next section we outline our model of the managerial ownership–corporate value relationship. We present empirical results in Section 3 and conclude in Section 4. 2. The model In this section, we propose an alternative structure to the managerial holdings–corporate value relationship and argue that the cubic, or simpler representations, used in earlier J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 647 studies1 are unnecessarily restrictive and misspecified. The model that is presented here captures further nonlinearities in this relationship at high levels of managerial holdings and has a quintic specification. Management is faced with both negative and positive incentives to ensure that they follow objectives which maximise shareholder wealth. The effectiveness of these incentives is potentially a function of the level of managerial ownership in the firm. We view the propensity of management to maximise shareholder wealth to be a function of three unobserved factors: external market discipline, even if it is weak, internal controls and convergence of interests. Moreover, the strength of each factor can be viewed as a function of the level of managerial ownership in the firm. 2 2. 1. Low levels of managerial ownership For low levels of managerial ownership, external discipline and internal controls or incentives will dominate behavior (see Fama, 1980; Hart, 1983; Jensen and Ruback, 1983). Empirically, Morck et al. (1988), McConnell and Servaes (1990) and Hermalin and Weisbach (1991) report results consistent with this behavior for the relationship between managerial holdings and corporate value. However, there is also the possibility that lower levels of ownership within this range have endogenously arisen from performance related compensation packages, such as stock options and stock grants rather than increased ownership in itself leading to higher Q ratios. 2. 2. Intermediate levels of managerial ownership At intermediate levels of managerial ownership, management interests begin to converge with those of shareholders. However, with greater ownership comes greater power in the form of voting rights. Managers may, at this level of holdings, maximise their personal wealth through increasing perquisites and guaranteeing their employment at the expense of corporate value. In addition, while low managerial ownership levels may have arisen through the vesting of compensation plans, it is unlikely that such plans will provide management with a moderate ownership stake in the firm. Moreover, even though external market controls are still in place, these and the effect of convergence of interests are not strong enough to align the behavior of management to shareholders. Managerial labour markets operate on the principal that poorly performing 1 See Morck et al. (1988), McConnell and Servaes (1990), Hermalin and Weisbach (1991), Cho (1998) and Himmelberg et al. (1999) for US companies and Short and Keasey (1999) and Faccio and Lasfer (1999) for UK companies. 2 For example, since compensation packages such as stock options are a transfer of wealth from shareholders to management, their value will lessen as managerial ownership increases. External market discipline is also a function of managerial ownership. Large shareholdings by top management act as a deterrent for takeovers because of the greater ability to oppose a hostile bid or drive up premiums to the point where bidders no longer view the target company as a positive net present value investment Stulz (1988). Finally, internal controls in the form of monitoring from large shareholders and corporate boards should reduce the scope for managers to diverge greatly from the interests of shareholders. Again, however, such discipline is likely to be inversely related to managerial control Denis et al. (1997). 648 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 anagers can be removed and appropriately disciplined. Studies by Denis et al. (1997) in the US and Dahya et al. (2002) in the UK both find an inverse relation between topmanagement turnover and managerial ownership. This lack of discipline provides evidence of a deficiency in incentives for managers to maximise shareholder value at this level of owners hip. Franks and Mayer (1996) also report that hostile takeover targets in the UK are not poorly performing firms, which is in contrast to the findings of a disciplinary role for corporate takeovers in the US by Martin and McConnell (1991). In this context, Franks and Mayer (1996) provide significant evidence that takeovers in the UK may not act to remove a self-serving board even when they are performing poorly. This lack of disciplinary control over poorly performing management may strengthen management’s ability to pursue sub-optimal corporate policies at intermediate ownership levels. 2. 