Market integration between conventional and Islamic stock prices

The paper assesses the market integration between conventional and Islamic stock prices from the long- and short-run perspectives for France, Indonesia, the UK and the US from September 8, 2008 to September 6, 2013 using various econometric approaches. The results show long-run relationships for all countries, except for the UK where there is no cointegration between conventional and Islamic stock prices. These findings suggest that the Islamic finance industry in the considered economies (except the UK) does not seem to be compliant to Islamic law's maxims, which hinders portfolio managers and market participants to benefit from the opportunities of international diversification and hedging effectiveness. From the correlation perspective, there is evidence of weak linkages between the Indonesian market and the developed markets for both conventional and Islamic stock prices, thus suggesting that investors can diversify their portfolios at the international level to minimize risk. However, there is high connection between the developed markets for both conventional and Islamic indexes. In addition, for each economy, the Islamic index is found to be strongly linked with its conventional counterpart. The structural change analysis reveals common break dates for several cross correlations, thus reflecting the similar time-paths of the interactions between markets. The presence of breaks in the inter-market linkages has important implications for international investors as regards portfolio diversification benefits and for financial policy makers regarding contagion risks and market policies.     

Should managerial delegation contracts be made before or after union wage setting? A game‐theoretic analysis

This paper analyzes a multiple‐stage game in which, at the final stage, two (managerial) firms compete over quantities in the product market. Prior to this stage, firm‐specific unions set the workers' wages, while the owners of both firms hire managers and provide them with incentive contracts. Owners can freely decide to arrange the managerial contract before or after the (non‐managerial) wage determination stage. Hence, the endogenous choice of the incentive contract stage is derived. The possibility of multiple equilibria arises, where both owners choose managerial contracts before or after unions' wage setting, crucially depending on unions' preferences. Such results also prove to be true for a remarkable degree of asymmetry in preferences over wages vis‐à‐vis employment across unions.     

The Effects of Incentive Mechanism on Knowledge Management Performance in China: The Moderating Role of Knowledge Attributes

Knowledge management of a new product development project team is critical for a firm's competitive advantage, and incentive mechanism is one of the most effective knowledge management drives. In this paper, we examined the effects of non‐financial incentive and team‐based financial incentive on knowledge management performance in China and identified the moderating effects of knowledge attributes (codifiability and teachability). Our findings indicate that non‐financial incentive and team‐based financial incentive have positive effects on knowledge management performance. Codifiability and teachability enhance the team‐based financial incentive–knowledge management performance relationship. Finally, implications for research and practice are discussed.     

The Economic Consequences of Increased Disclosure: Evidence from Cross-Listings of Chinese Firms

In this paper, we investigate the impact of cross‐listings on information asymmetry risk, the cost of capital and firm value of a group of cross‐listed Chinese companies. Our paper is the first to examine the effect of cross‐listing on information asymmetry risk. Because cross‐listed firms are subject to increased disclosure requirements, increased regulatory scrutiny and increased legal liability, we propose that Chinese cross‐listed firms have lower information asymmetry risk, lower cost of capital and higher firm value than their non‐cross‐listed counterparts. We find in both univariate and multivariate tests that cross‐listed firms enjoyed lower information asymmetry risk in the domestic market compared with the non‐cross‐listed firms. We also find that cross‐listed firms have lower cost of capital in the cross‐listing market than non‐cross‐listed firms in the domestic markets. Finally, we find that cross‐listed firms are associated with higher firm value as measured by Tobin's Q. These results have implications for international investors and companies seeking cross‐listing opportunities.     

Firm Experience and Market Entry by Venture Capital Firms (1962–2004)

In this paper, we examine a firm's decision to enter new markets as related to the depth and breadth of its experience and the relative distance of those markets. We situate our discussion and analysis in the context of the venture capital (VC) industry, and examine whether and when US VC firms enter five high‐technology investment markets through first‐ or later‐round investments. This setting allows us to observe both the firms that chose to enter a new market and those that did not, and analyse the antecedents of these decisions. We find that VC firms overall are less likely to enter distant markets; those with broader experience are more likely to make first‐round entries. In addition, VC firms with deeper investment experience are more likely to make first‐round entries in proximate markets and less likely to enter distant markets and make later‐round entries. These results offer interesting implications for the literature on organizational learning and entrepreneurship.     

Customer Information Sharing: Strategic Incentives and New Implications

We study oligopolistic firms' incentives to share customer information about past purchase history when firms are uncertain about whether a particular consumer considers the product offerings as complements or substitutes. We show that both the incentive to share customer information and its effects on consumers depend crucially on the relative magnitudes of the prices that would prevail in the complementary and substitute markets if consumers were fully segmented according to their preferences. This paper has important implications for merger analysis when the primary motive for merger is the acquisition of another firm's customer lists. Our analysis also suggests a new role of middlemen as information aggregators.     

Can a stochastic cusp catastrophe model explain housing market crashes?

Like stock market prices, housing prices often exhibit temporary booms and busts. A possible explanation for the observed abrupt changes is offered by the stochastic catastrophe model. This paper addresses the question whether the catastrophe model can describe and predict the dynamics of housing markets. We fit a stochastic cusp catastrophe model to empirical housing market data for six OECD countries, US, JP, UK, NL, SE and BE. Two different estimation approaches are considered – Cobb׳s method and Euler discretization. The analysis shows that while Cobb׳s approach describes the long-run stationary density better, Euler discretization is more tailored for time series, as it provides better one-step-ahead predictions. Proceeding using the Euler discretization method we discuss the dynamics of housing markets in terms of the multiple equilibria cusp catastrophe model. By considering the long-term interest rate as an exogenous variable we obtain new insights into the policy implications of interest rate levels, in particular concerning the stability of housing markets.     

From London to Los Angeles: a comparison of local labour market processes in the US and UK film industries

Addressing the issue of the embeddedness of labour markets, this paper compares the processes of finding employment in the film industry within two local labour markets. Drawing on studies of freelance film crews in London (UK) and Los Angeles (US), the paper concludes that the importance of social networks in job mobility in both contexts is a consequence of common production structures. However, common labour market practice varies in each geographical space as industry processes and structures are mediated by local institutional contexts.     

New or traditional careers? A study of UK graduates' preferences

Due to extensive changes to higher education in Britain, it is possible that graduates entering the labour market will have work experiences approximating to the ‘new’ career. We know little about whether this is a situation graduates are prepared for, or whether they welcome it. This article argues that a view about the changing nature of careers from the employee's perspective is needed. It describes some research investigating the career preferences and career self‐management of UK graduates in different organisational contexts, and provides evidence to suggest that graduates' endorsement of the ‘new’ career is limited. Employability is a key concern, but graduates expect to be able to develop that employability within the context of a traditional career. The article concludes by considering the implications for organisational career management, arguing that the traditional career still has considerable value for both employers and employees.