Board faultlines and the value of cash holdings: Evidence from Chinese listed companies

Faultlines can affect a board of director’s effectiveness in supervising senior managers, which in turn affects the value of a company’s cash holdings. Based on sample data from Chinese A-share listed companies from 2004 to 2016, we examine the relationship between board faultlines and the value of cash holdings. The empirical results indicate that board faultlines have a significant inhibitory effect on cash holding value. This inhibitory effect is stronger for board faultlines resulting from deep-level attributes. Furthermore, the inhibitory effect of board faultlines is stronger in state-owned enterprises (SOEs) than in non-SOEs. As an important governance mechanism, management shareholdings can reduce agency costs and mitigate the negative impact of board fissures on cash holdings. Overall, we enrich the literature on the economic consequences of board faultlines and their influence on cash holding value. We also offer companies practical suggestions for improving the supervisory mechanism of their board of directors.     

市场环境、企业社会责任与基金安全投资转移

当市场环境不好以及不确定性增加时，基金进行安全投资转移。企业积极履行社会责任所形成的声誉资本具有“类保险”作用，在面临负面事件或不确定性环境冲击时能够防止股价大幅下跌和市值损失；基金是否会在市场环境不好时将投资组合转向社会责任绩效更高的股票进行安全投资转移呢？使用2010—2017年开放式基金样本，实证检验了企业社会责任、市场环境与安全投资转移之间的关系。研究发现，在市场环境表现不佳时，基金避险需求增加，倾向将投资组合更多地转向社会责任绩效高的股票进行安全投资转移；进一步研究发现基金和基金经理特征影响基金的安全投资转移行为，净资金流入较少、历史业绩差、经理选股能力差的基金根据企业社会责任进行安全投资转移的程度大。研究还发现，基金的安全投资转移行为对基金业绩和基金收益波动产生了积极影响。     

The evolving 5G case study in United States unilateral spectrum planning and policy

This paper tracks increasingly aggressive initiatives by the United States government to reallocate spectrum on an expedited and unilateral basis well before conclusion of inter-governmental coordination. Rather than embrace the customary commitment to achieve consensus on global spectrum allocations at the International Telecommunication Union (“ITU”), the Federal Communications Commission (“FCC”) has auctioned off large blocks of frequencies for the next generation (“5G”) of wireless services.The FCC might have framed its first 5G auction, reassigning Ultra High Frequency (“UHF”) spectrum, as a one-time deviation from compliance with long standing, intergovernmental coordination procedures. These frequencies have ideal signal propagation characteristics and the Commission could use financial incentives—unavailable in most nations—to expedite “repacking” by incumbent broadcasters willing to move, share or abandon spectrum in exchange for ample financial compensation. However, the FCC has continued to auction off 5G spectrum on grounds that it must find ways to abate an acute shortage of wireless bandwidth and doing so will regain or maintain global leadership in wireless technologies. This paper offers a critical rebuke to unilateral spectrum management, because the short-term benefits expected by the U. S. government likely will be offset by countervailing harms to 5G manufacturers, carriers and consumers. The paper tracks fractious preparation for the ITU's 2019 World Radio Conference by the U.S. delegation and the mixed record achieved there. Additionally, the paper explains how injecting trade, industrial policy and national security issues at the ITU can trigger more delays and disputes, including possible retaliation by nations displeased with U.S. efforts to subvert traditional technology optimization goals.A worst case scenario has the ITU deadlocked and unable to reach closure on “mission critical” spectrum planning issues at World Radio Conferences, convened every four years. The paper concludes that costs and likely challenges to the efficacy and legitimacy of the ITU will reduce the benefits accruing from the FCC's unilateral, spectrum planning campaign.     

The use of landslide hazard maps to determine mitigation priorities in a dam reservoir and its protection area

Despite longstanding research on the landslide hazard assessment and mapping, the use this information in regional planning applications remains largely unclear. There is still a need for novel methods to interpret the results of hazard analyses. In this respect, the main research question of this study is how the landslide hazard maps can be evaluated in planning practice. To evaluate this issue, a comprehensive case study was carried out and a new methodology, defining the order of priority for the locations where mitigation measures are applied was developed. The investigations were carried out in the Melen Dam reservoir, which provides potable water to the city of Istanbul, and the dam protection area (Duzce, Turkey) in four main stages: (i) Evaluation of the general characteristics of the study area, (ii) preparation of landslide inventory, (iii) development of landslide hazard model, and (iv) implementation of the results of hazard analyses in planning. As a consequence, a decision support system that can evaluate analytically complicated outputs “P_Combined”, “P_{AL min.}”, and “L_Total” and provide clear decisions “Urgent”, “Primary”, and “Secondary” was suggested. Considering the limited resources available for the mitigation measures, the determination of mitigation priorities for the micro-catchments constitutes the key land-use policy for the protection of the dam reservoir.     