3. High levels of managerial ownership (less than 50%) As levels of managerial equity ownership grow, objectives converge further to those of shareholders. At ownership levels, below 50% management do not have total control of the firm and external discipline still exists. While perhaps no longer being subject to any major discipline from external takeover markets, it is likely that even at these levels of ownership, managers are still subject to discipline from external block shareholders. This is particularly true in the UK, where because of strong informal ties between institutions (Short and Keasey, 1999), a lax regulatory environment concerning the ownership of listed companies (Roe, 1990) and low monitoring costs (Faccio and Lasfer, 1999), institutional activism is stronger than in the US. This view is also consistent with Franks et al. (2001) contention of strong minority protection laws in the UK, whereby large shareholders cannot transact with related companies without the consent of the firm’s minority shareholders. The UK regulatory framework stands in contrast to US corporate law which limits minorities to seeking redress after the related party transaction has taken place. Combined with monitoring from UK institutions, this may allo w external shareholders to impose some form of control on management even at elatively large levels of managerial ownership. 2. 4. High levels of managerial ownership (greater than 50%) At levels above 50% ownership, management has complete control of the company. Although atomistic shareholders are unlikely to have been able to in influence managers at far lower levels of ownership than this, there is always a possibility that a cartel of blockholders, allied with minority shareholder’s rights under UK company law, may be able to mount a challenge to management if they fail to make decisions in shareholders’ best interests. For a more in-depth discussion of the institutional differences and similarities between the United Kingdom and United States, see Short and Keasey (1999) and Faccio and Lasfer (1999). 3 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 649 At greater than 50% managerial ownership, this is no longer likely to be a serious issue to management. Furthermore, with majority ownership, the probability of a hostile takeover effectively becomes zero. The failure of external discipline combined with a lack of blockholder incentives above 50% may result in a decrease in corporate value for a small window of managerial holdings above this level. This fall in corporate value is consistent with the theoretical predictions of Stulz (1988). 2. 5. Very high levels of managerial ownership Finally, as managerial shareholdings rise to very high levels, management effectively become sole owners of the company. This would lead to value-maximising behavior as predicted by Jensen and Meckling (1976). Consistent with Morck et al. 1988), Short and Keasey (1999) and Faccio and Lasfer (1999) at above a certain level of ownership, corporate managers are faced with such severe financial penalties for failing to maximise the value of their companies that they are forced to make decisions which will maximise firm value, regardless of how this affects their private benefits of control. 2. 6. Summary Our characterisation of a highly nonlinear relationshi p between managerial equity holdings and corporate value is in contrast to earlier studies (Morck et al. , 1988; McConnell and Servaes, 1990; Hermalin and Weisbach, 1991; Cho, 1998; Himmelberg et al. 1999)4, which posit fewer turning points in their analysis. There is little theoretical basis on which the individual turning points can be determined, and the findings of Kole (1995) suggest that these will be in influenced by the size of the firms in the sample. However, it is expected that the second local maximum will be in the region of 50% managerial ownership reflecting the stage at which management gain total control of the company. In the next section, the main tests of our hypotheses will be carried out. 3. Empirical results 3. 1. Description of the data We use data on managerial and external block ownership for 1995 from the MacMillan London Stock Exchange Yearbook for 1996 and 1997. The Yearbook provides summary accounting data including a consolidated balance sheet, information on company directors, legal information on the company’s lawyers, auditors and stockbrokers, principle activities, company history, capital and dividend payments, and industrial sector for the McConnell and Servaes (1990) modelled the corporate value–managerial ownership relationship as a quadratic function, which by construction has only one turning point. 650 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 vast majority of all quoted companies and securities. 5 We restrict our attention to nonfinancial companies only and require that each firm has complete managerial and external ownership data for 1995, which leaves 802 industrial companies in our sample. 