The function-specific microfoundations of dynamic capabilities in cross-border mergers and acquisitions

In mergers and acquisitions, the acquiring firm must combine two firms’ resources and capabilities so that the outcome yields value. In individual firms, the marketing & sales, and R&D functions have typically developed intertwined and complex relationships over time. These multifaceted dependencies may obscure the integration of the firms and their functions. In order to reveal to what extent cross-functional relationships determine the success or failure of an acquisitions, we have made one of the first attempts to study merging firms’ function-specific capabilities, underlying microfoundations, and their cross-functional relationships during the integration process—instead of focusing on acquisition capabilities as such. We use longitudinal data from two cross-border acquisitions between US and Finnish SMEs. Our results indicate that major differences between merging firms’ cross-functional microfoundations—that is, their structures, processes, routines, and skills—might either enforce or erode the seemingly promising synergies at the product and market levels, depending on managerial awareness of their nature.     

Do sovereign rating announcements affect emerging market exchange rate correlations? A multivariate DCC-GARCH approach

This article investigates the effects of sovereign credit rating announcements on time-varying exchange rate return correlations for a sample of 11 emerging market countries over the period 2002–2015. The data set covers daily exchange rates and long-term foreign currency sovereign ratings, outlooks and watch list. The pairwise time-varying correlations are derived by corrected Dynamic Conditional Correlation (cDCC) modelling which is a member of multivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models family. Furthermore, to capture the global factor effect, a dynamic-weighted index is created by using dynamic principal component (DPC) analysis. Findings suggest that some of the emerging market exchange rate co-movements are affected by rating announcements. Upgrades of Moody’s and downgrades of Fitch lead to spillovers. Main source of these spillovers are sovereign credit rating changes of European countries, especially Czech Republic and Turkey. Countries with high amount of external debt, large current account deficit and speculative grade are more prone to be influenced by announcements on a foreign country’s long-term sovereign rating.     

动液面谱减法滤波

动液面滤波是油井检测动液面的关键技术之一。文章利用谱减法处理油井动液面信号,消除背景噪声的影响,并改进谱减法应用到动液面滤波,取得较好的滤波效果,从而提高对液面反射波位置的辨识能力。     

Financial components of FDI and choice of capital structure: an analysis for 30 OECD countries

Even though the choice of capital structure depends on the three different financial components of foreign direct investment (FDI), previous research has regarded FDI as unidimensional rather than multidimensional. This study addresses new findings in the FDI area and investigates the relevant determinants of capital structure in 30 OECD countries from 2006 to 2014 within the framework of a simultaneous equation model. Our primary findings reveal that each component has its own deterministic features driven by relevant policy variables and risks in the market. While an increase or decrease in equity capital shows the ability of the host country to attract new investments, the subsequent components are mostly used to adjust the equity capital investment exposure.     

Investigating first‐stage exchange rate pass‐through: Sectoral and macro evidence from euro area countries

In this paper, we evaluate the first‐stage pass‐through, namely the responsiveness of import prices to the exchange rate changes, for a sample of euro area (EA) countries. Our study aimed to shed further light on the role of microeconomic factors versus macroeconomic factors in influencing the extent of the exchange rate pass‐through (ERPT). As a first step, we conduct a sectoral analysis using disaggregated import prices data. We find a much higher degree of pass‐through for more homogeneous goods and commodities, such as oil and raw materials, than for highly differentiated manufactured products, such as machinery and transport equipment. Our results confirm that cross‐country differences in pass‐through rates may be due to divergences in the product composition of imports. The higher share of imports from sectors with lower degrees of pass‐through, the lower ERPT for an economy will be. In a next step, we investigate for the impact of some macroeconomics factors or common events experienced by EA members on the extent of pass‐through. Using the system generalised method of moments within a dynamic panel‐data model, our estimates indicate that decline of import‐price sensitivity to the exchange rate is not significant since the introduction of the single currency. Our findings suggest instead that the weakness of the euro during the first 3 years of the monetary union significantly raised the extent of the ERPT. This outcome could explain why the sensitivity of import prices has not fallen since 1999. We also point out a significant role played by the inflation in the Eurozone, as the responsiveness of import prices to exchange rate fluctuations tends to decline in a low and more stable inflation environment. Overall, our findings support the view that the extent of pass‐through is comprised of both macro‐ and microeconomic aspects that policymakers should take into account.     

