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The purpose of this paper is to empirically investigate the Saturday effect in three emerging stock markets (Bahrain, Kuwait, and Saudi Arabia) by taking into consideration the thin trading that is normal in such capital markets.

The paper applies the stochastic dominance (SD) approach, which is not distribution‐dependent and can shed light on the utility and wealth implications of portfolio preferences by exploiting information in higher order moments, to investigate empirically the existence of the Saturday effect in the three Gulf stock markets.

The findings indicate that the Saturday effect does not manifest itself in the three Gulf stock markets and that the SD results show that the Saturday effect in these markets is not present when raw data are corrected for thin and infrequent trading.

This paper is believed to be the first to use SD approach to examine the Saturday effect.

To investigate whether acquiring firms listed in the Athens Stock Exchange, that completed mergers and acquisitions during the period 2001‐2003, tend to manipulate accounting earnings upward prior to the initiation and completion of the transaction.

The focus is on discretionary accruals as a measure of managers' earnings manipulation. To estimate discretionary and non‐discretionary components of total accruals the time series Jones model is adopted.

Results provide weak evidence of biased accruals reported by managers in the year preceding the announcement and the completion of the deal. The results seem to agree with those of Erickson and Wang who found no evidence of pre‐merger earnings management by a sample of acquiring firms that were involved in cash mergers.

The model applied, even if it is considered effective in discriminating abnormal from normal accruals, has been shown to have certain deficiencies, while simultaneously the time series data and number of firms used here could be considered as small. Within the aforementioned limitations further research could examine the effect of mergers and acquisitions in the stock price of the acquiring of target firms and the possibility of earnings management by target firms, since target managers may have different incentives to manipulate earnings.

Findings are of particular interest to Greek regulators for policy‐making purposes as well as to investors in the Greek capital market.

To the best of one's knowledge this is the first study to examine earnings management by acquiring firms in the European capital market context.

The main purpose of this study is to examine the possibility of prediction of Greek takeover targets that belong to the industrial sector, emphasizing the econometric methodology and the prediction test.

The study uses a sample of 51 targets and 290 non‐targets exclusively from Greek industry over the period 1997‐2005. In order to achieve a better predictive accuracy the paper uses a new econometric methodology, the bootstrap mixed logit and different (more advanced) techniques of prediction test and choice of cutoff values.

The results exhibit that bootstrap mixed logit has significant and valuable predictive ability with respect to the classical conditional logit model. Furthermore, the predictive accuracy is higher than the results of other studies (e.g Palepu and Espahbodi and Espahbodi).

The main contribution of this study is the application of the bootstrap mixed logit in analyzing Greek takeovers. The results change the prediction variables as well as the determinants of the takeover target characteristics for the Greek industry. This is meaningful, not only for the investors that seek to increase the value of their fortune through acquisitions, but also for the managers that can detect if their firm might be considered a takeover target.

By conducting a field research in affiliates of foreign transnational corporations (TNCs) established in Greece, this paper aims to investigate whether a different tendency of intra‐firm organization has a different impact on their profitability and earnings management policy.

The original sample consists of 82 affiliates of foreign TNCs. Using a cut off point (25 percent) indicative of intra‐firm pattern, these affiliates are divided into two categories: foreign subsidiaries with a high intra‐firm trade degree (or with intra‐firm trade >25 percent of their total trade) and foreign subsidiaries with a low intra‐firm trade degree (or with intra‐firm trade ≤25 percent of their total trade) correspondingly. The paper utilizes two econometric tests over the period 1999‐2002: first, a logit model is employed to identify possible accounting‐based performance differences related to differential degrees of intra‐firm trade. Second, the popular cross‐sectional discretionary accruals model initiated by Jones is applied in order to detect differences concerning earnings management policy between the two groups of affiliates. Based on the internalization theory of TNC, the main hypothesis is that the foreign affiliates with high intra‐firm trade degree are more likely to affect their profitability, and due to institutional specific characteristics of Greece (e.g. relatively high tax rates), they appear to have smaller profits in comparison to the other subsidiaries.

Contrary to initial predictions, the impact of intra‐firm trade on the profitability of foreign affiliates did not prove statistically significant. Results concerning the earnings management policy are similar. TNCs in general are found not to manipulate their reported earnings figure more than a neutral sample of 847 domestic companies.

The list of explanatory variables is not an exhaustive one. In further quantitative work, more complex econometric methods should be used to support findings.

Findings are of particular interest for a multiple set of stakeholders/investors active in global markets as well as for regulators in attempting to ensure the coordination of tax policies among countries. Specifically, it is important for stakeholders and investors to know to what degree the integration of the subsidiary units (they have invested in) affects their performance and differentiates the manner that profits are managed. In addition, the regulators seek to define in detail the factors that make up profits on the inside of multinational enterprises so that they can practice their policies more effectively. Moreover, the findings may be applicable to other smaller countries which resemble the Greek setting.

The paper presents two novelties. First, it discloses original information regarding the internalization of trade activities of foreign affiliates located in Greece; such information is quite rarely found in literature. Second, it is one of the first studies which combines income policy of TNCs to their intra‐firm transactions.