Banking Sector Performance in Latin America: Market Power versus Efficiency

Since the mid‐1990s the banking sector in the Latin American emerging markets has experienced profound changes due to financial liberalization, a significant increase in foreign investments, and greater merger activities often occurring following financial crises. The wave of consolidation and the rapid increase in market concentration that took place in most countries has generated concerns about the rise in banks' market power and its potential effects on consumers. This paper advances the existing literature by testing the market power (Structure–Conduct–Performance and Relative Market Power) and efficient structure (X‐ and scale efficiency) hypotheses for a sample of over 2500 bank observations in nine Latin American countries over 1997–2005. We use the Data Envelopment Analysis technique to obtain reliable efficiency measures. We produce evidence supporting the efficient structure hypotheses. The findings are particularly robust for the largest banking markets in the region, namely Brazil, Argentina, and Chile. Finally, capital ratios and bank size seem to be among the most important factors in explaining higher than normal profits for Latin American banks.     

Market challenges facing academic research in commercializing nano-enabled implantable devices for in-vivo biomedical analysis

This article reports on the research and development of a cutting-edge biomedical device for continuous in-vivo glucose monitoring. This entirely public-funded process of technological innovation has been conducted at the University of Barcelona within a context of converging technologies involving the fields of medicine, physics, chemistry, biology, telecommunications, electronics and energy. The authors examine the value chain and the market challenges faced by in-vivo implantable biomedical devices based on nanotechnologies. In so doing, they trace the process from the point of applied research to the final integration and commercialization of the product, when the social rate of return from academic research can be estimated. Using a case-study approach, the paper also examines the high-tech activities involved in the development of this nano-enabled device and describes the technology and innovation management process within the value chain conducted in a University–Hospital–Industry–Administration–Citizens framework. Here, nanotechnology is seen to represent a new industrial revolution, boosting the biomedical devices market. Nanosensors may well provide the tools required for investigating biological processes at the cellular level in vivo when embedded into medical devices of small dimensions, using biocompatible materials, and requiring reliable and targeted biosensors, high speed data transfer, safely stored data, and even energy autonomy.     

Are All Ratings Created Equal? The Impact of Issuer Size on the Pricing of Mortgage‐Backed Securities

Initial yields on both AAA‐rated and non‐AAA rated mortgage‐backed security (MBS) tranches sold by large issuers are higher than yields on similar tranches sold by small issuers during the market boom years of 2004 to 2006. Moreover, the prices of MBS sold by large issuers drop more than those sold by small issuers, and the differences are concentrated among tranches issued during 2004 to 2006. These results suggest that investors price the risk that large issuers received more inflated ratings than small issuers, especially during boom periods.     

The use of earnings and cash flows in investment decisions in the U.S. and Mexico: Experimental evidence

In this study, we investigate which of two accounting performance measures, earnings or cash flows, is used more in valuation decisions by non-professional investors in the United States and in Mexico. This issue is relevant for the Mexican Stock Market (Bolsa Mexicana de Valores) because the Bolsa's growth has stagnated compared with markets of other Latin American countries. Results of the study reveal that the majority of participants in the U.S. rely on earnings while the majority of participants in Mexico rely on cash flows. Results also suggest that the users’ predisposition can be dysfunctional to the extent that they do not consider using the other accounting measure, even when doing so made it easier to arrive at the correct valuation result (i.e. they did not choose to use the more persistent and therefore easier to forecast accounting measure). However, results are mixed for participants using earnings, since we document a higher chance of forecasting errors for participants in both countries when using earnings rather than cash flows in their calculations for the failure of these participants to adjust earnings for depreciation.This study extends the existing international literature by documenting a country-specific predisposition to use cash flows or earnings as a valuation tool by non-professional investors. Moreover, this study also shows that this predisposition can be dysfunctional, leading participants to make incorrect valuation decisions as a result of their failure to consider the differential persistence of the two accounting measures presented in the experiment.     

Are immigrants really attracted to the welfare state? Evidence from OECD countries

This paper examines the impact of fiscal policies on both the size and educational levels of immigrants in destination countries. We find that whether or not a country’s policies are attracting highly educated immigrants goes beyond the issue of the “welfare state”. Immigrants are making important distinctions between the different benefits provided by a receiving country’s government. Health and education spending are found to have a positive impact on the education levels of immigrants while the reverse is true for unemployment and retirement benefits. Welfare programs are found to be insignificant once other government programs/taxes and other factors are taken into account. These results imply that countries should be less concerned about whether they are a “big government” with regards to attracting immigrants, and more concerned with what types of benefits they offer.     

Reasserting Institutionalist Insights on the Good Society: 30 Years After Petr’s Call for a Mixed Economy

In this research note, I revisit the issues raised by Jerry Petr (1987) in “The Nature and Necessity of the Mixed Economy.” The institutionalist mixed economy is still a sound model for the good society. However, Western industrialized countries have been losing ground on the goals of the mixed economy. The struggle to defend pragmatism over ideological attachment to neoliberalism, has evolved into a distributional struggle that cannot be resolved without institutional change.     

“我们正在寻找中国进口商”

亚洲是我国开展对外经贸合作最主要的对象之一，特别是东盟一巾吲自由贸易区2010年1月1日全面启动以来，中国与亚洲国家经贸合作正变得更广泛而深入。近日，本刊记者集中采访了新加坡、马尔代夫和马来阳砸驻华大使，请他们介绍中国企业在这些国家的发展机会。     

Enhancing mental models,analogical transfer,and performance in strategic decision making

Recent research suggests that managers often make strategic decisions in novel situations by utilizing past experiences to reason by analogy. However, there is substantial evidence that decision makers often fail to identify and apply knowledge about one situation to a similarly structured situation. Two experimental studies investigated the mechanisms impacting knowledge transfer from one managerial situation (the source) to an analogous situation. The results show that exposure to variation in the source situation improves transfer performance. Variation decreases performance in the short term but improves learning and increases analogical transfer. Higher performance on and systematic search of the source situation also increase transfer performance. These results yield important implications for enhancing analogical transfer in strategic decision making and for future research on reasoning by analogy. Copyright © 2012 John Wiley & Sons, Ltd.