Lifting Limits on Market Access and Operation of Foreign Investment Enterprises in Beijing

The municipality lifts limits on market access and operation of foreign investment enterprises in Beijing so that the foreign investors don't need to submit a credit certificate for registration any longer.     

Does Investment Horizon Matter? Disentangling the Effect of Institutional Herding on Stock Prices

This study finds that, over short horizons, herding by short‐term institutions promotes price discovery. In contrast, herding by long‐term institutions drives stock prices away from fundamentals over the same periods. Furthermore, while the positive predictability of short‐term institutional herding for stock prices is more pronounced for small stocks and stocks with high growth opportunities, the negative association between long‐term institutional herding and stock prices is stronger for stocks whose valuations are highly uncertain and subjective. Finally, we show that the destabilizing effect of institutional herding persistence documented in the recent literature is entirely driven by persistent herding by long‐term institutions.     

The Impact of Business Groups on Investment Efficiency: Does Capital Allocation Matter?

Using data on internal capital markets in China, this paper examines the influence of internal capital markets on investment efficiency in business groups. The empirical results show that using internal capital markets can alleviate over invests within business groups. In addition, it can alleviate deficiencies in R&D investment in business groups effectively. The impact of internal capital markets on investment efficiency varies between state-owned enterprises and private enterprises. At private enterprises, internal capital market operations significantly alleviate overinvestment and promote R&D investment. However, at state-owned enterprises, internal capital market operations increase overinvestment and reduce investment in R&D.     

Are Investment Banks Special Too? Evidence on Relationship‐Specific Capital in Investment Bank Services

The question of whether optimal provision of these services comes mainly from established relationships between banks and client firms or can result from arms'‐length market transactions has been the topic of considerable recent debate. This discussion has paralleled the debate in the commercial banking literature on the “specialness” of banks and whether lending can and should be relational or purely transactional. Whether the provision of investment bank services is relationship‐based or transactional is especially relevant now thanks to recent trends that have blurred the distinction between commercial and investment banks, and changed the competitive landscape for investment bank services. In their study summarized in this article, the authors examine whether investment bank‐client relationships create valuable relationship‐specific capital using stock market evidence from the period surrounding the collapse of Lehman Brothers. Specifically, they studied the effect of the Lehman collapse on companies that used Lehman for (1) underwriting equity offerings, (2) underwriting debt offerings, (3) advice on mergers and acquisitions, (4) analyst research services, and (5) market‐making services. The study addressed two specific questions. First, which investment bank services, if any, are associated with the creation of relationship‐specific capital; and second, what are the value drivers of this relationship capital? The authors report finding that companies that used Lehman as lead underwriter for public equity offerings experienced significantly negative abnormal stock returns in the days surrounding Lehman's bankruptcy announcement. By contrast, they find no significant reaction to the announcement for Lehman's debt underwriting clients or any of the other client categories they examine. While most of these investment bank services have at least the potential to create relationship‐specific capital, the authors' findings suggest that except for equity underwriting, all the other investment bank services appear to be transactional rather than relationship‐based, at least in the average case. Moreover, the authors report significant differences even among different groups of Lehman's equity underwriting clients. An equity underwriting relationship with Lehman appears to have been especially valuable for smaller, younger, and more financially constrained firms—those firms which presumably had a high degree of dependence on Lehman to access the capital market.     

Why Invest in Your Neighbor? Social Contract on Educational Investment

It may be in the interestof low-ability individuals to subsidize the education of high-abilityindividuals. The sufficient conditions are surprisingly mild:positive externalities in education and complementarity in productionbetween human capital and labor supplied by the low-ability individuals.However, tax competition and the free mobility of the educatedgive rise to time-inconsistency and free-riding problems whichrender such a social contract infeasible and result in a suboptimallylow investment in education.     

