Infrastructure Bond Markets Development in Asia: Challenges and Solutions

To sustain economic growth momentum, Asia needs to continue investing heavily in infrastructure such as roads, ports, and power plants. Financing the region’s huge demand for infrastructure investments is an essential issue for policy-makers across the region. Against the backdrop of expanding fiscal burdens of Asian governments and more stringent capital requirements on bank lending, local currency bonds can serve as an alternative for infrastructure financing in Asia. In this paper, we use empirical analysis to identify the major determinants of infrastructure bond market development. Evidence indicates that an economy’s size is positively related to infrastructure bond market development. Furthermore, we find that Project Bond Initiative, a European Union initiative, contributed significantly to infrastructure development in Europe. The implication for Asian policy-makers is that deepening regional integration of Asian bond markets would help Asian economies to reach an efficient economic scale to foster infrastructure bond market and policy measures in the forms of credit enhancement would facilitate issuance of infrastructure bonds.     

The fall of high-frequency trading: A survey of competition and profits

We investigate high-frequency trading (HFT) strategies, inventorying the strategies already studied in the literature and introducing innovative strategies detected by private institutional research. To this end, we expand the existing classification, and we offer names for new categories. In a complementary but original manner, we introduce counter reactions from professional traders in response to HFT predatory strategies. These human answers reverse the usual framework of competition between high-frequency traders (HFTs) and low frequency traders (LFTs) and also widen this cadre to HFTs algos (predators) versus execution algos.This survey notes that a continuous increase in competition, between high-speed trading algorithms themselves through predatory strategies and from professional human traders adapting and building adequate responses has made the business more difficult and has led to shrinking profits for HFT. In the end, we believe that excessive competition and a change in the current regulation (favorable to HFT) could kill the goose that laid the golden egg.     

中国企业海外研发机构组织与管理问题述评

随着中国企业从“制造商”向“投资家”的转变，建立海外研发机构进而充分利用国际市场创新成果，成为中国企业实现创新驱动的重要转型升级道路。尽管现有研究已经充分认识到后发国家企业建立海外研发机构的动机和组织管理特征有别于发达国家企业，但遗憾的是针对后发企业设立海外研发机构的组织与管理问题的详细分析还没有系统展开，研究结论比较分散。以此为切入点，对比式地梳理国外企业和中国企业海外研发机构设立动机、进入模式、战略定位和组织形式等若干海外研发组织与管理核心问题，在此基础上提出中国企业海外研发机构的潜在研究方向。结论有利于弥补已有海外技术投资领域对新兴市场企业关注不足的缺陷，可为未来中国企业海外研发机构的实证研究提供文献基础。     

Corporate Social Responsibility Amid Social Distancing During the COVID-19 Crisis: BRICS vs. OECD Countries

This paper compares today’s corporate management in developing markets (BRICS countries) vs. developed markets (the OECD countries). The influence of determining a new social corporate management season considering social distancing amid the COVID-19 pandemic on emerging markets' economic growth is ascertained and set apart from corporate management in developing markets. This paper helps clarifying and better understanding the role of corporate social responsibility in the conditions of an economic crisis against the background of the COVID-19 pandemic. This work provides scientific arguments that allow solving critical discussions regarding the advantages (growth of quality of life, an increase of business's competitiveness) and costs (limitation of economic growth, non-commercial use of profit, and increased price for goods and services) of domestic production and consumption. In the long-term, responsible financial practices return all investments and allow countries to better cope with a crisis. The research supplies a new view of corporate social responsibility as a measure of crisis management. It reflects its advantages at a time of social distancing in the conditions of the COVID-19 pandemic. The institutionalization of corporate social responsibility in emerging countries is not predetermined by internal factors (approach to doing business or organizational culture), if not by external factors (market status, state regulation, and consumer awareness). These circumstances prove the high complexity of strengthening corporate social responsibility in developing countries. In the conditions of social distancing – due to the COVID-19 pandemic – corporate social responsibility goes to a new level. In both developing and developed countries, one of the most widespread manifestations of corporate social responsibility is the entrepreneurship's transition to the remote form of activities. This envisages the provision of remote employment for workers and the online purchase of goods and services for consumers.     

