The long-run reversal in the long run: Insights from two centuries of international equity returns

We perform the most comprehensive test of long-term reversal in national equity indices ever done. Having examined data from 71 countries for the years 1830 through 2019, we demonstrate a strong reversal pattern: the past long-term return negatively predicts future performance. The phenomenon is not subsumed by other established cross-sectional return patterns, including the value effect. The long-term reversal is robust to many considerations but highly unstable through time. Finally, our findings support the overreaction explanation of this anomaly.     

Institutional quality and corporate financing decisions around the world

We investigate the influence of the recent comprehensive institutional quality dimensions of Karolyi (2015), such as market capacity, operational efficiency, foreign accessibility, corporate transparency, legal protection, and political stability, on financing decisions of firms across 56 countries between 2000 and 2015. We find that stronger institutional quality or lower fundamental risks in a country ease firms' access to long-term debt, and equity financing. We attribute our results to institutional environments influencing financing decisions by shaping the severity of market frictions, such as agency conflicts and information asymmetry, and transaction costs. As a result, we conclude that any improvement in a country's institutional environment will boost firms' access to long-term financing, and thus longer-term investments that promote countries' economic growth will be more feasible. Our findings are robust to potential endogeneity issues.     

The social process of internet appropriation: Living in a digitally advanced country benefits less well-educated Europeans

We generalize and extend the sequential model proposed by the resources and appropriation theory to explain the digital divide in the European Union plus the United Kingdom (EU27+UK). We measure the theoretical constructs of the model with data provided by the EU and test the theoretical predictions using a partial least squares structural equation model. We find support for the hypothesized relationships but find that the effects vary depending on the digital development level of countries. While education overall is the primary determinant of the social production of digital inequalities, a country's digital development level is crucial for less well-educated Europeans. These findings have theoretical and practical implications: (1) they call into question the homogeneity of the effect of causal relationships and the assumption that individuals differ only in terms of motivation, access, and digital skills, and (2) they indicate that socially disadvantaged Europeans benefit from living in more digitally developed countries.     

Challenging the obsession with local level institutions in country ownership of climate change adaptation

Working with local level actors to enable country ownership is applauded within the multilateral climate finance landscape. However, are emerging adaptation interventions equitable by reflecting the priorities of local level vulnerable populations? This research sought to find out whether the engagement of local institutions in projects that seek to achieve country ownership enabled local level vulnerable groups to participate in and influence adaptation decision-making processes and outcomes, thereby enabling them to have a voice in local level adaptation. It used a case study of a Global Environmental Facility-managed coastal adaptation project in Tanzania, which sought to restore and protect mangroves to enable adaptation to sea level rise. Data was generated from 13 Focus Group Discussions and survey questionnaires administered to 629 individuals in three locations on the mainland of Tanzania and in Zanzibar. The findings indicate that community-based organizations were used to facilitate the implementation of project activities at the community level. However, participation spaces created in the project and facilitated by these local institutions were exclusionary and failed to enable vulnerable community groups to have a voice on mangrove restoration and protection. Use of these local institutions altered local level power relations and disempowered other pre-existing and (in)formal local resource management institutions. Community members questioned legitimacy of actions implemented by these local institutions. These findings suggest that working with local level stakeholders to generate country ownership does not automatically guarantee that actions will address the needs of local vulnerable groups. Multilateral climate finance institutions should acknowledge these risks and implement measures to address them.     

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.     

Safety risk and international investment decisions

We identify and demonstrate the merit of a novel institutional factor, safety risk, which likely affects multinational corporations’ (MNCs’) international investment decisions. Safety risk refers to the extent to which security and physical well-being are endangered due to normalized aggression and criminality in society. Despite concerns from executives and policymakers, safety risk has attracted little research attention. We validate a safety risk measure and evaluate the construct’s effect on MNCs’ investments. The findings indicate that countries’ safety risk deters MNCs from investing. Further, in post hoc analyses, firms’ prior experiences with safety risk and countries’ private security investments moderated this relationship.     

The effect of economic policy uncertainty on China’s housing market

This study examines the relationship between economic policy uncertainty (EPU) and housing price at the macro-level in China as a developing country. The empirical evidence indicates that EPU has a leading effect on China’s housing market. In general, the housing market is prosperous when economic policy is stable and there is a positive relationship between housing price variation and EPU, which means housing market risk grows under unstable economic policies in this developing economy. Moreover, economic policy variation affects low-amplitude changes in housing prices. A variation of policy uncertainty enhances the risk premium of the housing market. By contrast, the level of EPU influences high-amplitude changes in housing prices, which reflects the trend of EPU dominating China's housing market.     

Determinants of mobile broadband use in developing economies: Evidence from Sub-Saharan Africa

Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries’ development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that SIM card ownership and being part of an online social community has a strong positive impact on mobile broadband use. We also highlight a positive correlation between digital inclusion and financial inclusion as mobile money users and bank account users are found to be more inclined to use mobile broadband. However, beyond apparent similarities, mobile broadband is used in different ways according to countries specificities. For instance, among the non-mobile owners in Nigeria, the unemployed are the most likely to use mobile broadband, most probably for job search practices, while it is rather used by students for information gathering in other countries. Finally we show that those excluded from mobile broadband use are the eldest, those with the lowest level of education, and women.     

The role of affinity and animosity on solidarity with Ukraine and hospitality outcomes

The tourism and hospitality industry has had to make some hard decisions during the year 2022. Many major hotel chains have had to decide whether to stay or pull out of Russia, and which policies to implement toward individual Russian guests at their hotels outside of Russia. This study investigates solidarity as an important factor to understanding the conflict and its ramifications for the hospitality industry. The authors explore whether solidarity with Ukraine is driven by affinity toward Ukraine, or by animosity toward Russia. Further, the study demonstrates that place solidarity impacts two specific outcomes in the hospitality industry. The paper concludes by outlining implications for scholars and practitioners.     

Organizing anarchy: The food security–biodiversity–climate crisis and the genesis of rural land use planning in the developing world

Shortfalls in global food production, coupled with the growing visibility of climate change's disruptive effects, have underlined for many observers the importance of devoting rural lands to their ‘optimal’ use, where they can make maximal contributions to the global imperatives of feeding the human population and maintaining vital environmental services. In this context observers have endorsed rural land use planning as a way to insure that, at least in theory, lands get devoted to their best uses. In practice, land use planning in the developing world has resembled ‘organized anarchy’. Small landholders with insecure land tenure, overseas investors seeking large land deals, NGOs representing indigenous peoples, government officials, and staff from international environmental NGOs and multilateral organizations have come together in strategic action fields to struggle over and sometimes negotiate land use plans for contested landscapes. These plans represent a strategic, spatially explicit response to the climate change–biodiversity–food security crisis.