"Naïve

Arun Prakash

investors focus on the possible return on their investment without realizing a basic tenet in finance: if there is return, there has to be risk and vice versa," said Arun Prakash, Knight Ridder Center for Excellence in Management research professor in finance in the College of Business Administration. Prakash and Suchismita Mishra, assistant professor of finance in the College, have been looking at just what the degree of risk might be for acquiring and acquired banks.

Focusing on banks with New York Stock Exchange (NYSE) profiles—for which trade data are available—the two researchers examined information from a three-year period to measure exactly what the risk is for bank mergers and acquisitions. Their contribution is important in part because of their shift in perspective.

"Other

Suchismita Mishra

studies have looked mostly at the return side of the issue," said Mishra. "We focused on the other component of the equation: risk."

As they had expected, the impact on the acquired—or target—bank was usually positive, since such entities typically are in trouble.

"An earlier study that looked at the return side of the equation for fifty or more banks found that the return was always positive for the target bank," Prakash said. "In forty percent of the cases, there was value reduction for the acquiring firms. More refined research that followed showed about 26 percent value reduction for the acquiring firm, thirty percent remaining the same, and the remainder benefiting."

When Prakash, Mishra, and two collaborators looked at risk, they found similar results. In an article titled "Risk Diversification as a Motive for Bank Mergers," published in the International Journal of Finance, they evaluated data from thirty banks before and after an acquisition. They kept their focus on banks acquired through stock versus other methods, such as leveraged buy-out using debt, as well as on banks of sufficient asset size to make the NYSE list.

"True to our expectations, there was no clear-cut indication of risk," Prakash said.

Of course, there is a significant challenge in such a study: once a bank has been acquired, it no longer exists. Therefore, it's difficult to assemble data on it. But, in one of those exciting research breakthroughs, the researchers devised a way to compute risk to the banks before and after an acquisition—even though the targeted bank was gone.

In the recently-published "Bank Mergers and Components of Risk: An Evaluation" in the Journal of Economics and Finance, they applied their approach for looking at both target and acquiring banks.

"In this analysis, we saw that risk actually decreased," Mishra said. "The acquired bank improved in terms of risk, which accorded with the earlier study that had focused on return."

The research has far-reaching practical applications.

"Often, merger and acquisition decisions are made in a ‘seat of the pants' manner," Prakash said. "We looked at quantifiable risk factors and showed that the merger and acquisition tactic is good for both the target and acquiring firm."

FOCUS ON

.: Real Estate Awards Luncheon features Frank Kowalski.

The

Frank Kowalski

FIU Real Estate Alumni Affinity Council (REAAC), in partnership with The Jerome Bain Real Estate Institute and the FIU Real Estate Student Association, hosted the Fifth Annual Real Estate Awards Luncheon on October 7th, 2005, at the Bankers Club in Downtown Miami. More than 100 alumni and real estate professionals gathered at this networking event to honor leaders in real estate who have supported the University's Real Estate programs and the Institute throughout the past 2004-2005 academic year.

The event featured keynote speaker, Frank Kowalski, president of the Association of REALTORS®, who discussed the "The Future of South Florida's Real Estate Market."

The goal shared by Kowalski and his 2005 leadership team is to help Florida REALTORS® prosper, grow their businesses, and gain even more value from their association memberships—a goal accomplished only by a "team effort". Kowalski is a firm believer in the strength and value of "TEAM," reflected in his motto, "Together Everyone Achieves More!"

.: Alumni Circle plans to tackle new projects.

Members of the College's Alumni Circle will be dividing into sub-committees to work on two new initiatives---a community service project to affect an educational non-profit organization and the development of a new "Business Readiness Unit," which will be added to the College's portfolio of undergraduate student services.

Circle members will be gathering in November to initiate discussions and formulate plans for both of these projects.

"I look to the Circle to engage in projects such as these that will directly benefit students in our surrounding community," said Executive Dean Joyce J. Elam. "I'm quite excited to see what the Circle will propose we develop and/or do to strengthen our students' readiness to enter the workforce and become successful, community-minded citizens. As active members of our business community, our Circle members will help us determine how we can work with our students to make this happen even more effectively than it does now."