LADM-based profile for farmland Tripartite Entitlement System in China

Since the beginning of the 21st century, China has undergone a promotion of industrialisation, urbanisation and agricultural modernisation. This promotion has triggered the mass migration of rural labour forces into cities, leading to the virtual situation of the separation of farmland contract and operation rights. To respond to this issue, the central government proposed a strategy of farmland reform in China. Such reform aims to transform the former ‘Bipartite Entitlement System’ into a ‘Tripartite Entitlement System (TES)’.¹ Land registration provides the means for recognising formalised property rights and regulating the characteristics and transfer of land-related rights. As for farmland registration in China, it serves as a basis to explore effective forms of collective farmland ownership by implementing collective farmland ownership, stabilising farmers’ contract rights and liberalising farmland operation rights. Thus, in this study, on the basis of the farmland tripartite entitlement (hereinafter referred to as ‘FTE’) reform in China, we develop a Land Administration Domain Model (LADM)-based TES model that will serve as the basis of subsequent system development. Specifically, first, we summarise the evolution process of China’s farmland rights system since the foundation of new China. Second, we propose a farmland rights system after the FTE reform. Then, the corresponding TES model is developed based on the LADM standard and some instance-level diagrams for farmland administration activities. The new functionality of the model includes improved structuring of farmland rights and restrictions (and related source documents) and improved expansion of the land information infrastructure to rural areas.     

Relationships between absenteeism,conservation group membership,and land management among family forest owners

Absentee landowners, or those who do not live on their forestland, own approximately 117 million acres of private forestland in the U.S. Thus, their land management decisions and activities influence the flow of forest-based goods and services. We explore the question of whether absentee family forest owners are less active land managers than resident landowners and whether membership in conservation organizations is associated with higher levels of land management activity by absentee owners. To examine these questions, we administered a mail survey to randomly-selected family forest landowners in Indiana. While we found some support for the contention that absentee owners are less active forestland managers than resident owners, we also found they are not necessarily inactive landowners. We found absentee owners were less likely to have: inspected their forestland for invasive plants, pulled or cut invasive plants, used herbicides to kill invasive plants, reduced fire hazard, or grazed livestock than resident owners. Absentee owners were more likely to be enrolled in the Indiana Classified Forest and Wildlands Program, a preferential forest property tax program. Absentee owners who are members of a conservation organization were more likely than absentee non-member owners to have undertaken a variety of land management activities, including: undertaking wildlife habitat improvement projects, inspecting their forestland for invasive plants, pulling or cutting invasive plants, enrolling in the Indiana Classified Forest and Wildlands program, and obtaining a management plan.     

High-frequency credit spread information and macroeconomic forecast revision

We examine whether professional forecasters incorporate high-frequency information about credit conditions when revising their economic forecasts. Using a mixed data sampling regression approach, we find that daily credit spreads have significant predictive ability for monthly forecast revisions of output growth, at both the aggregate and individual forecast levels. The relationships are shown to be notably strong during ‘bad’ economic conditions, which suggests that forecasters anticipate more pronounced effects of credit tightening during economic downturns, indicating an amplification effect of financial developments on macroeconomic aggregates. The forecasts do not incorporate all financial information received in equal measures, implying the presence of information rigidities in the incorporation of credit spread information.     

Forecasting value at risk and expected shortfall with mixed data sampling

I propose applying the Mixed Data Sampling (MIDAS) framework to forecast Value at Risk (VaR) and Expected shortfall (ES). The new methods exploit the serial dependence on short-horizon returns to directly forecast the tail dynamics of the desired horizon. I perform a comprehensive comparison of out-of-sample VaR and ES forecasts with established models for a wide range of financial assets and backtests. The MIDAS-based models significantly outperform traditional GARCH-based forecasts and alternative conditional quantile specifications, especially in terms of multi-day forecast horizons. My analysis advocates models that feature asymmetric conditional quantiles and the use of the Asymmetric Laplace density to jointly estimate VaR and ES.     

The effect of mergers and acquisitions on environmental,social and governance performance and market value: Evidence from EU acquirers

This study explores the effect of environmental, social, and governance (ESG) performance on market value and performance in the context of mergers and acquisitions. We examine whether acquisition of targets with better ESG performance can help acquirers to increase their own ESG performance and whether the market values the increased ESG performance positively. Moreover, we explore whether the acquisition of targets with better ESG performance affects the market value of acquirers. For this study, we utilize a sample of 100 European mergers and acquisitions between 2003 and 2017, for which matching data on the ESG performance of both the target and acquiring firms are available. Our results show that the postmerger ESG performance of the acquirer increases following the acquisition of a target that has higher ESG performance than that of the acquirer in the premerger stage, whereas the postmerger market value of the acquirer increases following an increase in the acquirer's postmerger ESG performance in relation to its premerger ESG performance. Finally, we provide partial evidence of a positive relationship between the postmerger market value of the acquirer and the acquisition of a target with higher ESG performance than itself in the premerger stage.     

Do institutional investors drive corporate transparency regarding business contribution to the sustainable development goals?

Institutional investors show increasing interest in how companies align their corporate social responsibility strategies with the sustainable development goals (SDGs) proposed by the United Nations (UN). The information disclosed in this regard is essential to know and monitor business contribution to the 2030 Agenda. In this paper, we analyze the influence that institutional investors have on the adoption of the disclosure strategy established by UN and the Global Reporting Initiative (GRI)—GRI‐SDG Compass. The results obtained for a sample of 989 international companies, which prepare their sustainability reports following the GRI guidelines, show that ownership by foreign investors, pension funds, and “other” investors boosts the relevance of the information disclosed in relation to the 2030 Agenda. On the contrary, government, financial institutions, and cross holdings have no impact on the information systems developed.