The Interaction of Financial Attitudes and Financial Knowledge: Evidence for Low-Income Hispanic Families

We add to the literature on the association of financial knowledge and financial attitudes with financial outcomes by focusing on predominantly low-income Hispanic families. We examine (i) saving for emergencies, for college, and in 401(k) plans, and (ii) ownership of a home, land or rental property, and an investment account. We find that financial knowledge is strongly related to our savings measures and to owning an investment account. Financial attitudes play less of a role, but assume some importance when interacted with financial knowledge. Self-reported financial knowledge in addition to factual financial knowledge is associated with favorable financial outcomes. Our results are important for the upward economic mobility of a demographic group that has received less attention in the literature.     

Institutional ownership,capital structure,and firm performance

In most studies of ownership and firm performance, researchers have assumed different forms of ownership do not interact in their effect on firm strategy or performance. Focusing on the role of institutional owners, this study poses two related questions: (1) What are the relationships between outside institutional shareholdings, on the one hand, and a firm's capital structure and performance, on the other? and; (2) Does the size of stockholdings by corporate executives, family owners, and insider-institutions modify those relationships? The data, collected from 40 pairs of manufacturing firms selected from as many industries over a 3-year period, shows that the size of outside institutional stockholdings has a significant effect on the firm's capital structure. We have also found that family and inside institutional owners' shareholdings moderate the relationship between outside institutional shareholdings and capital structure. Likewise, corporate executives' shareholdings supplement the relationship between outside institutional shareholdings and firms' performance. These findings suggest that internal and external coalitions interact with each other to influence the firm's conduct.     

A Model of Value Creation: Strategic View

Value creation has long been hailed as the major objective of business firms by many management researchers. Some authors state that a firm must create value for its shareholders; some insist that value must be created not just for shareholders but also for all stakeholders. However, most discussions of value creation do not address an important question: "For whom the value is created?" The purpose of this paper is to take a first step to fill this void and propose a model of value creation along three dimensions: financial, nonfinancial, and time. It is hoped that the model will contribute to a better understanding of how strategic and operational decisions of managers may create value for some stakeholders while destroying it for others.     

Ethnic-immigrants in founding teams: Effects on prospector strategy and performance in new Internet ventures

We investigated differences in strategy and performance between new Internet ventures with ethnic-immigrant members in the founding team and a matched set of Internet ventures with non-ethnic-non-immigrant team members. Results showed that new ventures with an ethnic-immigrant presence in the founding teams tended to pursue a more aggressive prospector strategy than those with non-ethnic-non-immigrant founding team members. Still, performance of the two groups of ventures was comparable. However, the positive effects of ethnic-immigrant presence on founding teams depended on team size and average age of the founding team members.     

Japan's ‘Aid’ to developing countries

Although Japan has now emerged as one of the major donors, next only to the USA, Japanese aid activities have been criticized as being ‘neo-colonial’. Much of the criticism results from the fact that in the total flow of financial resources, the share of the official development assistance and the ‘grant’ element in it is rather small. A much greater proportion of the total flow is directed towards export promotion for Japanese goods and securing the sources of raw materials abroad. The geographical distribution of Japanese assistance gives further grounds for allegations of ‘neo-colonialism’. Around 60 per cent of the total financial flow is directed towards Asia, a little less than half of which is concentrated in South-east Asia. It is almost certain that the total flow in absolute terms will continue to increase; in view of the energy crisis and the likely balance of payments difficulties, it is doubtful whether the current high levels in terms of percentage of GNP will be maintained. If there is to be a cutback it is almost certain that ‘aid’ will suffer more than foreign investments. In terms of proportion of GNP, official development assistance has not reached the target set by the International Development Strategy for the UN Second Development Decade. It is not expected to do so in the foreseeable future.     

