Multidimensional brand equity and asymmetric risk

The authors investigate the extent to which central customer-based brand equity dimensions (Differentiation, Relevance, Esteem, Knowledge, and Energy) influence a firm’s systematic risk (i.e., beta) during both market upturns and downturns. The results demonstrate that aggregating upside and downside beta or different dimensions of brand equity masks the true associations which can be seen only in the disaggregate analyses. The authors find that Relevance and Knowledge play roles as stabilizers, showing negative relationships with both upside gains and downside risk, while Esteem plays the role of protector, showing a negative relationship with only downside losses and not influencing upside gains; Energy acts as a booster, being positively associated with a firm’s potential gains in a period of market growth without increasing the firm’s expected losses during a bad market. The positive relationship of Energy with aggregate risk could be misleading as it hides the beneficial effect of Energy as a booster. The authors also find that Relevance is the most important consideration when people make choices in bad market situations, while Energy becomes the most crucial deciding factor in good market situations. Taking advantage of the multidimensional constructs of brand equity while allowing for the asymmetrical characteristics of risk enables managers to capture the differential role of each brand equity dimension in influencing firm risks, which leads to more sophisticated strategic decisions regarding risk management. In addition to general brand strategy, the authors provide tailored brand strategies to firms from different industries or with different financial characteristics.     

关于发挥国家审计防范金融风险作用的路径研究

防范重大风险攻坚战是2019年经济工作的重要组成部分,而防范重大风险的工作重点是预防和控制金融风险,着力激发微观主体活力,创新和完善宏观调控,促进经济稳增长、防范风险,保持经济运行在合理区间,进一步实现“六个稳”。提升市场信心是赢得这场攻坚战的重要途径。本文旨在分析现阶段国内存在的主要金融风险,从金融审计角度来探索防范控制金融风险的相关路径。     

Safety risk and international investment decisions

We identify and demonstrate the merit of a novel institutional factor, safety risk, which likely affects multinational corporations’ (MNCs’) international investment decisions. Safety risk refers to the extent to which security and physical well-being are endangered due to normalized aggression and criminality in society. Despite concerns from executives and policymakers, safety risk has attracted little research attention. We validate a safety risk measure and evaluate the construct’s effect on MNCs’ investments. The findings indicate that countries’ safety risk deters MNCs from investing. Further, in post hoc analyses, firms’ prior experiences with safety risk and countries’ private security investments moderated this relationship.     

Host country risk and foreign ownership strategy: Meta-analysis and theory on the moderating role of home country institutions

Empirical evidence for the relationship between host country risk and a firm’s ownership level in its foreign entry strategy is inconclusive. We revisit this relationship by integrating the internalisation logic with an institution-based view to examine the moderating effects of formal and informal institutions in the home country. By meta-analysing 64 empirical studies involving 52,229 ownership decisions on foreign market entry, this study gives support to theoretical arguments that the focal relationship is positively moderated by institutional constraints on policymakers and risk-taking tendencies in the home country but is negatively moderated by the joint effect of these two institutional factors. These findings shed new light on the literature of host country risk and foreign ownership strategy. Besides describing the implications of the findings for theory and practice, we discuss the agenda for future theory development in international business.     

财务公司的风险管理与内部控制

财务公司是一类特殊的金融机构,既有风险内生性特点,也易受外部风险传导。在风险管理与内部控制上,要坚持业务发展与内部控制相平衡的原则,一方面要遵循普适性、规律性的银行业规则(巴塞尔协议),另一方面也要充分考虑所属集团的具体实际情况,服务于集团和财务公司战略目标的实现。     

Real estate prices and systemic banking crises

The collapse of real estate prices has historically jeopardized banking stability and triggered systemic banking crises. This paper studies risk contagion in a banking system in real estate price shock by adopting complex network theory. Modelling the real estate-related asset as a common exposure of banks to the real estate market, we propose a model that incorporates two main risk contagion channels, i.e., the financial network and asset fire sales, and reveal how the real estate price shock is transmitted and propagated across banks. We demonstrate that banking stability is highly sensitive to the real estate price shock. Moreover, due to the particularly low liquidity of the real estate market, the asset fire-sales of real estate assets overwhelms the financial network, playing the dominant role in risk contagion. Our model can be adopted by regulators to conduct stress testing and to forge effective risk management strategies.     

