Real options and cost-based access pricing: Model and methodology

This paper proposes a model and methodology for valuing the option to delay network investment decisions and calculating cost-based access prices. It argues that an option value multiple must be applied to the investment cost component of each network element in order to account for the value of the delay option that is extinguished at the time of investment. Option value multiples are calculated for the investment decision in three main network elements, each representing a different part of the Brazilian fixed telecommunications network, subject to different technological and demand uncertainties. After applying the markup factors, network costs must be assigned to network services on the basis of how much each service uses each network element.     

Anti-Abortion Activities and the Market for Abortion Services: Protest as a Disincentive

Cross-section data for the US are used to estimate the effects of anti-abortion activity on the demand and supply of abortion services in 1992. Empirical results show that anti-abortion activity had a signi~cant negative impact on both the demand and supply of abortion services. Using estimates from a two-stage least-squares estimation of demand and supply, anti-abortion activities (measured as picketing with physical contact or blocking of patients) have decreased the market equilibrium abortion rate by an estimated 19 percent and raised the price of an abortion by approximately 4.3 percent. Taken together, the empirical results show that anti-abortion activities have been successful in making abortion services scarcer.     

The IPO of Industrial and Commercial Bank of China and the ‘Chinese Model’ of privatizing large financial institutions

We examine the privatization process of the Industrial and Commercial Bank of China (ICBC), the largest bank in the world by market capitalization, and its dual initial public offerings (IPOs) in the Hong Kong and Shanghai Stock exchanges in 2006. The Chinese government retains majority equity ownership of ICBC while foreign institutional investors hold minority equity stakes. Other large financial institutions went through the same reform process and have similar, post-IPO ownership structures. The largest Chinese banks, as a group, outperformed their counterparts from other emerging and developed markets before and during the 2007–2009 financial crisis. We argue that the ‘Chinese model’ of privatizing and managing large financial institutions can be advantageously used in other countries.     

Africa: On the Rise,but to Where?

Africa's hitherto negative image is now being rapidly replaced by a new persona: ‘Africa on the rise’. Developed mainly from Africa's growth experience, this re-imaging of Africa has generated considerable interest even among Africanists concerned that the continent has often been the target of crisis jokes. Even more notably, the rebranding of Africa has gained traction in corridors of power and centres of finance. For this latter group, however, the narrative signals more than a cultural repackaging. It is about confirming that Africa is ripe and ready to host investment and to open up markets in areas where they did not exist or existed but were not capitalist in form. Either way, however, the ‘Africa on the rise’ narrative achieves a major political and economic goal. Neglecting ethical questions about sustainable jobs, inequality and ecological crisis, while extolling the virtues of capital accumulation, it extends a particular neoliberal ideology which favours people with market power, not the majority with precarious positions or their relationship with nature.     

Interbank market liquidity and central bank intervention

We develop a simple model of the interbank market where banks trade a long term, safe asset. When there is a lack of opportunities for banks to hedge idiosyncratic and aggregate liquidity shocks, the interbank market is characterized by excessive price volatility. In such a situation, a central bank can implement the constrained efficient allocation by using open market operations to fix the short term interest rate. It can be constrained efficient for banks to hoard liquidity and stop trading with each other if there is sufficient uncertainty about aggregate liquidity demand compared to idiosyncratic liquidity demand.     

Systematic risk and international diversification: An empirical perspective

This paper reports findings from a study that systematically evaluated the nature of the relationship between internationalization and systematic risk. In addition to previous conceptualizations, this study also examined whether the number of foreign countries and segments a firm operates in constitute a part of the information used by market participants to assess a firm's risk exposure. We find that international diversification is significantly and positively associated with systematic risk and that diversification augments systematic risk. Our findings have implications on the stability of foreign expansion and business decisions by managers on the appropriate level of overseas commitment.     

Resource allocation decisions in low-income rural households

This paper is based on the theory that a society's nutritional well-being is both a cause and a consequence of the developmental process within that society. An approach to the choices made by poor rural households regarding food acquisition and nurturing behavior is emerging from recent research based on the new economic theory of household production. The central thesis of this approach is that household decisions related to the fulfillment of basic needs are strongly determined by decisions on the allocation of time to household production activities. Summarized are the results of the estimation of a model of household production and consumption behavior with data from a cross-sectional survey of 30 rural communities in Veraguas Province, Panama. The struture of the model consists of allocation of resources to nurturing activities and to production activities. The resources to be allocated are time and market goods, and in theory, these are allocated according to relative prices. The empirical results of this study are generally consistent with the predictions of the neoclassical economic model of household resource allocation. The major conclusions that time allocations and market price conditions matter in the determination of well-being in low-income rural households and, importantly, that nurturing decisions significantly affect the product and factor market behavior of these households form the basis for a discussion on implucations for agricultural and rural development. Programs and policies that seek nutritional improvement should be determined with explicit recognition of the value of time and the importance of timing in the decisions of the poor.     

The American work force: 1992-2005. Industry output and employment

Projections show services providing more than half of new job growth; in goods production, construction adds jobs, while manufacturing employment declines.