.: Business Alumni Chapter's Tarpon Bend Happy Hour builds connections among members.

Phoebe Fellows; Bill Wllson (BBA '04; MBA candidate), Chapman School representative on Business Alumni Chapter Board; and Heather Freeland (BBA '00; MBA '03) enjoy Happy Hour event.

The College's Busines Alumni Chapter held yet another successful "Traveling Happy Hour" on October 20th with more than seventy alumni mingling at Tarpon Bend in Coral Gables. Alumni and guests enjoyed complimentary drinks and appetizers from the event's participating sponsors, Bacardi and Tarpon Bend. This is the second event of the networking series which are held the third Thursday of every month at upscale locations in the Brickell Avenue community and the heart of Coral Gables.

"It's a great way to network with fellow alumni and business people in the South Florida area and keep in contact with the University," said Alison Hegedus (BBA '98), market research analyst at AvMed Health Plans.

Alumni not only "travel" throughout chic locations, but also, members of the Business Alumni Chapter are automatically entered into a raffle to win fabulous travel prizes, including two airline tickets to anywhere in the U.S. courtesy of TraveLeaders.

Each time members attend a Traveling Happy Hour event, they are entered into the drawing. Prizes will be raffled at the conclusion of the series. For those who are not yet members, membership forms are available at http://cbalumni.fiu.edu/. Next month's Traveling Happy Hour will be on November 17th at Mendoza Restaurant (1155 Brickell Bay Drive—Brickell and 12st on the Bay).

.: Alumni support Chapman School recruiting in World MBA Tour.

Josh McLeod (EMBA '03)

Josh McLeod (EMBA '03), who resides in Dallas, Texas, happened to be in Houston on business and stayed an extra day to volunteer at the Chapman School's booth for the World MBA Tour stop there on October 1st.

Romina Zelezniak (IMBA '03)

Romina Zelezniak (IMBA '03) helped the Chapman team at its booth in Buenos Aires, and Oscar Vásquez, Eduardo Gutt, and Daniel Quiñones, all from the IMBA '04 class, helped sell graduate programs in Caracas.

Oscar Vásquez (IMBA '04), Eduardo Gutt (IMBA '04), and Daniel Quiñones (IMBA '04)

Susanne Gstattenbauer (MBA '04)

Susanne Gstattenbauer (MBA '04) also served as an alumni ambassador at the World MBA Tour in Frankfurt.

.: Come out and support FIU Football!

Get ready to roar!! Show your support for the FIU Golden Panthers on November 19th at 6:00 p.m. as the Panthers face Western Kentucky. All FIU alumni, students, faculty, staff, friends, and fans gain free entry to our air-conditioned alumni tent—The Panther Pit.

Come out and enjoy food, refreshments, free giveaways, visits from Roary the University's Mascot, the Marching Band, and more. Activities are planned for kids and adults, so everyone's invited. Alumni Association and Panther Athletic Club members will receive discounts on food and games. Get your game face on at an Alumni Association Panther Pit tailgate party starting at 4:00 PM.

• Alfredo Machado (MBA '02), Business Alumni Chapter vice president of membership, has been named vice president of marketing of the South Florida Chapter of the National Society of Hispanic MBAs.

• Osvaldo "Ozzie" Dominguez (BBA '91), general manager, Dadeland Mall and College of Business Administration Alumni Circle member, was featured in Miami Today in “The Achiever” profile the week of October 20th. Dominguez' personal philosophy: “Live life to its fullest. Always help others. All the goodness you give out will come back to you.”

• Ernesto Larrea (MIB '89) has been named vice president of correspondent banking by International Bank of Miami (TIBOM). Before joining TIBOM, he served as manager of correspondent banking with Banco Internacional de Costa Rica's Miami office for 12 years, where he was responsible for managing relationships with financial institutions in Central America, the Caribbean, and South America.

• Joseph Marchese (BBA '80) has joined Regions Bank as a senior vice president in corporate banking. He will be responsible for developing and maintaining relationships with companies that have revenues in excess of $100 million.

Have you been promoted or changed jobs? Update your information.

