An appraisal framework for evaluating financing approaches for public infrastructure

Innovative financing solutions for public infrastructure megaprojects require new approaches to assess the various financing portfolios being proposed. This paper discusses a range of international financing models and presents a new multi- criteria appraisal framework for assessing alternative ways of raising capital. The proposed framework combines elements of a multi-criteria analysis and cost benefit analysis, and incorporates both monetary and intangible impact measures to facilitate the selection of a financing approach that is in society’s best interest.     

An examination of future scenarios using historical analogy

The quality of scenario planning activities can be difficult to assess, as one cannot know how likely any projected future scenario is. Here, we introduce one approach for gaining greater confidence. Historical analogy provides the means for achieving this, whereby the model upon which scenarios are constructed is analysed in terms of how well it predicts and establishes links with recent historical environments. We apply this approach to a previously developed scenario tree, constructed using the field anomaly relaxation method, as a case study to indicate how historical analogy can be used to assess and enhance the model from which the scenarios are constructed.     

An assessment of the waste effects of corruption on infrastructure provision

In this paper, we investigate the association between the efficiency of infrastructure provision and the level of corruption, in the province in which the infrastructure takes place, employing a large dataset on Italian public works contracts. We, first, estimate efficiency in public contracts’ execution using a smoothed DEA bootstrap procedure that ensures consistency of our estimates. Then, we evaluate the effects of corruption using a semi-parametric technique that produces a robust inference for an unknown serial correlation between efficiency scores. In order to test the robustness of our results, the parametric stochastic frontier approach has also been employed. The results from both nonparametric and parametric techniques show that greater corruption, in the area where the infrastructure provision is localised, is associated with lower efficiency in public contracts execution.     

世界银行贷款项目评标实例

某世行贷款项目国际招标的招标广告2000年10月18日刊登于中国日报.     

Profitability of Momentum Strategies: An Evaluation of Alternative Explanations

This paper evaluates various explanations for the profitability of momentum strategies documented in Jegadeesh and Titman (1993). The evidence indicates that momentum profits have continued in the 1990s, suggesting that the original results were not a product of data snooping bias. The paper also examines the predictions of recent behavioral models that propose that momentum profits are due to delayed overreactions that are eventually reversed. Our evidence provides support for the behavioral models, but this support should be tempered with caution.     

Scenario planning interventions in organizations: An analysis of the causes of success and failure

This paper presents a case analysis of a successful scenario intervention in an organization. This intervention is compared and contrasted with an unsuccessful one reported in Hodgkinson and Wright [Confronting strategic inertia in a top management team: learning from failure, Organization Studies 23 (2002)949-977]. We demonstrate that analysis of the answers given by workshop participants in a pre-intervention interview can be helpful in determining the receptiveness of an organization to a subsequent scenario intervention. We theorize that strategic inertia-characterized by coping patterns of bolstering failing strategy, procrastination (over a strategic dilemma) and buck-passing (the responsibility for the dilemma's resolution), can be caused by the psychological attenuation of the perceived level of environmental threat to the organization, culminating in unconflicted adherence to the currently followed strategy. We contend that the expression of such coping behaviour is antithetical to a subsequent successful scenario exercise since, if the exercise fails to identify an unconflicted strategic alternative, the sharp focus of the scenarios on futures unfavourable to business-as-usual strategy will re-activate the cognitive stress-reduction mechanisms. Strategic inertia will thus be reinforced. We conclude with a review of the implications of our diagnosis for reflective practitioners.Our paper is divided into four sections. In Section 1, we overview writings on inertia in strategic decision making. We pay especial attention to identifying potential causes of inertia. Next, we present Janis and Mann's [Decision Making, Free Press, New York, 1979] views of the psychological processes invoked by conflicted decisions and analyse the relevance of this laboratory-based theory to provide a psychological explanation of strategic inertia. Finally, we briefly describe the scenario intervention process and argue that it contains the potential to overcome strategic inertia. In Section 2, we review an already-published study of an unsuccessful scenario planning intervention, which illustrates the operation of components of Janis and Mann's model. Next, in Section 3, we focus on our own case investigation of a successful scenario planning intervention. The early part of this section documents the “success”, whilst the latter part analyses the causes of the success—again using the components of Janis and Mann's model. We conclude in Section 4, where we compare and contrast the application of Janis and Mann's model to both cases and we demonstrate that application of the model to pre-intervention interview data can aid the practitioner determine, at the outset, whether or not the organizational context will be receptive to the intervention.     

