PRIVATE EQUITY INVESTING IN EMERGING MARKETS

After a proliferation of emerging market funds in the 1990s, growth has slowed drastically due to disappointing preliminary results. Private sector funds initially appeared promising because of the burgeoning demand for capital in emerging markets, the new receptivity of governments to foreign investors, and the prospect of high returns. But in many cases, the regulatory and legal frameworks did not provide adequate investor protection, and dramatic differences in accounting standards, corporate governance, and exit potential created problems. These problems are often accentuated because local owners are adept at navigating the legal and accounting systems, placing investors at a disadvantage.
As global competition intensifies, local policies, regulations, and business practices are becoming increasingly important in attracting investors. Local governments must institute the reforms necessary to improve the investment environment, including the strengthening of shareholder rights and corporate governance standards and improving access to public equity markets. Development finance institutions must provide direction and leadership in these areas. And fund managers must align their business models more closely with emerging market realities by establishing a local presence, adopting a more hands-on approach to monitoring their investments, and developing creative exit strategies.     

The coverage assignments of financial analysts

Previous studies document that forecast accuracy impacts analyst career outcomes. This paper investigates the influence of forecast accuracy on coverage assignments. I show that brokerage houses reward accurate analysts by assigning them to high-profile firms and penalise analysts exhibiting poor accuracy by assigning them to smaller firms. The coverage of high-profile firms increases the potential for future compensation linked to investment banking and trading commissions. In addition, covering such firms increases analysts' recognition from buy-side investors, which, in turn, increases the likelihood of obtaining broker votes and votes for the Institutional Investor star ranking. Overall, my results indicate that high forecast accuracy leads to increased future compensation.     

Evolution and Transformation of Innovation in the Global Automotive Industry

The automotive industry is an integral component of the global economy and is unique in that it encompasses every aspect of the value chain—from raw materials to design and development, manufacturing, sales and service, and even disposal. All of these value‐creating areas are undergoing significant innovative change as a result of environmental and competitive forces. In this issue, we explore some of the most salient topics related to innovation and product management in the context of the contemporary global automotive industry.     

Relevance of Fundraising Charities’ Content-Marketing Objectives: Perceptions of Donors,Fundraisers, and Their Consultants

Many fundraising charities invest heavily in content marketing, often using consultants to direct their content-marketing efforts. Thus it is vital to establish whether certain key aims of content marketing suggested by literature in the field actually match the aspects of content marketing deemed most important by charity donors. This paper examines the significance attached by samples of charities, donors, and content-marketing consultancies to four possible major objectives of content marketing—the attainment of high–search-engine-results-page rankings, image enhancement through impression management, the stimulation of public perceptions of organizational transparency, and the creation of messages that “go viral.” Several major differences in perceptions emerged among the three groups, with substantial implications for how fundraising charities should manage their content-marketing programs and activities. Charity managements need to consider carefully and critically the possible returns on large-scale expenditures intended to pursue the putative aims of content marketing that are routinely advocated by practitioner and academic literature.     

Unbundling democracy: Political rights and civil liberties

Much recent political economy and political science literature views democracy in terms of political rights. This view, often referred to as electoral democracy, is particularly pronounced in the empirical literature. We reincorporate the role of civil liberties, which are at the core of modern democracy, in two ways. We identify four fundamental sources of potential differences in the evolution of political rights and civil liberties. We present systematic, robust and varied empirical evidence on the direct impact of two of these potential sources of differences using cross-national panel data and accounting for the modernization hypothesis. We obtain two noteworthy empirical results: civil liberties exhibit greater persistence than political rights in affecting subsequent outcomes; and, our main result, civil liberties are complementary to political rights when affecting subsequent outcomes, while the reverse is not the case. Consequently, one must incorporate civil liberties as a determinant of electoral democracy. More generally, both dimensions must be considered to understand the setbacks recently experienced by many democracies, despite their holding of free and fair elections.     

The last visitation of the plague in Sweden: the case of Bräkne‐Hoby in 1710–11

In an earlier study of the plague in Colyton, Devon, the household distribution of deaths was studied to see whether this provided a method of identifying the causative disease. In this article, a known epidemic of plague in the Swedish parish of Bräkne‐Hoby was studied as a means of testing out the generality of the household distribution of deaths. It was discovered that, in this case, the very heavy mortality was due to two radically different means of spreading the disease, initially the classic bubonic one through the rat flea, and latterly, and somewhat surprisingly, the pneumonic one, through the infection of the inhabitants by their own friends and neighbours.     

State Income Taxes and Interstate Migration

This paper examines the comprehensive IRS data set of state-state migration flows for evidence that differences in state income tax rates are associated with migration patterns. Using annual data on moves between every pair of states, pooled time-series cross-section regressions indicate that in the 1992–2010 period states with higher top marginal income tax rates experienced relatively greater outmigration of taxpayers and gross income. To illustrate the magnitude of the tax effect, we estimate that by 2010 cumulative losses since the enactment of New Jersey’s 2004 “millionaires’ tax” were as much as 42,000 taxpayers and $6.9 billion in annual adjusted gross income. These results suggest that sustained, relatively high income tax rates could gradually erode a state’s population and revenue base.