In the service of the society: The labour management practices of an Australian life Insurer to 1940

This article considers the labour management practices in use in the Australian life insurance industry during the inter-war period. Using the Australian Mutual Provident as a case study, it is argued that the specific human resource management practices evolved to deal with separate sets of problems arising from the functions of the life insurance business and the manner in which the principal/agent problem was manifested. The differing nature of work associated with the sales and management of life insurance fostered the development of primary and secondary labour markets in which the benefits flowing to one were superior to those accruing to the other.     

The peer effect of corporate financial decisions around split share structure reform in China

We examine the peer effects in financial decisions of Chinese listed companies for the period of 1998–2016 as well as around Split Share Structure Reform (SSSR). Consistent with the information‐based theory of learning, Chinese firms do adjust their capital structure in response to the changes in their peers’ market leverage ratios. The industries that are more competitive, with more young firms, and high leverage volatility tend to exhibit stronger peer effects. Within industries, the firms with lower market share and profits, paying no dividends, and being financially constrained mimic their peers more strongly than their counterparts. The evidence around the SSSR reveals that firms tend to follow their industry peers and leaders more closely in making financial decisions after the reform. Finally, the mimicking behavior in financial decisions enhances firm value in the long run and this finding is more evident after the reform.     

An overview of returns in Europe

This paper is an attempt to present a digest of European security returns. In this respect, Table 7 summarizes key data over recent years. The table presents information for the period 1967 to 1990. By and large, within Europe, equity returns appear to be very similar. To the extent that if differences exist, they can probably be attributed to too short a period for utterly unambiguous data on returns to be achieved. But there may be another explanation which relates to an international capital asset pricing model and the sinews of this topic are explored towards the end of the paper. Data are presented which compare and contrast the part played by equity markets in the structure of corporate financing in Europe. These show the contrasting cult of the equity share, with its high emphasis in Britain and much lower role in Germany and France, for example. Other statistics reveal differing share ownership structures and pension fund portfolio distributions in European countries. That the topic of realized European security returns requires further research is obviously the case. It is hoped that this paper — and others in this issue — will stimulate a desire to undertake the necessary investigations.     

Pricing Dynamic Insurance Risks Using the Principle of Equivalent Utility

We introduce an expected utility approach to price insurance risks in a dynamic financial market setting. The valuation method is based on comparing the maximal expected utility functions with and without incorporating the insurance product, as in the classical principle of equivalent utility. The pricing mechanism relies heavily on risk preferences and yields two reservation prices - one each for the underwriter and buyer of the contract. The framework is rather general and applies to a number of applications that we extensively analyze.     

Trade policy and Spanish specialization, 1978-93

This article uses a simplified general equilibrium model to analyse the short and long run incidence of trade policy in Spain between 1978 and 1993. The incidence model is usually specified in an inter-industry framework, with increasing tariffs and either increasing or non-existent export subsidies. However, in this paper it is applied in a period of rapid liberalisation and with an intra-industry pattern of trade. The results, based on seasonal integration and cointegration techniques, show that, in the long run, the prices of exportables relative to non-tradables followed the fall in prices of import-competing goods. Hence, the effect of the liberalization process that took place in Spain during this period was precisely the intended one - that is to say, the enhancement of the competitiveness of the tradable sector as a whole. The slow reaction on the part of suppliers in shifting production from importables to exportables resulted in a certain gap between relative prices of tradables only in the short-run. In the end, the effect of trade policy was to create incentives for the reallocation of resources to the production of non-tradables.     

Does the fourth entrant make any difference?: Entry and competition in the early U.S. broadband market

We study the importance of sunk costs in determining entry conditions and inferences about firm conduct in an adapted Bresnahan and Reiss (1991, 1994) framework. In our framework, entrants incur sunk costs to enter, while incumbents disregard these costs in deciding on continuation or exit. We apply this framework to study entry and competition in the local U.S. broadband markets from 1999 to 2003. Ignoring sunk costs generates unreasonable variation in firms' competitive conduct over time. This variation disappears when entry costs are allowed. Once the market has one to three incumbent firms, the fourth entrant has little effect on competitive conduct.