Transformation of China's sovereign wealth fund since the 2008‐2009 global crisis

China Investment Corporation (CIC) transformed its initial investment strategy of focusing mainly on the US financial sector during 2007‐2008 into a new strategy of diversified investments across geography and sectors since 2009. Massive financial losses and domestic political backlash during the global financial crisis of 2008 gave impetus to CIC's rethinking of strategy. In the midst of the crisis, CIC engineered a capacity‐building and reorganization exercise to reposition itself for a new strategy that has since allowed for more diversification of investments. A more receptive global investment climate for sovereign wealth funds has also aided CIC's efforts to present itself as a responsible global investor and facilitated its investments. Postcrisis, CIC's new strategy of diversification is characterized by continued investments in the financial sector, but with new investments increasingly directed to real sectors of energy, natural resources, and real estate in both developed and emerging economies. Notwithstanding a global recovery that is fraught with uncertainties, CIC's judicious timing in making diversified investments, and its attention to reducing risks and enhancing returns, have been rewarded by an impressive turnaround in performance since 2009. Going forward, the success and sustainability of the new strategy will be contingent on how well CIC can navigate domestic bureaucratic rivalry and the shifting climate of the international investment environment in the medium to long term. Ultimately, CIC's shareholder, the government of the People's Republic of China (PRC), holds the key to its future direction and goals. © 2012 Wiley Periodicals, Inc.     

金融危机下主权财富基金投资的风险控制与策略

占有总额约2万亿美元的资产,主权财富基金是近年来最受瞩目的国际投资者.此次美国次贷危机引起全球金融市场剧烈波动,且已由虚拟经济向实体经济蔓延,而以长期投资为主的主权财富基金被认为在一定程度上可对全球动荡的经济起到稳定器的作用,因此,对金融危机下主权财富基金的投资策略的研究具有重大的意义.     

One size doesn’t fit all: How institutional complexity within the state shapes firms’ environmental innovation

This study investigated how firms respond to conflicting demands within the state. Using Chinese listed firms data, we found that firms linked with central government relate positively to environmental innovation, while firms located in provinces with gross domestic product (GDP) priority exhibited a negative influence on environmental innovation. Beyond the independent roles of central and local government expectations, we found that central and local government demands work interdependently to negatively affect firms’ environmental innovation, such that firms located in GDP priority regions lower the positive impact of the central government on environmental innovation. The present study added to the existing literature by unpacking government roles into two competing sets of expectations, independently and interdependently.     

Family firms’ identity communication and consumers’ product involvement impact on consumer response

The purpose of this study is to determine whether the image transfer theory and the elaboration likelihood model can provide a theoretical framework capable of assessing the influence of consumers’ product involvement and family firms’ identity communication through websites on consumer responses. This research conducted an experiment using an eye‐tracking technique measuring attention to family and nonfamily corporate websites. The procedure involved 120 participants. Consistent with the image transfer theory, family firms’ identity through websites positively impacts attitude toward the website and intention to buy. Additionally, the attitude toward the website affects the relationship between family firms’ identity through websites and the intention to buy. In line with the elaboration likelihood model, consumers’ product involvement negatively impacts the relationship between family firms’ identity through websites and intention to buy.     

The effect of training on Italian firms’ productivity: microeconomic and macroeconomic perspectives

In this article, I explore the effect of training on the productivity of a sample of Italian firms and the impact of training on EU economic growth. Specifically, retrieving data from a survey performed by the Italian Institute for the Development of Vocational Training in 2009, I find that employer‐sponsored training displays a positive and significant effect on the main corporate performance indexes. However, in comparison with companion longitudinal evidence, the magnitude of this impact appears quite narrow. Untangling the determinants of training provision at the firm level and exploring the consequences of training on growth rates by means of the EU's Continuous Vocational Training Survey 4 records, I show that this finding is the outcome of microeconomic and macroeconomic size effects that influence, respectively, the identification of the training impact on corporate productivity and the aggregate performance of the whole economy.     

Beyond clusters: How regional geographic signature affects firm value and risk

Existing studies examining how geography affects firm outcomes primarily consider how clusters affect performance. We examine how regional geographic signature—industry clusters, regional economic diversity, region size, and regional innovativeness—affects firm value and systematic and unsystematic risk using a sample of publicly traded American bank holding companies. After controlling for endogeneity of clusters, we find that locating in large and innovative regions enhances firm value, while locating in clusters and diversifying into many regions reduces value. Clusters reduce systematic risk and increase unsystematic risk, while economic diversity and innovativeness increase systematic risk. Thus, geographic locales exert multifaceted influences on value and risk, and we need to consider more than industry clusters and geographic diversification when considering geographic influence. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.     

Unequal effects of elders’ health problems on wealth depletion across race and ethnicity

We investigate the impact of health on wealth depletion of African American, Hispanic, and non‐Hispanic white elders. Using the data from 4,464 elderly households that participated in both the 1993 Asset and Health Dynamics of the Oldest Old and the 1998 Health and Retirement Study, we find that health problems contribute to wealth depletion differently across elders in different racial and ethnic groups. We draw policy implications from the findings regarding ways to help consumers protect their financial security from health shocks in later life.     

