Activist arbitrage: A study of open-ending attempts of closed-end funds

This paper documents frequent attempts by activist arbitrageurs to open-end discounted closed-end funds, particularly after the 1992 proxy reform which reduced the costs of communication among shareholders. Open-ending attempts have a substantial effect on discounts, reducing them, on average, to half of their original level. The size of the discount is a major determinant of whether a fund gets attacked. Other important factors include the costs of communication among shareholders and the governance structure of the targeted fund. Our study contributes to the understanding of the actions undertaken by arbitrageurs in financial markets beyond just pure trading.     

Endogenous Financial and Trade Openness

The authors study the endogenous determination of financial and trade openness. They construct a theoretical framework leading to two-way feedbacks between financial and trade openness and identify these feedbacks empirically. They find that one standard deviation increase in commercial openness is associated with a 9.5% increase in de facto financial openness (% of GDP). Similarly, an increase in de facto financial openness has powerful effects on future trade openness. De jure restrictions on capital mobility have only a weak impact on de facto financial openness, while de jure restrictions on the current account have a large adverse effect on commercial openness. The authors investigate the relative magnitudes of these directions of causality using Geweke's (1982 ) decomposition methodology. They conclude that in an era of rapidly growing trade integration, countries cannot choose financial openness independently of their degree of openness to trade. Dealing with greater exposure to turbulence by imposing restrictions on financial flows is likely to be ineffectual.     

Firm exits as a determinant of new entry: Is there evidence of local creative destruction?

This study posits that a local process of creative destruction provides an impetus to regional industrial renewal. We argue that exits of older firms release resources that stimulate local entry. New entrants add value to these resources by redeploying them in more productive uses. We test our hypotheses with a unique longitudinal database encompassing the entry and exit of Canadian manufacturing enterprises. We find that exits of old firms increase entry and that on average new entrants are more productive. Persistent high local rates of exit, however, deter entry.     

A review of the internationalization of Chinese enterprises

This article reviews the scholarly research on the internationalization of Chinese enterprises (ICE) through bibliometric citation analysis. We do so through a data visualization technique and analysis of 206 articles which are authored by 382 scholars in 72 different journals published between 2003 and 2016. The results reveal four research streams in the context of ICE: (1) testing traditional FDI theory, (2) location choice, (3) entry mode choice, and (4) drivers and motivations of internationalization. While international business (IB) journals, such as the Journal of World Business, the Journal of International Business Studies, and International Business Review, have taken a lead role in pushing the ICE literature stream forward, geographically focused general management journals, such as the Asia Pacific Journal of Management and Management & Organization Review, have also made a singular contribution. The impact of perspective, in terms of author and institution affiliation, on the literature set is also examined. Finally, issues related to data, methodological rigor and theoretical underpinnings are highlighted. To advance the ICE literature, we proposed a holistic framework of drivers and motivations of Chinese outward FDI and present some promising future research areas.     

Sri Lankan households a decade after the Indian Ocean tsunami

This study estimates the causal effect of the 2004 Indian Ocean tsunami on household consumption and income in Sri Lanka 8 years after the event, using a difference‐in‐differences methodology and extensive household survey data. The analysis finds a strong association between the area‐wide tsunami disaster shock and increases in household income and consumption in the long term. The increase in consumption is much smaller than the observed increase in income; while the increase in income is mostly observed in nonagricultural wage income (and a decline in agricultural income). We also find that households in high‐income regions and lower‐damage districts experienced a much better recovery, in terms of income, than those in poorer regions or those districts that experienced more destruction. Deviating from the common observation on short‐term adverse impacts of catastrophic disasters in low‐ and middle‐income countries, these results are suggestive of a potential for long‐lasting and more successful recovery scenarios. Still, Sri Lanka received a very large amount of external assistance post‐tsunami—an amount that may not be replicable elsewhere. It is likely that this massive inflow of assistance, further helped by the end of the armed conflict in 2009, has contributed significantly to this relatively successful recovery.     

The Impact of Corruption on Firm Tax Compliance in Transition Economies: Whom Do You Trust?

Tax compliance is an important issue for governments and the public alike. To meet public needs and fund public mandates, firms around the world are expected to comply with tax laws. Factors that are related to organizational (firm) tax compliance have not been sufficiently examined in the literature. Owing to the increasing global influence of transition economies, factors associated with firm tax compliance in transition economies are particularly of interest. Based on a sample of over 5,000 firms from 22 former Soviet Bloc transition economies, we find that higher levels of corruption and higher levels of particularized trust (reliance on friends and family) are associated with lower levels of tax compliance. Interestingly, we also find that the negative relationship between corruption and tax compliance is weakened in situations of higher generalized trust (trust in strangers). Overall, our study’s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies.     

Dynamic Embeddedness in Chinese Firm Internationalization

This article presents a multilevel framework to analyze the motivations and location choices of Chinese OFDIs. We contribute to theory‐integration on Chinese OFDI flows and patterns by suggesting a framework that combines country‐, industry‐ and firm‐level analyses and by reflecting aspects from the resource‐based view (firm‐specific advantages), institutional‐based view (push/pull home‐ and host‐­country factors), and network‐based view (network relations). We also explicitly incorporate “time” as a variable into our framework by introducing and explaining the concept of dynamic embeddedness as an interaction dimension to reflect the inherent dynamics on all levels and actors. © 2017 Wiley Periodicals, Inc.     

The meaning of work,employment relations,and strategic human resources management in Israel

The paper deals with the meaning of work, employment relations, and strategic human resources management. First it shows that Israeli workers have become more individualistic and materialistic, and less collectively oriented, as instrumental achievements outweigh contributions to society. These issues apparently influence employment relations and organizational policies. Next, it deals with the corporatist employment relations system, based on tri-partite collective bargaining among employees, employers, and the state. During various times, the relative balance of power among the three parties swayed considerably, according to major political, economic and social events taking place in society. The final section on strategic human resources management focuses on the transition of Israel's Human Resources profession, from the traditional HR role to the new Strategic Human Resource Management role. These three spheres have gone through some significant changes in the last several decades, perhaps not parallel to most industrial nations.     

Real investment and risk dynamics

We ask to what extent the negative relation between investment and average stock returns is driven by risk. We show that: (i) the average return spread between low and high asset growth and investment portfolios is largely accounted for by their spread in systematic risk, as measured by the loadings on the Chen, Roll, and Ross (1986) factors; (ii) as predicted by q-theory and real options models, systematic risk falls during large investment periods; (iii) the returns of factors formed on the investment-to-assets, asset growth, and investment growth all forecast aggregate economic activities. Our evidence suggests that risk plays an important role in explaining the investment-return relation.