Steven M. Berwick (BACC '74), Kaufman, Rossin & Co.

College of Business Administration alumni at Kaufman, Rossin & Co., one of Florida's largest independent accounting firms, and at IKON Office Solutions, Florida International University's office solutions partner, have shown their commitment to the College by securing gifts for the Building for Business Campaign.The generous donations—when matched by the state—will yield $200,000 for the Building Complex Fund in the Campaign.

Alumni at Kaufman, Rossin & Co. joined together to raise $50,000. Steven M. Berwick (BACC '74), CPA, a Kaufman, Rossin & Co. principal and College alumnus, led the effort. He raised $25,000 in personal contributions from other College alumni—of whom there are more than forty—for the Campaign. He also arranged a $25,000 match from the firm.

Under the terms of the donation, the State of Florida Capital Facilities Trust Fund must match Kaufman, Rossin & Co.'s gift, bringing the total value of the contribution to $100,000. A large room on the new building'complex's ground floor will be named "The Kaufman, Rossin & Co. Study Room" in recognition of the contribution.

"When I saw a presentation about the building and the menu of items that we could fund, I got very interested," said Berwick, who is a member of the University's Council of 100 and of the School of Accounting's advisory board.

Berwick worked with the firm's marketing director on an e-mail message to the company's known alumni that generated an overwhelmingly enthusiastic response.

"People really value the resource of having Florida International University in the community and wanted to demonstrate that," Berwick said. "Also, leaders within the firm contributed, and that spurred others to do the same."

College

Elizabeth Cameron Parnes

alumnae Elizabeth Cameron Parnes (BBA '77), regional vice president of IKON, added a new element to the company's partnership with the University by securing a $50,000 gift from IKON (totaling $100,000 with the state match) to support the Campaign. A large study room off the main lobby of Commons Hall will carry the name "IKON Office Solutions Study Room" in acknowledgment of the donation.

"IKON was already an important University partner," said George Corton, director of development, College of Law. "They recruit our students and they provide us with copying and printing services."

"Being in a partnership isn't always about receiving. It's also about giving," said Parnes, who holds a degree in business administration with a marketing major. "Creating a legacy is an important way to give back to the University and to the community."

In addition to the business partnership, IKON links tightly to the University because of a shared commitment to diversity.

"IKON has been recognized nationally for its diversity, and diversity is also key at Florida International University and in the College," Parnes said. "Our donation is a way to support the University in this important area."

As a proud alumnae, Parnes also is eager to see that the College has support for student programs and initiatives and that its reputation continues to grow.

"The College is a fine place for learning," she said, "but there also is the matter of prestige and image, both of which an endowment helps build."

.: Chapman School expands its focus on China.

José

José de la Torre

de la Torre, dean of the Chapman Graduate School of Business at Florida International University, recently returned from a six-day trip to China where he met with officials from several business schools to discuss possible joint programs. Preliminary proposals with the Graduate School of Business at Nankai University, located in Tianjin, and the International Business College of Qingdao University, in Qingdao, have been drafted.

"A number of programs could develop, although we have not yet agreed upon them, and once we do, the details will need to be worked out," de la Torre said.

The principals are looking at collaboration in the areas of dual degrees, joint MBA programs, executive education programs, summer study-abroad courses, language courses for Chapman students in China, study-abroad courses at the Chapman School for students from Nankai or Qingdao, and other related joint activities.

Among the ideas under consideration:

• A four-day session in Miami followed by a brief tour of two Latin American countries (organized in partnership with the School's partner universities in Latin America) for Chinese executives interested in learning about Latin America

• A three-month study period at a Chinese university for students in the Chapman School's International MBA (IMBA) program

• An opportunity for IMBA students to study Chinese and learn about a company at which they would then intern for one month

• An opportunity for a number of students from the Chinese universities to come to the College for the Chapman School's MBA or Master of International Business (MIB) programs

De la Torre also met with officials from a number of agencies, commissions, and companies and with representatives from the National Office for Teaching Chinese as a Foreign Language, located in Beijing.