6 Data on capital expenditures, to tal assets employed, after tax profits, depreciation, leverage, equity market values, and research and development costs are collected from Datastream. We estimate Tobin’s Q ratio (our proxy for corporate value) using the formula below: Q? MVEQ ? PREF ? DEBT BV ASSETS ? 1? where: MVEQ=the year-end market value of the firm’s common stock; PREF=the yearend book value of the firmTs preference shares (preferred stock); DEBT=the year-end book value of the firmTs total debt; and BV ASSETS=the total assets employed by the firm, which is measured as total assets minus current liabilities. Our measure is consistent with the modified version of the formula as used by Chung and Pruitt (1994) who find that 96. 6% of the variability in the popular Lindenberg and Ross (1981) algorithm of Tobin’s Q is explained by their approximation. Our method also avoids the data availability problems which arise from using the more rigorous algorithms proposed by Lindenberg and Ross (1981) and Lewellen and Badrinath (1997) in order to estimate the replacement cost of assets. We use book values of preferred stock and long-term debt, rather than the market values proposed by Lindenberg and Ross (1981) and Lewellen and Badrinath (1997). In the UK, there is a far less active market for the trading of corporate debt than that which exists in the US, forcing us to rely on book values for these variables. In a final stratification of our sample, we mitigate the problem of potential outliers and trim 25 firms with the largest and smallest Tobin’s Q measure, leaving a final sample of 752 firms. 7 Table 1 presents descriptive statistics for our sample data. The mean managerial ownership stake of all board members is 13. 02%, which is similar to comparable US studies, but slightly lower than Faccio and Lasfer (1999) who report mean ownership of 16. 7%. Tobin’s Q is slightly higher than that reported for related US work with a mean value of 1. 96. The standard deviation of Tobin’s Q is 1. 21, which is also greater than other studies. However, it is substantially less than the mean of 2. 47 reported by Doukas et al. (2002) and is relatively similar to the mean value of 1. 86 that Short and Keasey (1999) report for their market valuation ratio. 8 The mean blockholder ownership is 37. 34% and is on a par with that reported for US firms by McConnell and Servaes (1990) (32. 4%) and 34. 57% reported by Faccio and Lasfer (1999) for UK firms. The full range of firm sizes is included in the sample with the 5 To establish the reliability of the summary ownership data, we carried out a correlation analysis of a subsample of 422 firms from he original data set of 802 companies (52. 62%) for which we were able to obtain company annual reports. The yearbook data and company accounts data exhibited a correlation of 0. 90, with a pvalue of 0. 00. We also establish the robustness of our data by re-estimating the model using data for 1997. This result is discussed later in this section. 6 Recently listed, merged or acquired firms are not included. 7 This is a larger sample than that used by Morck et al. (1988)—371 firms, Cho (1998)—326 firms and Himmelberg et al. (1999)—maximum 427 firms in any 1 year. Measured as the market value of equity divided by the book value of equity, minus any intangibles. J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 Table 1 Descriptive statistics Variable Management ownership Blockholder ownership Largest stakeholder Capital expenditures Total assets employed After tax profits less depreciation/assets employed Debt/assets employed Market value of equity Research and development Tobin’s Q Mean 13. 02% 37. 34% 18. 82% 21,221 255,642 0. 1425 0. 1411 335 2918 1. 9647 S. D. 18. 06% 23. 57% 21. 64% 75,317 1,583,274 0. 4763 0. 252 1399 44,108 1. 2092 Minimum 0. 00% 0. 00% 0. 00% 7 268 A10. 977 0. 0000 0. 68 0 0. 4502 651 Maximum 79. 90% 100. 00% 100. 00% 1,024,200 37,774,000 3. 4207 4. 8358 26,224 1,198,988 7. 0997 Managerial own ership data measures the total level of holdings held by company management that are greater than 0. 5% of a company’s equity. Blockholder data measures the total level of holdings by outside blockholders that are greater than 3% of a company’s equity. Largest stakeholder is the largest single outside blockholder that holds at least 3% of company’s outstanding equity. Capital expenditures (thousands), total assets employed (thousands), after tax profits, depreciation, leverage, equity market values (millions) and research and development costs (thousands) are collected from Datastream. Tobin’s Q is measured as the ratio of the market value of equity and book values of debt and preferred equity to the book value of assets in the firm minus current liabilities. Shareholdings data is taken from the London Stock Exchange Yearbook for 1996 and 1997. All data are for industrial companies quoted on the London Stock Exchange in 1995. mallest company having an equity market capitalization of o680,000 and the largest company’s equity valued at approximately o26 billion. The mean market capitalization of firms in the sample is o335 million. Table 2 provides the distribution of sample statistics grouped by managerial ownership. A very large proportion of the sample (62%) have managerial ownership levels less than or equal to 10%. However, a larg e fraction of companies (11%) also in the sample had boards Table 2 Breakdown of sample by managerial ownership Manager level Ownership Number of firms 464 87 75 41 34 26 21 4 Blockholder ownership, % 43. 