结构性去杠杆下的中国宏观经济*——2018年中期中国宏观经济分析与预测

2018年以来中国经济平稳运行，物价水平稳定，就业形势整体向好，经济增长质量稳步提升。不过，当前中国经济仍然面临一定的下行压力，尤其需要警惕消费增速过快下滑、宏观税负进一步加重、民间投资复苏乏力、部分企业效益状况显著恶化、去杠杆过程中金融体系不稳定性加剧等主要风险点。此外，杠杆率高企是现阶段中国经济面临的突出问题，而且中国的杠杆率在不同部门之间以及各部门内部均体现出明显的结构性特点。为此，中央在2018年专门提出了“结构性去杠杆”的新思路。在“结构性去杠杆”稳步推进的大背景下，宏观政策既要积极应对经济下行压力，谨防去杠杆带来的经济增速超预期下滑风险，又要激发经济内生增长动力，促使经济实现长期可持续发展和“高质量发展”。     

Liquidity risk and maturity management over the credit cycle

We show that firm demand-side factors are strong drivers of procyclical refinancing behavior over the credit cycle using novel data from the Shared National Credit program. Firms are more likely to refinance early when credit conditions are good to keep the effective maturity of their loans long and hedge against having to refinance in tight credit conditions. High credit quality firms are better able to hedge, making their refinancing propensity more sensitive to credit cycles than less creditworthy firms. There is a strong relationship between refinancing a loan, and subsequent growth in capital expenditure, especially when a loan is refinanced early.     

The innovative bureaucrat: evidence from the correctional authorities in Washington State

Bureaucracies are usually regarded as inefficient, wasteful mechanisms. Contrary to this deeply rooted perception of bureaucracy, this paper documents the case of the correctional authorities in Washington State, a bureaucracy that acted with a considerable degree of innovation and professionalism. Their task was to administer a risk assessment instrument that measured the level of risk posed by offenders by way of a numerical score. They used that score to identify the level of supervision offenders were to receive once released into the community. In analyzing the data, I discovered an unusual application of the instrument that resulted in many offenders being bumped to a higher supervision level. Using a regression discontinuity design, I uncover the mechanics of the bumping-up process and I generate an instrument that is cleansed of the manipulation. I find that the manipulated instrument predicts serious recidivism events better than the cleansed instrument, especially when these events involve high-risk offenders, thus providing evidence that the authorities had good reason to undertake the manipulation.     

Financing the sustainable management of Rwanda's protected areas

Rwanda's Nyungwe National Park is a biodiversity hotspot with the most endemic species in the ecoregion and the highest number of threatened species internationally. Nyungwe supplies critical ecosystem services to the Rwandan population including water provisioning and tourism services. Tourism in the Park has strong potential for financing enhanced visitor experiences and the sustainable management of the Park. This paper explores quantitatively the economic impacts of adjustment in Park visitation fees and tourism demand as a source of revenues to improve Park tourism opportunities and ongoing operations and maintenance. The methods developed in this paper are novel in integrating the results of stated preference techniques with a regional computable general equilibrium modelling approach to capture multisectoral, direct, indirect and induced impacts. Such methods have strong potential for assessing revenue generation alternatives in other contexts where park managers are faced with the need to generate additional revenue for sustainable park management while facing diminishing budget allocations. Results of this analysis demonstrate that adjustment of Park fees has a relatively small impact on the regional economy and well-being when compared with a strategy aimed at generating increased tourism demand through investment in improving the visitor experience at Nyungwe National Park.