"We have put in a proposal with the Chinese government to be the recipient of one of their Confucius Institutes, which would dramatically increase our resources for teaching Chinese language and culture," he said. "Also, we already have submitted a proposal for a full-time professor of Chinese. We will share half the funding with the College of Arts and Sciences and will be asking for external support to fund the other half. The presence of this full-time professor will be an important part of our effort to move a Chinese program to the University."

In August, 2005, the School launched a China track in its International MBA program. The option gives students the chance to study Mandarin while they take their IMBA coursework and to have a three-month study-abroad opportunity in China. For more information about the IMBA China track, contact Paola Moreno, program manager, at 305-348-6880 or e-mail morenop@fiu.edu.

.: Stellar panel of entrepreneurs sheds light on Hispanic marketing.

Alan Carsrud and Sebastian Aroca

Bring together a distinguished group of entrepreneurs, powerhouse sponsors, a hospitable setting, and an audience of about 85 local entrepreneurs, members of local Hispanic businesses, and many college students, and something exciting is bound to happen.

It did—at the second annual Ford Motor Company Mi Negocio Boardroom titled "Hispanic Marketing: A Key Component for Entrepreneurial Success." The symposium was held in conjunction with AOL Latino and the Eugenio Pino and Family Global Entrepreneurship Center on the Florida International University campus.

"We were approached by Ford and AOL Latino to be the academic sponsor this year, which was a great honor for us," said Alan Carsrud, executive director of the Pino Center, who moderated the panel. "Together we will help the Hispanic community in South Florida seize the entrepreneurial opportunities available to them."

Keynote panelist was Armando Ojeda, Ford Motor Company, director of supplier diversity development.

"The Mi Negocio web site and Boardroom Series deepens our historic relationship and ongoing dialogue with Hispanic entrepreneurs," he said. "We are proud to partner with the Pino Center to help Hispanic entrepreneurs access the resources they need to succeed."

Panelists were Richard Bull, EMI US Latin, vice president of marketing; Sam Verdeja, Hispanic Publishing Associates, CEO and publisher; Grace Villamayor, Hertz International, director of sales and marketing for Latin America, Mexico, and Caribbean; and Xavier Serbia, Xavier Serbia Multimedia, financial analyst and founder.

"I'm proud to be part of this event, working with entrepreneurial leaders like Ford and Florida International University," said Serbia, who serves on the Ford Mi Negocio panel of advisors. "Both organizations have worked to strengthen, empower, and expand Hispanic businesses across America with specially-designed services and resources."

Sebastian Aroca, a Master of International Business student in the College of Business Administration's Chapman Graduate School, was enthusiastic about the experience.

"The event enriched my knowledge of the Latino market and its various segments," he said. "I also got helpful tips about how to tap into this emerging market successfully. I was very pleased, too, to see companies such as Ford and AOL getting so involved with the local Hispanic community—a sign of both social responsibility and wisdom."

A special five-some also was in attendance: the finalists of the El Visionario competition. This online contest, sponsored by Ford Motor Company and AOL Latino, seeks to identify Hispanic small business owners who embody the entrepreneurial spirit and who demonstrate the progress of Hispanics in conceiving and running successful small businesses. The winner will be announced the week of November 15th.

.: Fall advisory board meetings provide lively forum for vital input.

Members of the College's prestigious Dean's Council met on October 11, 2005, at the new Downtown Center at Macy*s. Hosted by Council member N. K. Tripathy, president, Macy*s Florida, the group was given updates about the College of Business Administration from Executive Dean Joyce J. Elam and about its Building for Business Campaign by Annabelle Rojas, director, External Relations and Resource Development for the College. Discussion focused on the College's strategic planning process, re-affirmation of accreditation preparations, and issues related to the College's funding and staffing challenges in light of the University's proposed strategic priorities.

Dennis Klinger, vice president and CIO of Florida Power and Light, gave an insightful overview of the energy industry from his firm's perspective.

Several of the Chapman Graduate School of Business's advisory boards—business experts who share tactical and strategic experience with decision-makers in the College—also have been busily involved in their fall round of meetings. The Master of Science-Management Information Systems (MS-MIS) and the Executive Master of Business Administration (EMBA) advisory boards held their sessions in October. The International MBA (IMBA), the Jamaica MBA in Human Resources Management (Jamaica MBA-HRM), and the Master of Science International Real Estate (MS-IRE) advisory board meetings are slated for November.