34. 5 34. 4 24. 0 22. 7 13. 0 12. 7 5. 8 Tobin’s Q 1. 952 2. 033 1. 736 2. 109 2. 113 2. 257 1. 933 1. 808 Total assets employed 393,861 44,093 26,186 34,322 35,864 28,190 14,234 10,127 Capital expenditures/ assets employed 0. 106 0. 161 0. 124 0. 117 0. 114 0. 100 0. 099 0. 114 Liquidity 0. 130 0. 129 0. 157 0. 194 0. 194 0. 177 0. 169 0. 239 0VMOb10% 10VMOb20% 20VMOb30% 30VMOb40% 40VMOb50% 50VMOb60% 60VMOb70% 70VMOb100% Managerial ownership (MO) data measures the total level of holdings held by company management that are greater than 0. 5% of a company’s equity. Blockholder ownership measures the total level of holdings by outside blockholders that are greater than 3% of a company’s equity. Capital expenditure (thousands), total assets employed (thousands), after tax profits and equity market values (millions) are collected from Datastream. Liquidity is measured as cashflow divided by total assets employed. Tobin’s Q is measured as the ratio of the market value of equity and book values of debt and preferred equity to the book value of assets in the firm minus current liabilities. Shareholdings data is taken from the London Stock Exchange Yearbook for 1996 and 1997. All data are for industrial companies quoted on the London Stock Exchange in 1995. 652 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 Table 3 Regression results for Tobin’s Q on managerial ownership Variable Coefficient t-Statistic Adj. R 2 Intercept 1. 85 28. 14 0. 017 MO 0. 12 3. 23 MO2 A0. 013 A3. 08 F MO3 4. 63A10 2. 82 2. 651 A4 MO4 A6. 73A10 A2. 53 A6 MO5 3. 36A10A8 2. 24 The following equation was estimated using data for 752 firms listed on the London Stock Exchange during 1995. Q ? a0 ? a1 MO ? a2 MO2 ? a3 MO3 ? a4 MO4 ? a5 MO5 ? e where Q is Tobin’s Q and MO is managerial ownership. Ownership data is taken from the London Stock Exchange Yearbook and Tobin’s Q is calculated from Datastream. which owned at least 40% of all outstanding equity. As would be expected, outside blockholder ownership decreases with managerial ownership. At managerial ownership levels of 30%, blockholder ownership is slightly less at 24%. It is probable that external discipline, as provided by blockholders, would still be strong at these levels of managerial holdings, particularly where informal coalitions among blockholders are more prominent (Short and Keasey, 1999). At higher levels of managerial holdings, blockholder ownership decreases sharply leading to a collapse in the power of blockholders. Managerial ownership is a decreasing function of company size, which is consistent with Demsetz and Lehn (1985). Although firm sizes in the UK are considerably smaller than US firms, the ratios in Table 2 are similar to summary statistics provided in Morck et al. (1988), McConnell and Servaes (1990), Cho (1998) and Himmelberg et al. (1999). Table 2 also illustrates the nonlinear relationship between Tobin’s Q and managerial holdings. Visual inspection indicates two maximum points in the region of 10% to 20% and 50% to 60%, respectively. The convergence of managerial interests to those of shareholders at very high levels of ownership is not apparent at this stage because of the small number of companies with managerial holdings above 70%. However, the statistics for all other groupings are consistent with our theoretical motivation. 3. 2. Estimation of ownership breakpoints In order to model the Tobin’s Q–managerial ownership (MO) function as having two maximum and two minimum turning points, we specify a quintic function, as follows: Q ? 0 ? a1 MO ? a2 MO2 ? a3 MO3 ? a4 MO4 ? a5 MO5 ? e ? 2? For the nonlinear relationship discussed in Section 2 to be valid, the coefficients in Eq. (2) must have the following signs: a 0N0; a 1N0; a 2b0; a 3N0; a 4b0; a 5N0. The estimated values of the coefficients in Eq. (2) are given in Table 3. 9 The intercept coefficient, which is an estimate of Tobin’s Q i n firms with no managerial holdings, is 1. 85. Each slope coefficient is of the correct sign and statistically significant at the 5% level. Although the It is clear that Tobin’s Q will be in influenced by more than just managerial ownership. However, the objective of this paper is to investigate whether the standard quadratic and cubic specifications used in previous studies are too simplistic. To maintain parsimony, we therefore omit other factors from this specific model. Other relevant factors are incorporated into the analysis in a later table. 