Comparative performance of UK mutual building societies and stock retail banks: further evidence

The purpose of this paper is to extend the literature on the comparative performance of mutual and stock retail banks by examining a unique episode in the history of financial services; namely, when four of the largest UK building societies (accounting for approximately 60 per cent of the industry's assets) demutualized to public limited company status in 1997. The episode allows us to consider the relative performance of the same businesses under different organizational forms. The results contrast starkly with previous findings and cast doubt on the hypothesis that mutuals generally outperform stock retail banks and indeed the idea that mutuals can be regarded as a homogeneous group of institutions.     

China's Banking Reform

This article discusses the main problems facing the Chinese banking system and concludes that, despite serious problems, the risk seems small that, in the near future, a financial crisis will occur that will pose severe problems for the international financial system. An internal financial crisis, however, could occur. Without government support, the economic viability of many of China's banks is questionable. The government and central bank authorities acknowledge the situation and have taken some steps toward reform. The most serious threat to the banking system lies in the accumulation of non-performing loans (NPLs)--many of them policybased loans extended by state-owned banks to money-losing state-owned companies with little expectation that they would be completely repaid. China has been taking measures to keep the problem from worsening and has created four asset management companies to dispose of NPLs that still have value. Since the Chinese economic reforms began in 1978, Chinese authorities have made significant progress in modernising their banking system, although they still have a long way to go. However, there are several ameliorating factors that still keep its financial and foreign exchange system viable. China's continued high rate of growth and high savings rate have funneled deposits into the banking system, while a $20-30 billion annual trade surplus together with an inflow of foreign direct investment at about $40 billion per year have resulted in an accumulation of foreign exchange reserves exceeding $200 billion. China does not carry an unusually heavy debt burden, either domestic or international, although its short-term borrowing in foreign currencies has been increasing. China does not currently face a serious risk of either a domestic or international liquidity crisis--unless, of course, a severe and prolonged world recession occurs that adversely affects Chinese exports as well as the inflow of foreign direct investment.     

Damaging democracy? Security provision and turnout in Afghan elections†

In emerging democracies, elections are encouraged as a route to democratization. However, not only does violence often threaten these elections, but citizens often view as corrupt the security forces deployed to combat violence. We examine the effects of such security provision. In Afghanistan's 2010 parliamentary election, polling centers with similar histories of pre‐election violence unintentionally received different deployments of the Afghan National Police, enabling identification of police's effects on turnout. Using data from the universe of polling sites and various household surveys, data usually unavailable in conflict settings, we estimate increases in police presence decreased voter turnout by an average of 30%. Our results adjudicate between competing theoretical mechanisms through which security forces could affect turnout, and show behavior is not driven by voter anticipation of election‐day violence. This highlights a pitfall for building government legitimacy via elections in weakly institutionalized and conflict‐affected states.     

China: A Major Economic Power?

For almost quarter of a century since the U.S. normalization of diplomatic relations with China and the beginning of economic reforms under the leadership of Deng Xioaping, two incidents virtually coinciding together, the PRC has achieved impressive, although not unprecedented, rates of economic growth. The future rate of growth of the Chinese economy will depend not only on continuing economic reforms, but also having a tolerable level of social unrest, and achieving a reasonable level of entrepreneurial and bureaucratic efficiency. On the international side, growth will require access to world markets for Chinese exports, continued access to foreign capital and technology, and regional peace. On current reckoning it seems that economic growth of anything between five and seven percent may continue for the forseeable future. This paper tries to analyze the problems and the prospects of China emerging as a major economic power and it's economic and political implications.     

CORPORATE BOARD SIZE, COMPOSITION AND CORPORATE FAILURES IN RETAILING INDUSTRY[1]

In recent years some activists have advanced proposals to reform corporate boards, notably their structure and process, to assure desirable corporate governance. the empirical question, however, is whether such formal board changes would guarantee good governance. This paper examines this issue by studying the differences in the board size and board composition of 21 pairs of failed and non-failed firms. the results suggest that the non-failed retailing firms, as compared to failed ones, tend to have bigger boards within the size range suggested by the activists. the differences in the percent of outsider directors and multiple offices held by C.E.O.s between the failed and non-failed firms were not significant. Implications of the results for the evaluation of board reforms are discussed.