At a highly productive afternoon session, the MS-MIS advisory board worked through a packed agenda. A number of Chapman School staff members made presentations—spanning internships and mentoring to College accreditation and assurance of learning. Both José de la Torre, dean of the School, and Irma Becerra-Fernandez, associate professor of decision sciences and information systems and faculty director of the MS-MIS program, provided updates. Forty-five-minute breakout sessions examined recruiting and marketing, scholarships, and developed a profile of the ideal student.

"To continue to attract talented students, Dean de la Torre wants to create an endowment," said Natalia Echeverría, corporate relations manager for the Chapman School. "So, scholarships played an important part in his presentation and in the team breakouts."

The intense working schedule was followed by a reception on the terrace of the Biltmore Hotel, affording MS-MIS alumni, students, faculty, and board members the chance to network and socialize.

The EMBA advisory board held a breakfast meeting in the MARC building on the University Park campus. It was the board's second gathering. Two key items were up for discussion: how to structure the program's schedule of electives and how to market and recruit students for the program.

"Board members decided to let the faculty and staff resolve the electives matter," Echeverría said. "They focused instead on the marketing and recruiting issues, which prompted a passionate dialogue."

"We approached the question in the same way we'd approach a business problem, making a business case out of the challenge," said Luis Tapanes, program manager at Beckman Coulter. "Our group includes people with extensive leadership and business skills and a great variety of experience. Because of that variety, we looked at the same information in many different ways and came up with a number of ideas to explore further."

IN THE COMMUNITY

.: College contingent plays active role at NSHMBA Conference and Career Expo.

A sixteen-person delegation from the

Liberato Martinez III

College was a prominent force at the 16th Annual National Society of Hispanic MBAs (NSHBMA) Conference and Career Expo, held recently at the Anaheim Convention Center in Anaheim, CA. NSHMBA's mission is to foster Hispanic leadership through graduate management education and professional development to improve society.

Executive Dean Joyce J. Elam emceed a Bank of America (BOA)/ College of Business Administration pre-conference executive reception and dinner at which Liberato Martinez III, BOA senior vice president, Los Angeles Mid Cities Market, and Elam both spoke.

"It is interesting that Liberato has many of the same characteristics as our students," Elam said. "He was the first of his generation to attend college; his parents immigrated to California from Mexico. Also, he worked his way through school like many of our students do. Today, he is a senior executive at Bank of America. He is an excellent role model for aspiring Hispanic students."

Named to NSHMBA's Corporate Advisory Board in 2002, Elam's presence greatly benefits the College's students.

"Because of our special position among business schools serving a largely Hispanic student body, we take our role of preparing the next generation of Hispanic business leaders very seriously," she said. "As a member of NHSMBA's Fortune 500 Corporate Advisory Board, my administrative team and I have been able to educate many large, multinational corporations about the quality of our students. Consequently, we've been able to expand considerably the career opportunities that are now available to them."

Four staff members of the Chapman Graduate School of Business—Barry Shiflett, director, graduate career management services; Lourdes Herrero-Matus, manger of the Downtown MBA program and the Downtown Center; Ellie Browner, Chapman School director of admissions; and Natalia Echeverría, Chapman corporate relations manager—also raised awareness about what the School has to offer.

"The Chapman School is first in the United States in the number of Hispanics earning graduate degrees in business," Echeverría said. "We wanted companies—such as Bank of America, American Express, Target, and Coors—to know about our programs and about the quality of our students. We also wanted to entice recruiters to come to campus."

Eleven students, all of whom received all-expense paid scholarships based on criteria set out by Shiflett, were there to market themselves, to practice interviewing, and to meet with recruiters from Fortune 500 companies.

"One of the advantages of the conference is that recruiters who can make the hiring decisions attend," Echeverría said. "Chapman staff members helped match our students to appropriate recruiters."

Unlike many of the universities present, the College was front and center on the Expo floor, sharing a spectacular booth with Bank of America.