The identification of acquisition targets in the EU banking industry: An application of multicriteria approaches

In this paper we develop classification models for the identification of acquisition targets in the EU banking industry, incorporating financial variables that are mostly unique to the banking industry and originate from the CAMEL approach. A sample of 168 non-acquired banks matched with 168 acquired banks is used over the period 1998-2002, covering 15 EU countries. We compare and evaluate the relative efficiency of three multicriteria approaches, namely MHDIS, PAIRCLAS, and UTADIS, with all models developed and tested using a 10-fold cross validation approach. We find that the importance of the variables differs across the models. However, on the basis of univariate test and the results of the models we could state that in general after adjusting for the country where banks operate, acquired banks are less well capitalized and less cost and profit efficient. The results show that the developed models can achieve higher classification accuracies than a naïve model based on random assignments. Nevertheless, there is fair amount of misclassification that is hard to avoid given the nature of the problem, showing that as in previous studies for non-financial firms, the identification of acquisitions targets in banking is a difficult task.     

Predicting Corporate Bankruptcy: An Evaluation of Alternative Statistical Frameworks

Corporate bankruptcy prediction has attracted significant research attention from business academics, regulators and financial economists over the past five decades. However, much of this literature has relied on quite simplistic classifiers such as logistic regression and linear discriminant analysis (LDA). Based on a large sample of US corporate bankruptcies, we examine the predictive performance of 16 classifiers, ranging from the most restrictive classifiers (such as logit, probit and linear discriminant analysis) to more advanced techniques such as neural networks, support vector machines (SVMs) and “new age” statistical learning models including generalised boosting, AdaBoost and random forests. Consistent with the findings of Jones et al. ( 2015 ), we show that quite simple classifiers such as logit and LDA perform reasonably well in bankruptcy prediction. However, we recommend the use of “new age” classifiers in corporate bankruptcy modelling because: (1) they predict significantly better than all other classifiers on both the cross‐sectional and longitudinal test samples; (2) the models may have considerable practical appeal because they are relatively easy to estimate and implement (for instance, they require minimal researcher intervention for data preparation, variable selection and model architecture specification); and (3) while the underlying model structures can be very complex, we demonstrate that “new age” classifiers have a reasonably good level of interpretability through such metrics as relative variable importances (RVIs).     

Problems with precaution: the transfusion medicine experience

The precautionary principle is a dominant paradigm governing risk-based decision-making. Today, there are increasing pressures to re-examine aggressive precautionary approaches, and to assess how the principle should be applied in the modern system. In this paper, we examined three key applications of precautionary approaches in the field of transfusion medicine to provide insight into the risks and benefits of these approaches. The three case studies examined were the donor deferral policies to safeguard against transfusion transmission of human immunodeficiency virus, variant Creutzfeldt–Jacob disease, and, lastly, xenotropic murine leukemia virus-related virus. Characterization of precautionary applications was conducted using an embedded case study design. Our findings indicate that transfusion transmission mitigation strategies have become increasingly aggressive in the face of theoretical risks. In contrast, the review processes for implementation and reversal of precautionary policies have been slow, and historical donor deferral policies are still in place today. Application of precautionary approaches has proved challenging with both benefits and pitfalls. In light of emerging threats to the blood system, policy-makers should consider the implementation of frameworks to guide the appropriate application of precaution in transfusion medicine in the future.     

Growth accounting with investment-specific technological progress: A discussion of two approaches

Two approaches taken to the embodiment question are compared and discussed: quantitative theory and traditional growth accounting. The two approaches give very different estimates for the contribution of investment-specific technological advance to economic growth. Therefore, the approach taken matters. It is argued that the measures used in traditional growth accounting to gauge the importance of investment-specific technological progress have little economic content, unlike the measure obtained from quantitative theory.     