9 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 653 Estimated Relationship between Tobin's Q and Managerial Ownership 2. 40 2. 20 2. 00 1. 80 1. 60 1. 40 1. 20 0 0. 1 0. 2 0. 3 0. 4 0. 5 0. 6 0. 7 0. 8 0. 9 Tobin's Q Insider Ownership Fig. 1. Estimated relationship between Tobin’s Q and Managerial Ownership. Tobin’s Q was modelled as a quintic function of insider ownership using ordinary least squares regression. The estimated regression line is: Q=1. 85+0. 12IOA0. 013OI2+4. 63A10A4IO3A6. 73A10A6IO4+3. 36A10A8IO5. adjusted R 2 is low, it is similar to that found in comparable US studies. The use of this model as a basis to estimate managerial ownership turning points leads to four critical values: 7. 01%, 26. 0%, 51. 4%, 75. 7% and is illustrated in Fig. 1. To establish the robustness of our regression model, the spline approach as applied by Morck et al. (1988), Cho (1998) and Himmelberg et al. (1999) to estimate breakpoints was carried out using our generated turning points. Table 4 presents the coefficients resulting from the piecewise linear regression. Similar to Table 3, each coefficient has the expected sign and all but one variable is statistically significant at the 5% level. The only variable that is not significant, MOover 76% , has the correct sign. The probable cause for the lack of significance is the small number of firms in this managerial ownership grouping. An examination of these results suggests that Tobin’s Q increases in firms for managerial ownership levels up to 7% and then declines to ownership levels of 26%. This is almost identical to the turning points in Morck et al. (1988) and Himmelberg et al. (1999) (5% and 25%, respectively) and is comparable to Cho (1998), who uses breakpoints of 7% and 38%. However, it differs from the UK studies of Short and Keasey (1999) and Faccio and Lasfer (1999) who each reports two turning points of 12. 99% and 41. 99%, and 19. 68% and 54. 12%, respectively. Earlier studies limited the turning points to two but in our extension, it is clear that there are another two turning points at much higher levels of managerial ownership. It also appears that market discipline has an influence on managerial objectives up to the point where the board takes complete control (51%). Tobin’s Q then decreases until ownership levels reach 76%, after which Q increases. Denis and Sarin (1999) argue that cross-sectional studies may be subject to bias, whereby they fail to account for events with potentially large valuation consequences. 10 10 Examples of such events may include receiving a takeover bid, top management turnover, etc. 654 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 Table 4 Spline regression results for Tobin’s Q on managerial ownership Variable Coefficient t-Statistic Adj. R 2 Intercept 1. 854 28. 38 0. 012 MOup 0. 056 2. 93 to 7% MO7% to 26% MO26% 0. 0187 2. 57 2. 769 to 51% MO51% A0. 053 A1. 99 to 76% MOover 0. 624 1. 12 76% A0. 020 A2. 62 F The following equation was estimated using data for 752 firms listed on the London Stock Exchange during 1995. Q ? a0 ? a1 MOup to 7% ? a2 MO7% to 26% a3 MO26% to 51% ? a4 MO51%to 76% ? a5 MOover 76% ?e where Q is Tobin’s Q and MOup to 7%=managerial ownership if managerial ownership b7%, =7% if managerial ownershipN7%. MO7% to 26%=0 if managerial ownership b7%, =managerial ownership minus 7% if 7%bmanagerial ownershipb26%, =26% if managerial ownershipN26%. MO26% to 51%=0 if managerial ownershipb26%, =managerial ownership m inus 26% if 26%bmanagerial ownershipb51%, =51% if managerial ownershipN51%. MO51% to 76%=0 if managerial ownership b51%, =managerial ownership minus 51% if 51%bmanagerial ownershipb76%, =76% if managerial ownership N26%. MOover 76%=0 if managerial ownershipb76%, =managerial ownership minus 76% if managerial ownershipN76%. Ownership data is taken from the London Stock Exchange Yearbook and Tobin’s Q is calculated from Datastream. As a further test of robustness, we carried out the quintic analysis for managerial ownership and Tobin’s Q for the same sample of available firms in 1997. 11 Again, each coefficient was significant with the correct signs and the turning points from the estimated model were relatively stable at 7. 9%, 26. 5%, 55. 2% and 86. 2%. . 