Non-rating revenue and conflicts of interest

Rating agencies produce ratings used by investors, but obtain most of their revenue from issuers, leading to a conflict of interest. We employ a unique data set on the use of non-rating services, and the associated payments, in India, to test if this conflict affects ratings quality. Agencies rate issuers that pay them for non-rating services higher (than agencies not hired for such services). Such issuers also have higher default rates. Both effects are increasing in the amount paid. These results suggest that issuers which hire agencies for non-rating services receive higher ratings despite having higher default risk.     

Changing investment styles: style creep and style gaming in the hedge fund industry

Notwithstanding their common features, hedge funds remain an extremely diverse asset class. Information on fund styles is important for numerous purposes, such as portfolio construction, performance attribution and risk management. With fund self‐declaration being prone to (strategic) misclassification, return‐based taxonomies grouping funds along similarities in realized returns provide a useful alternative. We provide a consistent classification system of homogeneous groups of hedge funds based on self‐organizing maps. Whereas some fund categories such as managed futures are largely consistent in their self‐declared strategies, others, especially so‐called ‘equity hedge’ funds, display no or very limited return similarities. Furthermore, we also find evidence of fund managers performing undisclosed changes of their trading style over time. Those funds that misclassified themselves once are particularly likely to change their trading style again. Although style self‐declaration can, therefore, be quite misleading, our results indicate that hedge funds do not misdeclare their style strategically to improve their relative performance. Copyright © 2006 John Wiley & Sons, Ltd.     

The Internet of Things (IoT) in retail: Bridging supply and demand

A sales channel serves two primary functions: delivering information and products to customers. Omnichannel retailing allows for the decoupling of these two functions as consumers can learn about products through channels that differ from those used to purchase them. This separation requires a sophisticated inventory and supply chain operation, as well as integration of all customer touchpoints, in order to match fast-moving supply and demand. The Internet of Things (IoT) can play a fundamental role in channel integration because it allows companies to rebalance supply and demand. We classify IoT initiatives on an opportunity map, presenting a strategic framework that distinguishes initiatives by the value they create and by their major area of impact. We justify the adoption of IoT in terms of its enabling capabilities—those immediately realized by deploying IoT sensor data—but its true potential resides in its enhancing capabilities—unanticipated benefits following IoT adoption—at the intersection of supply and demand.     

Transdisciplinary Research in Sustainable Operations – An Application to Closed‐Loop Supply Chains

This contribution provides implications for academic research and practitioners, as it identifies the lack, necessity and major benefits of transdisciplinary research and the collaboration of academics and industry in order to fulfill the goals of a sustainable supply chain. Closed‐loop supply chain management is a major contributor to implementing sustainable operations. An essential prerequisite for successful realization is the expertise and cooperation of representatives from engineering, management and natural sciences as well as practice. We identify a need for transdisciplinary collaboration within two steps. First, a literature review points out that various research disciplines as well as practice mostly operate in isolation. Second, we develop a framework that highlights the benefits of collaboration between these research areas. This paper provides an overview to better understand current trends in this complex field, which is a rich area for research that is still in its infancy. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Financial Liberalization and Institutional Development

This study empirically analyzes the effects of de jure financial openness on institutional quality as captured by indicators on investment risk, corruption level, impartiality of judiciary system, and the effectiveness of bureaucracy. We show that a higher degree of financial openness improves institutional quality mainly by reducing investment risks. We also study the effect of a single liberalization reform. Again, we find evidence for the beneficial impact of financial liberalization with the exception of corruption. We additionally show that the benign consequences of financial opening for the institutional development are even larger if financial liberalization is supported by simultaneous political liberalization, while financial deregulation in former socialist countries tends to worsen institutional quality.     

Study on mobile phone use while driving in a sample of Iranian drivers

The use of cell phone is a significant source of driver distraction. Phone use while driving can impair a number of factors critical for safe driving which can cause serious traffic safety problems. The objective of this paper was to investigate the frequency of using cell phones while driving in Iran's roads through an observational survey with a random sample of drivers, to recognize contributing factors to cell phone usage and to understand the magnitude of the problem. A total of 1794 observations were collected from 12 sites at controlled intersections, entrance and exit points of highways. The cell phone use rate among drivers (talking or texting) was estimated at 10% which is significantly higher than that in other countries such as Australia, USA and Canada. Rate of cell phone use among younger drivers (14.15%) was higher in comparison with other groups. In order to identify factors affecting cell phone use while driving, a binary logit model is estimated. Variables which significantly contribute to the rate of using cell phone were found to be the age of driver, number of passengers, presence of kids under the age of 8, time of observation, vehicle price and type of car.     

Impacts of Privatization of Customary Land Rights in Zambia: A Comparative Study of Rural and Peri‐urban Locations

In its quest for development, Zambia is pursuing a land policy that facilitates privatization of customary land. This article investigates the effects of privatization in terms of how it shapes people's behaviour and perception of private tenure and related tenure dynamics. Findings have shown that the appetite to privatize land is growing stronger in peri‐urban areas as land becomes more scarce. Furthermore, privatization of land appears to be a threat to traditional political structures as allegiance and loyalty towards chiefs diminish and tension and struggles over land in peri‐urban areas increase. Similarly, privatization of land erodes people's faith in the role that cultural and ancestral beliefs play in traditional land management. Also, people in rural areas tend to favour private tenure more if ‘privatization of customary land’ means allocation of land to outsiders. If, by contrast, the phrase is taken to mean communities registering their own land, peri‐urban communities tend to have a stronger desire to register land. Furthermore, rural communities were found to be less informed about land policy and seemed less keen to be involved in land policy processes when compared to peri‐urban residents. However, rural people may have no reason to inform themselves about land policy until they realise that the policy is likely to affect them.     

Surviving bear hugs: Firm capability,large partner alliances,and growth

In exploring the downsides of partnering with large firms, extant literature has typically focused on the external perspective and the alliance characteristics of small firms. We argue that jointly considering the internal dimension of firm capability together with the external perspective promises to yield a fuller understanding of the nature and consequences of a small firm's relationships with large partners. We analyze a longitudinal dataset on the alliance activities and growth of small, independent studios in the U.S. motion picture industry during 1990–2010. Our findings indicate that small firms that engage in higher levels of alliance activity with large partners, i.e., the major studios, realize lower growth benefits from their internal capability. Copyright © 2013 John Wiley & Sons, Ltd.     

Financial integration in autocracies: Greasing the wheel or more to steal?

This paper analyzes the influence of financial integration on institutional quality. We construct a dynamic political-economic model of an autocracy in which a ruling elite uses its political power to expropriate the general population. Although financial integration reduces capital costs for entrepreneurs and thereby raises gross incomes in the private sector, the elite may counteract this effect by increasing the rate of expropriation. Since de facto political power is linked to economic resources, financial integration also has long run consequences for the distribution of power and for the rise of an entrepreneurial class.