Audit Fees and Deeds of Cross Guarantee: An Empirical Evaluation

Since 1985, directors of Australian corporate groups have had the opportunity to execute a regulatory financing instrument, currently described as a deed of cross guarantee (DXG), between a holding company and one or more subsidiaries. This unique Australian regulatory intervention was advanced and justified on the basis that relieving subsidiaries from financial reporting requirements with associated cross‐guaranteeing debt obligations would reduce the regulatory burden on groups of companies, and subsequently reduce audit and administration costs. Given the claims of regulators' and others in the business community, this paper examines whether, ceteris paribus, the DXG has a significant mitigating effect on audit fee determination. Specifically, the study evaluates whether a particular engagement attribute decreases audit complexity and subsequently audit risk and audit fees. After controlling for size and group structure complexity of the auditee, the study finds that first‐time adopters of a DXG pay less in audit fees relative to non‐DXG groups, but there is lack of evidence to support ongoing audit fee savings from having a DXG in place. On the contrary, results show that a group with an established DXG pays much higher audit fees, which may be a consequence of the DXG introducing added complexity to the audit. The study also contributes to the methodological development of the standard audit fee model, particularly for the Australian context.     

Firm-Specific Determinants of Income Smoothing in Bangladesh: An Empirical Evaluation

The purpose of this chapter is to empirically examine the existence of income smoothing and determinants of smoothing behavior in Bangladesh. Using Eckel's (1981), Abacus (June), 28–40, “comparison of the variance of sales and profit” method, this study finds that a fair number of Bangladeshi firms engage in income smoothing. Particularly, 46 firms out of a sample of 107 firms with available data, engage in at least one type of income-smoothing behavior. Further, a logistic regression result indicates that firms characterized by sponsors having the largest ownership stake among all the equity holders and smaller firms engage more in income smoothing. Also, firms that have high debt to equity ratio engage more in smoothing behavior.     

Development of Accounting Regulatory Framework in China: An Empirical Evaluation

In China, the government has long been involved in directly regulating accounting work. The rule-based accounting regulations have been formulated for different industry and business ownership structure by the central government since the founding of the People’s Republic in 1949. Remarkable changes have, however, taken place in Chinese accounting which have resulted from the wide-ranged economic and accounting reforms in the last two decades. Recently, an accounting regulatory framework based on accounting standards has been introduced, with great efforts to develop a set of practical accounting standards. A survey study was conducted to empirically investigate the prevailing perceptions of the users and providers of business accounting in respect of four major conceptual and practical issues underlying the construction of the accounting regulatory framework in the changing business environment in China. The study results demonstrate that the respondents from various interest groups possessed mixed views. They generally endorsed the current progress in the accounting reforms. On the other hand, the majority of the respondents were supportive of further changes in reshaping accounting regulatory framework to accommodate the growth of market-oriented economy in China.     

Capital Budgeting versus Market Timing: An Evaluation Using Demographics

Using demand shifts induced by demographics, we evaluate capital budgeting and market timing. Capital budgeting implies that industries anticipating positive demand shifts in the near future should issue more equity to finance greater capacity. To the extent that demand shifts in the distant future are not incorporated into equity prices, market timing implies that industries anticipating positive shifts in the distant future should issue less equity due to undervaluation. The evidence supports both theories: new listings and equity issuance respond positively to demand shifts during the next 5 years and negatively to demand shifts further in the future.     

我国金融发展的理论评析

金融发展就是在金融因素有效作用于经济增长前提下的金融部门的发展。从制度的视角来看,金融发展就是金融制度演进的过程,只有与经济增长的要求相适应的金融制度变迁,才能称之为真正意义上的金融发展。我国的金融发展就是一个例子,金融部门快速发展制约经济增长的现实缘于金融制度演进的缓慢。因此,深化我国金融改革的突破口是允许民间资本进入金融产权市场,改造现有金融体系比重建新的金融体系更重要。     

The Mystery of the Vanishing Benefits: An Introduction to Impact Evaluation

This article provides an introduction to the concepts and methodsof impact evaluation. The author provides an intuitive explanationin the context of a concrete application. The article takesthe form of a short story about a fictional character's on-the-jobtraining in evaluation. Ms. Speedy Analyst is an economist inthe Ministry of Finance in the fictional country of Labas. Inthe process of figuring out how to evaluate a human resourceprogram targeted to the poor, Ms. Analyst learns the strengthsand weaknesses of the main methods of ex post impact evaluation.