Pension funds and IPO pricing. Evidence from a quasi-experiment

We exploit a quasi-experiment arising from the government-forced changes to the assets under management and investment policy of the Polish pension funds. We test whether this new regulation and its resultant demand shock on the investors' side, leads to changes in the IPO pricing and the subsequent stock's performance. We report material and a statistically significant decrease in the IPO proceeds (IPO size) in the post-treatment period equal to over 107 million PLN (34 million USD). We find no empirical evidence that the treatment had a significant effect on the first-day IPO underpricing or on the long-term underperformance. We conclude that the demand shock resulting from the pension system reform that primarily aimed at solving fiscal problems effectively eliminated the so-called ‘pension premium’ of higher IPO valuations. Thus, it indirectly impaired companies' power of raising money in the public stock market. Furthermore, we report a decrease in the average first-day IPO returns among big issuers that is consistent with the book building literature.     

Assessing the sustainability of external imbalances in the European Union

We assess the sustainability of the current account (CA) balance, net international investment position (NIIP) and net external debt (NED) in a sample of 22 EU countries using two complementary approaches. First, we employ time‐series stationarity tests of current account balance‐to‐GDP ratios as well as cointegration tests of exports and imports of goods and services. Second, we assess the level of trade balance that stabilises the NIIP and the NED. We find that there is sustainability of the CA balance in eight countries, NIIP in five countries and NED in 10 countries, whereas there is evidence of a lack of sustainability in five debtor nations and three creditor nations. Both approaches are consistent with each other given the relationship between flows and stocks, the existence of structural breaks, and valuation effects via exchange rate and interest rate changes.     

Incumplimiento del salario mínimo en Europa central y oriental

En este estudio se analiza el incumplimiento del salario mínimo durante el periodo 2003–2012 en diez países de Europa central y oriental con salario mínimo obligatorio nacional. A partir de los datos de EU‐SILC y la metodología propuesta por Bhorat, Kanbur y Mayet (2013), se cuantifica la incidencia y magnitud del incumplimiento. Se realizan análisis de regresión sobre determinantes individuales, laborales y macroeconómicos. Aunque la incidencia permanece relativamente baja, los trabajadores a los que se dirigen las políticas de salario mínimo parecen los más expuestos a su incumplimiento. Con el tiempo, una mayor incidencia se asocia a una razón más alta entre salario mínimo y salario medio.     

Consumer debt attitudes: The role of gender,debt knowledge and skills

The link between financial attitudes and consumer financial market behaviour is well documented. However, little is known about the role of financial knowledge and skills—the main components of the financial literacy construct—in shaping debt attitudes. This link is especially absent from the gender perspective. This study focuses on consumer debt literacy and debt attitudes. A representative sample of adult Poles (N = 1,004) was participated in a computer‐assisted telephone interview. Latent class analysis was employed to reveal their debt attitudes, and subsequently, links between debt literacy and debt attitudes were studied with multinomial regression models. The results show that respondents in Poland can be grouped into five classes exhibiting different attitude profiles. The structure of debt attitudes is complex and differs from a simple unidimensional pro‐debt/ anti‐debt construct. Although this study did not find significant gender differences either in the conceptualization of debt attitudes or in their drivers, the results showed that in all but one class, consumer attitudes are strongly linked to either debt knowledge or debt skills or to both. Debt skills were revealed to be a particularly strong predictor of consumer debt attitudes.     

Speculating on presidential success: exploring the link between the price–earnings ratio and approval ratings

Stock markets and politics are enduring staples of dinner party conversations but surprisingly little is known about the interaction between the two. Here we present evidence for a robust relationship between a key financial measure—the aggregate Price–Earnings ratio—and surveyed approval of the incumbent president. We argue, following the finance literature, that the price–earnings ratio is a composite measure of investors’ hopes and fears. The partially prospective nature of this ratio enables us to shed new light upon the controversy surrounding how the electorate attends to economic circumstances in judging its presidents.     

Some remarks on lower hemicontinuity of convex multivalued mappings

Summary. For a multifunction a condition sufficient for lower hemicontinuity is presented. It is shown that under convexity of graph it is possible for a multifunction to be not continuous only when a special representation of points of its domain is not feasible.Received: 4 September 2004, Revised: 10 January 2005, JEL Classification Numbers: C61.     

A FEW CRITICAL REMARKS ON GLOBALISATION, DEMOCRACY AND SPATIALITY

Globalisation has come in for a lot of criticism. With its emphasis on the unimpeded circulation of capital, it is increasingly regarded as a negative phenomenon that prompts 'creative destruction' of politico-economic spaces at various geographical scales. Globalisation is also thought to cause wage stagnation, widening inequalities, higher unemployment and greater insecurity as well as to undermine local democracy and environmental sustainability. This paper argues that those criticisms should not be unproblematically accepted and makes a case for a less biased and more nuanced interpretation.     

Entrepreneur and the state-managed economy under socialism

The paper deals with institutional change in Poland. The accompanying pherlomenon is an escalating wave of entrepreneurial ventures. They take on different legal forms. The most popular, limited liability companies, emerge in the private, the cooperative, and the state sectors, and often across these sectors. These developments give rise to new interest groups which generally support a market reform. The conflict between the market oriented sector and the administered sector becomes one of the main factors influencing the economic policies of the state. In the paper, the development of the private sector is analyzed with the use of measures relating to the proportion of revenues from the private sector in the total state budget revenues.