Analysis and Suggestions of Rapid Development of China＇s Investment Immigration

我国正掀起改革开放以来的第三拨移民高潮,这拨移民高潮又称新世纪移民潮,其主力由新富阶层和知识精英组成,通过留学、技术移民或投资移民等方式移居海外。其中,投资移民与金融、地产投资等关系密切,逐步形成了一个跨行业的新产业链。本文对投资移民及金融参与的问题进行调查,分析投资移民资金转移路径与实质,实步探讨金融介入的情况,对规范投资移民行为及其整个产业链运作提出建议,以供决策参考。     

Risky IPTV Investment

IPTV （Internet Protocol television） is a frequently mentioned word recently, since Shanda changes its main business to IPTV, which isrecognized as a new technology and at- tractive business in the future. Shanda is the most active Chinese online game pioneer, it has produced one trail box, which will be used as the host while traditional TV station as terminal of the IPTV. Shanda hopes that the box＇s development and the family entertainment service operation will boost its revenue and help to recover the investors＇ confidence. It is estimated that Shanda has spend about $450 millions on IPTV in the last year, including production research and sales channel establishment. However, it is reported that the box is of poor quality. Even the internal trial members complained about the box＇s unsatisfactory performance. In addition, the price of the box is about 6,000 RMB each （equivalent US $ 800）, it is too expen-sive to most Chinese consumers.     

Investment bank monitoring and bonding of security analysts’ research

We assess investment banks’ influence over the agreement between their analysts’ research behavior and their clients’ interests, in the post-reform era. Competing banks discipline their analysts with worse career outcomes for producing biased reports, issuing shirking reports, and for involvement in the earnings guidance game, showing meaningful monitoring of their analysts. Highly reputable banks provide more monitoring discipline of their analysts and bonding of their moral hazard than other banks. The findings agree with the banks taking responsibility for aligning analysts’ behavior with clients’ interests.     

What is an Investment Project's Implied Rate of Return?

How to measure a project's implied rate of return has long been an unresolved problem, except for some special cases. This paper derives return on present cost (ROPC) as the correct measure of an investment project's implied rate of return. The IRR is a biased measure except for projects classified as simple projects, and this bias is likely to be substantial in many real‐world applications. Thus while net present values should be used to determine whether to accept/reject projects, I recommend that analysts use ROPC in place of the IRR as a measure of a project's true rate of return.     

Investment impact of tax loss treatment—empirical insights from a panel of multinationals

We analyze the impact of tax loss treatment on multinational investment. Basically, two effects of tax loss treatment can be expected. First, firms make their investment decisions considering potential future losses. Then, the various types of conceivable loss offset provisions affect investment decisions. Secondly, existing loss carryforwards resulting from losses in the past affect the tax rate elasticity of current investment decisions. Our empirical analysis is based on data of German multinationals. We pay particular attention to industries having a high probability to make losses. Our regression results suggest that a short carryforward time limit lowers investment in particular for firms with a high loss probability. We only find mixed evidence that group loss offsetting provisions foster investment. Concerning the effects of existing losses carried forward, we find a reduced tax rate elasticity of investment for companies shielded by loss carryforwards.     

Investment Trends投资风标

AX Trading Group获2000万美元融资
　　2016年10月27日，AX Trading Group,Inc.宣布达成一项协议，获得2000万美元投资。投资的来源和条款未披露。此项交易是该公司拓展全球市场地位的一系列预期战略举措的第一步。这项投资将让AX能够将其全球技术业务版图扩大至欧洲和亚洲。利用专有的AX技术，全球各地的市场参与者可以高效地取得流动性，同时降低成本。AX Trading Network（AX交易网络）是市场首个“电子交易网络”(E T N)，让机构交易者能够在一个安全的环境下与其它交易对手积极联系和交易。     

Investment Trends投资风标

华润啤酒付出16亿美元控股雪花2016年10月11日，华润啤酒宣布，已完成对南非米勒所持雪花啤酒49%股权的收购，华润雪花啤酒成为该公司的全资附属公司。为此，华润啤酒付出了16亿美元的代价。两大巨头的合并，诞生了一个全球啤酒市场份额达30%的巨无霸企业。百威英博的官方资料显示，合并后的公司仍然叫百威英博。2015年11月，这起“世纪大并购”对外宣布，随后，剧情跌宕、持续上演近一年。到了2016年7月29日，中国商务部有条件批准并购交易，使得相应审批条件基本满足。     