3. Endogeneity of managerial equity ownership, investment and corporate value To analyse the effects of endogeneity in the managerial ownership, investment and corporate value relationship, we follow Cho (1998) and carry out a simultaneous equations analysis using two-stage least squares. Cho (1998) and Himmelberg et al. (1999) showed that once endogeneity was controlled, the perceived impact of managerial ownership on corporate value d isappeared. Moreover, corporate value was found to positively affect levels of managerial ownership. It is possible that if the model specification employed by these studies is wrong, what appears to be a lack of statistical significance in the endogenous variables in the simultaneous equations analysis may actually be due to errors in variables arising from the intermediate regressions. We re-run the two-stage least squares analysis of Cho (1998) using our more complex specification. 12 The control variables in our regression are the same as in Cho (1998). Namely, managerial ownership, investment and corporate value are Some firms fell out of the sample because of mergers, delisting, and being taken over. Cho (1998) also attempts to control for specification error by re-estimating his simultaneous regression analysis using managerial ownership as a linear variable and again finds no relationship between managerial ownership and corporate value. However, if indeed there is a nonlinear relationship between ownership and corporate value, such an approach would fail to capture this. 12 11 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 655 defined to be endogenously determined by each other as well as some additional relevant exogenous variables. That is: Managerial Ownership ? ? market value of firm0s common equity; corporate value; investment; volatility of earnings; liquidity; industry? Corporate Value ? g? managerial ownership; investment; leverage; asset size; industry; block ownership; largest stakeholder? Investment ? h? managerial ownership; corporate value; volatility of earnings; liquidity; industry? For comparability, we define each of the above vari ables as in Cho (1998). For each company, industry dummy variables are set equal to one for each Financial Times Industry Classification (FTIC) grouping that sample firms lie within, and zero otherwise. In addition to the variables used by Cho (1998), we include blockholder ownership and largest stakeholder in the corporate value regressions to reflect the potential impact of blockholder discipline in the UK and the role of a founding or dominant individual on corporate value. All accounting and market variables are taken at the financial year-end from Datastream. In Table 5, we report results from the simultaneous equations analysis. Taking the managerial ownership regression first, all variables with the exception of investment have coefficients with the expected sign. Managerial ownership is negatively related to the market value of equity, which reflects the fact that wealth constraints and risk-aversion will prevent managers from holding substantial stakes in large firms. Firm level liquidity is shown to be positively related to managerial ownership, which is a stronger result than Cho (1998) who reported no significance for this variable. Importantly, Tobin’s Q is found to be significant and positively related to the level of managerial ownership. This is consistent with Cho (1998) but is opposed to Demsetz and Villalonga (2001), who find the opposite effect. This result suggests that managers tend to hold larger stakes in firms that are successful or have higher corporate value. This may also be indicative of successful managers benefiting from equity-related compensation policies. The investment variable, which has a negative impact on managerial ownership is surprising as theory predicts that firm level investment will be positively related to managerial ownership. Himmelberg et al. (1999) contend that firms with high investment spending will have high managerial ownership to alleviate the monitoring problem caused by discretionary managerial spending. However, Jensen (1986) argued that firms may overinvest as a result of an earnings retention conflict, rather than underinvest as Jensen and Meckling’s (1976) moral hazard theory would predict. When a firm is in this situation, managers may be able to maximise their size-related compensation by overinvesting, but are aware that this may ultimately reduce the value of their shareholdings. Although tentative, this could in part explain the negative relation between investment and ownership. Cho (1998) also finds a negative (but insignificant) coefficient on the investment variable using both capital and research and development expenditures. 56 J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 Table 5 Simultaneous equations analysis of managerial ownership, corporate value and investment Variable MVEQ Tobin’s Q Volatility Liquidity Investment Leverage Asset size Largest stakeholder Blockholder ownership MO MO2 MO3 MO4 MO5 Industry dummies Adj. R 2 F Managerial ownership A1. 8A10 (A3. 74) 0. 127 (4. 63) A1. 0A10A6 (A0. 74) 0. 035 (2. 24) A1. 314 (A2. 67) A5 Corporate value Investment 0. 073 (2. 35) 3. 89A10A6 (A2. 86) 0. 013 (1. 01) Yes 0. 045 8. 014 5. 136 (2. 