技术创新、金融创新与经济增长——基于中国省际面板数据

本文从实证分析层面对金融创新、技术创新与经济增长之间的作用关系进行探讨。基于我国 2000~2015 年省级面板数据，采用GMM估计方法，利用动态面板模型进行实证检验。结果表明：技术创新对经济增长的影响显著为正，单独的金融创新对经济增长起抑制作用，二者的交互作用则对经济增长起显著性正向作用。脱离实体经济的金融创新将抑制经济增长，也会间接阻碍技术创新对经济增长的影响。本文结合当前经济形势，从金融机构与创新企业相接轨共同提高创新水平、培养创新型人才等角度提出建议。     

A general endogenous grid method for multi-dimensional models with non-convexities and constraints

The endogenous grid method (EGM) significantly speeds up the solution of stochastic dynamic programming problems by simplifying or completely eliminating root-finding. We propose a general and parsimonious EGM extended to handle (1) multiple continuous states and choices, (2) multiple occasionally binding constraints, and (3) non-convexities such as discrete choices. Our method enjoys the speed gains of the original one-dimensional EGM, while avoiding expensive interpolation on multi-dimensional irregular endogenous grids. We explicitly define a broad class of models for which our solution method is applicable, and illustrate its speed and accuracy using a consumption–saving model with both liquid assets and illiquid pension assets and a discrete retirement choice.     

Optimal surveillance against foot‐and‐mouth disease: the case of bulk milk testing in Australia

Previous foot‐and‐mouth disease (FMD) outbreaks and simulation‐based analyses suggest substantial payoffs from detecting an incursion early. However, no economic measures for early detection have been analysed in an optimising framework. We investigate the use of bulk milk testing (BMT) for active surveillance against an FMD incursion in Australia. We find that BMT can be justified, but only when the FMD entry probability is sufficiently high or the cost of BMT is low. However, BMT is well suited for post‐outbreak surveillance, to shorten the length of time and size of an epidemic and to facilitate an earlier return to market.     

Risk-Taking Behavior and Capital Adequacy in a Mixed Banking System: New Evidence from Malaysia Using Dynamic OLS and Two-Step Dynamic System GMM Estimators

This study is the first attempt to investigate the relationship between the level of risky assets and capital level in a mixed Malaysian banking system covering 83 months starting December 2006. The results of dynamic ordinary least squares indicate positive relationship between capital ratio (CAR) and risk-weighted asset ratio (RWA) in the long run. Furthermore, the causality analysis based on panel vector error correction model (VECM) and two-step dynamic system generalized method of moments indicates unidirectional causality from CAR to RWA. Our results further suggest that higher capital growth and capital buffer provide an extra cushion for the Malaysian banks to pursue relatively riskier financial activities, and the nature of risk-taking behavior of Islamic banks follows that of the conventional banks.     

Efficiency evaluation of the regional high-tech industry in China: A new framework based on meta-frontier dynamic DEA analysis

This paper proposes a new framework based on the combination of the dynamic DEA, meta-frontier analysis theory, and truncated regression model, and then focuses on the efficiency evaluation of regional high-tech industries in China. For all of the overall technical efficiency, technical efficiency, and scale efficiency scores, the east area is always in the lead, with the central and west areas obviously lagging behind. The eastern area has the highest technology level, whereas the west and central areas fall behind in turn. However, the meta-technology ratio of the west area has rapidly increased and presents a trend of catching up with the east. The variables of GRP per capital, total exports and imports, highway mileage per capita, and ratio of tertiary industry to GRP have positive relationships with technical efficiency, and the time trend exhibits a negative coefficient.