投资风标Investment Trends

据华尔街日报援引知情人士消息,大众点评网近日已获得8.5亿美元投资,本轮融资对大众点评的估值达40.5亿美元,融资规模居中国创业公司第二位,仅次于小米的11亿美元。据悉,本轮融资的投资者包括小米、腾讯、淡马锡控股、万达集团和复星集团。随着生活服务O2O的发展进程,大众点评在各条业务线的脚步也开始加快。此前,大众点评负责人表示,大众点评2015年的目标交易额为人民币700亿元,收入目标为人民币20亿元。     

What's in a Name? An Experimental Examination of Investment Behavior

A fundamental unresolved issue is whether information asymmetries underlie investors predisposition to invest close to home (i.e., domestically or locally). We conduct experiments in the United States and Canada to investigate agents portfolio allocation decisions, controlling for the availability of information. Providing participants with information about a firms home base, without disclosing its specific identity, is not sufficient to change investment behavior. Rather, participants need to know a firms name and home base. Additional evidence indicates that participants have a greater perceived familiarity with local and domestic securities and, in turn, invest more in such securities.The authors thank Ann Gillette, Josef Zechner (the editor), and two anonymous referees for helpful comments and acknowledge the financial support of the Federal Reserve Bank of Atlanta, Georgia Tech, and Social Sciences and Humanities Research Council of Canada. The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.     

What is the Economic Cost of the Investment Home Bias?

Overinvesting domestically is well known as an investment home bias (IHB). We define an economic home bias (EHB), whereby the IHB measures the investment weights and the EHB measures the economic cost induced by the IHB. We may have a large IHB and a negligible EHB. With the increase in the average correlation between foreign markets from 0.4 for the decade ending in 1988 to about 0.9 for more recent decades, the U.S. EHB is becoming negligible despite the domestic investment of 77.5%. Since 2009, the correlations have decreased, indicating that the HB puzzle is emerging once again.     

How Does Financing Impact Investment? The Role of Debt Covenants

We identify a specific channel (debt covenants) and the corresponding mechanism (transfer of control rights) through which financing frictions impact corporate investment. Using a regression discontinuity design, we show that capital investment declines sharply following a financial covenant violation, when creditors use the threat of accelerating the loan to intervene in management. Further, the reduction in investment is concentrated in situations in which agency and information problems are relatively more severe, highlighting how the state‐contingent allocation of control rights can help mitigate investment distortions arising from financing frictions.     

Picking Winners? Investment Consultants’ Recommendations of Fund Managers

Investment consultants advise institutional investors on their choice of fund manager. Focusing on U.S. actively managed equity funds, we analyze the factors that drive consultants’ recommendations, what impact these recommendations have on flows, and how well the recommended funds perform. We find that investment consultants’ recommendations of funds are driven largely by soft factors, rather than the funds’ past performance, and that their recommendations have a significant effect on fund flows. However, we find no evidence that these recommendations add value, suggesting that the search for winners, encouraged and guided by investment consultants, is fruitless.     

Investment service providers gaining competitive advantage by focusing on consumers’ varying investment goals

Laddering data collected from 95 individuals and network analysis were used to reveal and identify 747 linkages among 33 content-analysed goals as reasons for investing in individual stocks, mutual funds and/or voluntary pension plans. The results suggest that consumers’ goals associated with investments are: (i) besides economic, also functional, emotional and symbolic; and (ii) influenced by the type of investment product under evaluation rather than being independent of the investment alternatives. The article presents guidelines for investment service providers on: (i) how to provide facilities that support consumers’ investment-related goals; and (ii) how to encourage consumers to take an active role in customising and personalising their investment practices when using these facilities. Thus, economic and functional but also – and especially – emotional and symbolic goals of investing give insight into these strategic decisions that enable investment service providers to deliver value to consumers. While economic, functional, emotional and symbolic goals are well established in consumer research literature, these elements contribute to a novel understanding of the drivers underlying investment in general and the differences in distinct product categories in particular.     

What Moves Investment Growth?

We use accounting identities to decompose unexpected changes in investment growth into surprises to current cash‐flow growth and stock returns, and revisions of expectations about future cash‐flow growth and future discount rates. Using a vector autoregressive model we find that current cash‐flow surprises account for the largest element of the variance decomposition. Investment growth and current cash‐flow surprises are negatively correlated with news about future cash‐flow growth, which can be expected from persistent productivity shocks and decreasing returns to scale. We find little evidence of a discount rate channel for investment since return terms are small and have unintuitive signs.