23) 1. 088 (4. 36) 3. 33A10A8 (1. 17) A0. 20 (A0. 06) A0. 837 (A2. 60) 1. 588 (3. 07) A0. 395 (A2. 22) 0. 037 (1. 64) A0. 001 (A1. 14) 1. 9A10A5 (0. 76) Yes 0. 033 3. 497 A0. 035 (A0. 46) 0. 018 (0. 72) A0. 003 (A0. 92) 1. 72A10A4 (1. 03) A3. 12A10A7 (A1. 07) Yes 0. 009 2. 497 Results from a simultaneous equations analysis of managerial ownership, corporate value and investment for 752 firms, using the two-stage least squares method to estimate the following equations: Managerial Ownership ? f ? market value of firm0s common equity; corporate value; investment; volatility of earnings; liquidity; industry? CorporateValue ? g? anagerial ownership; investment; financial leverage; asset size; industry; block ownership; largest stakeholder? Investment ? h? managerial owner ship; corporate value; volatility of earnings; liquidity; industry? In the above equations, managerial ownership measures the total level of holdings held by company management that are greater than 0. 5% of a company’s equity. Blockholder data measures the total level of holdings by outside blockholders that are greater than 3% of a company’s equity. Largest stakeholder is the largest single outside blockholder that holds at least 3% of company’s outstanding equity. Investment is defined as capital expenditure divided by total assets employed, leverage is the ratio of total debt to total assets employed and liquidity is measured as cashflow divided by total assets employed. Capital expenditure, total assets employed, after tax profits, depreciation, leverage, equity market values and profit volatilities are collected from Datastream. Tobin’s Q is measured as the ratio of the market value of equity and book values of debt and preferred equity to the book value of assets in the firm minus current liabilities. Shareholdings data is taken from the London Stock Exchange Yearbook for 1996 and 1997. All data are for industrial companies quoted on the London Stock Exchange in 1995. t-Statistics are in parenthesis. The estimated coefficients from the corporate value regression are given in the second column of Table 5. Corporate value is shown to be positively related to investment and leverage. While the investment coefficient is as expected, the sign of the leverage variable requires more discussion. Morck et al. 1988) find that leverage has a negative but insignificant impact on corporate value and attribute this to the possibility of managers in highly levered firms holding a higher than average level of ownership. However consistent with our results, McConnell and Servaes (1990) report a positive significant coefficient for leverage. Leverage can have various effects on firm value. The notion that high debt levels lead to greater corporate value has been argued by Modigliani and Miller (196 3) with respect J. R. Davies et al. / Journal of Corporate Finance 11 (2005) 645–660 57 to valuable tax shields, Ross (1977) and Myers (1977) with respect to a signalling hypothesis and Jensen’s (1986) free cashflow hypothesis. Ultimately, leverage is one way of imposing external discipline on management and if it is effective, will lead to increased corporate value. Alternatively, Demsetz and Villalonga (2001) interpret a negative association between leverage and firm value as being due to relative inflation between the current time period and the earlier time period where companies had issued much of their debt. We view the most important result from the corporate value regression as being the significance of the managerial ownership variables. Our results indicate that although managerial ownership levels are determined by corporate value, corporate value itself is determined in part by managerial ownership. This finding is at odds with Cho (1998) and Himmelberg et al. (1999) but consistent with the classical view of Jensen and Meckling (1976) and empirical work by Morck et al. (1988) and McConnell and Servaes (1990). An interesting result is that blockholder ownership is shown to negatively impact Tobin’s Q. This result is consistent with Faccio and Lasfer (1999, 2000). McConnell and Servaes (1990) suggest that this could be due to a conflict of interests, which results from blockholders being forced into aligning themselves with managers so as not to jeopardize their other dealings with the firm. Alternatively, the negative coefficient may be explained by the strategic alignment hypothesis, which argues that blockholders and managers find it mutually beneficial to cooperate with each other. Finally, such findings may be consistent with the arguments of Burkart et al. 1997) in that too much block ownership will overly constrain management and reduce their ability to take value-maximising investment decisions. The investment regression coefficients presented in column three of Table 5 show a significant positive effect of corporate value on investment and a negative effect