The restructuring of the institutional real estate portfolio in the UK

Real estate investment portfolios of financial institutions have seen dramatic changes over the last three decades or more. Historically such property investment decisions have been seen within a portfolio diversification paradigm that has sought to balance risk and return. This paper considers the role of the supply of assets in the determining and constraining the UK institutional portfolio. The supply of real estate assets not only expands during property booms but has also been transformed by a long term urban development cycle as cities adapt to cars and the ICT revolution that has brought new property forms. The research examines long term trends in investment change by disaggregating into ten property forms rather than the usual three land use sectors. It then assesses to what extent investment patterns can be explained in terms of portfolio theory, short term net returns of individual sectors or driven by the supply of real estate assets. It concludes that the supply of real assets is an overlooked explanation.     

The effects of activity and geographic diversification on performance: Evidence from French financial institutions

Our paper studies the impact of activity and geographic diversification on financial institution's performance. These diversification strategies are complementary in generating performance and may provide important implications. Moreover, we investigate the interaction between these two strategies. Our dataset comprises 4532 years observations over the period of 2002 to 2012 and covers 412 French financial institutions. We find a negative relationship between diversification and performance. However, this relationship is significantly positive when institutions implement a dual diversification strategy. In this paper, we propose a classification of French financial institutions. For generalists’ banks and cooperative banks, we find similar results to those of the entire sample. Furthermore, for specialized financial institutions, the relationship is positive and significant. Our findings are robust to the potential endogeneity problem and to measures of diversification and performance.     

Identifying terms of trade shocks in a developing country using a sign restrictions approach

Using annual data for Botswana from 1960 to 2012, we examine the responses of macroeconomic variables to four generalized positive terms of trade shocks – global demand, globalizing, sector-specific and global supply. A sign-restricted structural vector autoregression model with a penalty function is estimated to identify the four possible shocks. While positive global demand and globalization shocks are both expansionary, they have opposite effects on inflation. A positive commodity market specific shock dampens real GDP growth and is inflationary, suggesting a possible Dutch disease response. A negative global supply shock suppresses both output growth and inflation. All but the last shock leads to a significant declining interest rate. Monetary policy contraction is recommended for the first shock and expansion for the others.     

Differences in managerial discretion across countries: how nation‐level institutions affect the degree to which ceos matter

The concept of managerial discretion provides a theoretical fulcrum for resolving the debate about whether chief executive officers (CEOs) have much influence over company outcomes. In this paper, we operationalize and further develop the construct of managerial discretion at the national level. In an empirical examination of 15 countries, we find that certain informal and formal national institutions—individualism, tolerance of uncertainty, cultural looseness, dispersed firm ownership, a common‐law legal origin, and employer flexibility—are associated with the degree of managerial discretion available to CEOs of public firms in a country. In turn, we show that country‐level managerial discretion is associated with how much impact CEOs have on the performance of their firms. We also find that discretion mediates the relationship between national institutions and CEO effects on firm performance. Finally, we discuss two inductively derived institutional themes: autonomy orientation and risk orientation. Copyright © 2011 John Wiley & Sons, Ltd.     

‘Communities of resistance’ and the use of newspaper discussion boards: Polish workers in Japanese foreign investments

This article examines the content of 200 posts on newspaper discussion boards by workers in a cluster of Japanese foreign investments in Poland. The conclusions are first, that the material experiences of workers generate a set of themes in relation to the labour process with regard to wages and working conditions, bullying and monitoring that exhibit similarities across countries. Second, we argue that an analysis of the discourse used is shaped by political and institutional conditions, which reveal national differences in how workers perceive and locate their exploitation. Finally, in relation to debates about workers’ resistance and the use of the Internet we argue that the interaction of themes related to the material experience of work are intertwined with institutionally embedded understandings of exploitation, which not only enable a shared framework for venting, but also provide the basis for a community of resistance.     

Remittance,Institutions and Investment Volatility Interactions: An Intercontinental Analysis

Generating massive investment for growth and development has been one of the main policy goals of most economies around the globe. Countries, most especially developing ones, are highly susceptible to investment volatility owing largely to the fragile nature of their economies as well as weaknesses in terms of dysfunctional institutions. Therefore, sound economic management suggests the need to better understand possible sources for mitigating the adverse effects of investment volatility. Remittances have been identified as important capital flows which do a good job of dousing macroeconomic volatilities. It is on this basis that the study sought to uncover the causal relationship between remittances and investment volatility via the intermediating role of institutions. Using a panel of 70 countries and the system Generalized Method of Moments (GMM) estimator, three insightful outcomes come to the fore. First, remittances played countercyclical roles across the estimated regressions. Second, institutional quality had no significant role in mitigating investment volatility and lastly, the interactive terms of both remittances and institutions significantly mitigated the negative impacts of investment volatility with the exception of the political component of the institutional architecture. Policy suggestions are drawn based on our results.     

Sustaining cooperation in social dilemmas: Comparison of centralized punishment institutions

This study investigates two centralized punishment institutions for a linear public goods game. These institutions require a certain contribution level and sanction under-contributing players. The two differ in who, among those who do not meet this requirement, receive sanctions. In one institution, all violators are sanctioned, and in the other, only the worst violator(s) is sanctioned. Theoretically, the public goods game of the latter institution yields contributions equal to or greater than that of the former institution with the same requirement and sanction level. The results of an experiment support this theoretical prediction. However, there is a discrepancy between the theory and laboratory observations in that the institution with the theoretically optimal requirement did not yield the highest profit.     

Do the poor benefit from globalization regardless of institutional quality?

Despite significant progress towards the Millennium goals, more than one billion people live on less than 1.25 US dollars per day. Previous research suggests that globalization stimulates poverty reduction, but does not investigate what role institutions play in this relationship. Theoretically, globalization could act as either a complement or a substitute to institutional quality in reducing poverty. We find that the poverty-reducing effect of globalization is stronger when institutions are weak. In particular, increasing social globalization reduces poverty more when corruption is high and democratic accountability is low. Thus, globalization has the power to reduce poverty even in countries with low institutional quality.     

Deposit insurance around the world: A comprehensive analysis and database

This paper provides a comprehensive, global database of deposit insurance arrangements as of 2013. We extend our earlier dataset by including recent adopters of deposit insurance and information on the use of government guarantees on banks’ assets and liabilities, including during the recent global financial crisis. We also create a Safety Net Index capturing the generosity of the deposit insurance scheme and government guarantees on banks’ balance sheets. The data show that deposit insurance has become more widespread and more extensive in coverage since the global financial crisis, which also triggered a temporary increase in the government protection of non-deposit liabilities and bank assets. In most cases, these guarantees have since been formally removed but coverage of deposit insurance remains above pre-crisis levels, raising concerns about implicit coverage and moral hazard going forward.