of profit volatility on investment. The finding that corporate value has a positive effect on investment is consisten t with the arguments of Cho (1998) that highly valued firms will have large investment opportunities. Also, firms with variable earnings will be reluctant to invest if future income is uncertain. Managerial ownership is found to have no impact on firm level investment. However, this may reflect optimality in that investment policy may be one way in which managers affect value, but not the only means. Ultimately we view our findings of a causal relation between ownership and firm value as being of greater significance than the lack of a relation between ownership and investment. These results are consistent with Cho (1998) but slightly stronger, in that volatility of earnings is significant in our regressions but insignificant in Cho (1998). . Conclusions Debate as to the relationship between corporate value and managerial ownership in the US is still unresolved. Studies such as Morck et al. (1988), McConnell and Servaes (1990), and Hermalin and Weisbach (1991) document a nonlinear relation between these two variables. More recent work by Cho (1998), Himmelberg et al. (1999), and Demsetz and Villalonga (2001) shows that when controlling for endogeneity, managerial ownership is determined by corporate value but not vice-versa. 658 J. R. Davies et al. Journal of Corporate Finance 11 (2005) 645–660 We argue that even accepting that corporate value and managerial ownership are endogenously related to each other, misspecification of the managerial holding–corporate value relationship may lead to spurious conclusions concerning the direction of causality. Applying a quintic structure, we present results which suggest that the correct form of this relationship is a double humped curve. This is in contrast to other studies that have assumed a cubic or quadratic specification and by construction only one hump. The second hump or local maximum is attributed to a collapse in external market discipline at or around the point where managers take overall control of their firm. At this point, which is around 50% ownership, the management is not sufficiently akin to owners but have sufficient power to disregard any form of external monitoring or discipline. This has a detrimental affect on corporate value for a short window of managerial holdings. At high levels of managerial ownership, managers are effectively majority owners of their firm leading to a convergence of interests with other outside shareholders. Utilizing the quintic specification for managerial ownership, we show that even when controlling for endogeneity, not only is corporate value a determinant of managerial ownership but managerial ownership is also a determinant of corporate value. This finding is consistent with the classical work of Jensen and Meckling (1976), as well as the early empirical work of Morck et al. (1988) and McConnell and Servaes (1990) who do not control for endogeneity in their analysis of corporate value and managerial ownership. We believe our analysis to have several important contributions to the literature on the relationship between managerial ownership and corporate value. First, our quintic specification extends previous work in this area and successfully captures the complex nonlinear relationship between corporate value and managerial ownership. Second, by analysing a completely different market which is similar in structure to the United States, we strengthen the power and insights gained from earlier comparable US studies. Third, we provide evidence that corporate value, firm level investment and managerial holdings are interdependent with each other. This has implications for the debate on the effectiveness of compensation policies involving stock options for top managers. Moreover, our findings suggest that some levels of managerial ownership may not be beneficial to outside shareholders even when these levels are high. At the very least, this paper has served to add to the debate concerning the importance of managerial ownership on corporate value by providing evidence that even controlling for endogenous effects, managerial ownership and stock compensation schemes do have a significant influence on corporate value. Our research has provided an initial step towards a more accurate characterisation of the corporate value–managerial ownership relationship. While we do not posit that our specification can be applied to every given data set, we argue that previous research may be misspecified where it has failed to fully explore alternative specifications of the managerial ownership–corporate value relationship. Future work in this area may focus on other structural forms, which more effectively reflect the interdependence of managerial ownership and corporate prospects. 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