Monetary Policy,Taylor’s Rule and Instability

We analyse the dynamic behaviour of an economy where the central bank (CB) sets interest rates according to a Taylor‐type policy rule. A simple model for a closed and instability‐prone economy is constructed and subjected to formal dynamical analysis and numerical simulation. It is shown that a requirement for local stability is that the two response coefficients in the policy rule be positive. Similarly, it is shown that raising the response coefficient of the output gap increases the likeliness of the economy being stable, whereas raising the response coefficient of the inflation gap has an uncertain and probably negligible effect on local stability. Self‐sustained oscillations may arise for certain parameter values. Policy mistakes in the estimation of the long‐run equilibrium real interest rate or potential real GDP may prevent the CB from achieving its inflation target. A suggestion for enhancing the stabilization capacity of Taylor‐type policy rules in the context of the model presented is made.     

China’s Macroeconomic Imbalances: Causes and Consequences

In recent years, China has experienced two forms of extreme macroeconomic imbalance: an expenditure imbalance in the sense of very high investment and very low consumption, giving rise to rapid capital accumulation; and an imbalance between expenditure and production, producing external imbalance, i.e. a huge surplus on the current account of the balance of payments. Both imbalances imply a low rate of time discount by both government and society: consumption in the present is forgone in favour of consumption in the future. The paper examines how these imbalances came about and goes on to consider whether they can be sustained and how they might be redressed. There is no evidence that the rapid capital accumulation has reduced the rate of profit on capital and thus the incentive to invest. However, persistent external imbalance poses a threat to investment if it generates excess liquidity and asset bubbles. The current account surplus rose remarkably in the years 2004–07. This was associated with exogenous increases in competiveness and in saving, both attributable to the economic reform policies. On current policies, the surplus is likely to rise again once the world economy recovers from its recession. This poses three sorts of problems, each of which is examined in turn: difficulties for macroeconomic stabilisation policies; risk of capital loss on the foreign exchange holdings; and the threat of retaliation by China’s trading partners. A combination of internal and external policies will be required to redress the imbalance.     

Financial Liberalisation and Growth in China’s Economic Reform

This paper summarises China’s financial liberalisation experience and examines the contributions of financial resources on economic growth during the post‐reform period. Financial liberalisation has resulted in the reallocation of the four sources of total investment in fixed assets: state budget appropriation, national bank loans, self‐raised funds, and foreign investment. We find that the growth of GDP and industrial production are positively related to the growth of self‐raised funds and foreign investment. We conclude that the use of foreign investment and funds raised by the enterprises themselves are more efficient than the government’s appropriation and provision of bank loans.     

What’s in a Score? Differences in Consumers’ Credit Knowledge Using OLS and Quantile Regressions

Credit literacy depends, in part, on understanding credit reports and scores. The U.S. Government Accountability Office conducted a study in 2004 to assess consumers’ knowledge of credit reports, credit scores, and the dispute resolution process. This study uses the Government Accountability Office data and estimates a series of ordinary least squares and quantile regressions to identify specific subgroups of the population that could benefit from more targeted consumer policies and financial education. The findings from this research have important implications for consumer educators, financial professionals, and policy makers, especially with respect to national strategies designed to improve consumers’ financial well‐being.     

Australian migrants’ social cultural adaptation and consumption behaviour towards food and alcohol

Australia is one of the most successful multicultural countries in the world due to successive waves of migration from Europe and recently Asia. Nonetheless, new migrants coming to Australia are not always able to adapt to Australian culture due to language and cultural barriers. Hence, the purpose of this study is to segment migrants based on their cultural adaptation and subsequently to examine similarities and differences between those segments in regards to their health‐related behaviour (i.e., alcohol and food consumption). A cross‐sectional study of migrants in Australia (N = 408) suggests that migrants from Asia have the greatest difficulty in adapting to the local culture due to language barriers. This study will assist public policy makers and social marketers in creating effective campaigns and interventions to reduce excessive alcohol consumption and obesity among migrants.     

Cost share‐induced technological change and Kaldor’s stylized facts

This paper presents a theory of induced technological change in which firms pursue a random, local, and bounded search for productivity‐enhancing innovations. Firms implement profitable innovations at fixed prices, which then spread through the economy. After diffusion, all firms adjust prices and wages. The model is consistent with a variety of price‐setting behaviors, which determine equilibrium positions characterized by constant cost shares and productivity growth rates. A fixed mark‐up can yield Marx‐biased technological change. Target‐return pricing yields Harrod‐neutral technological change with a fixed wage share as a stable equilibrium, consistent with Kaldor's stylized facts, while allowing for deviations from equilibrium, as observed in the longer historical record.     

‘It’s the identification,stupid’: profiling senior public service managers for training and development

A review of practices of senior management development across the upper echelons of the public services of major jurisdictions shows that while the need to develop leaders is universally recognised by governments, there are still considerable gaps in the development function. One of the key gaps the article argues that is central to the training and development function is that of identification and targeting of individuals. A profiling protocol is presented that is argued could be an appropriate tool for governments to consider as they seek to link the desired competencies with the career aspirations of their public service senior managers.     

High‐Growth Women’s Entrepreneurship: Fueling Social and Economic Development

High‐growth firms, often referred to as “gazelles,” are equated with entrepreneurial success and celebrated as the key to growing economies, and women’s entrepreneurship is a vehicle of economic and social development. This special issue publishes papers that address the general lack of research on high‐growth women’s entrepreneurship. In this introduction paper, we offer an adapted framework for the factors driving high growth across multiple levels: individual (entrepreneur and entrepreneurial team characteristics), venture (strategy, organizational structures, and systems), resources, location, and environment. We also introduce the papers in this special issue and present an overview of the contributions to this issue.     

Economic Diplomacy and International Trade: ASEAN’s Quest to Value‐Claim

Utilising economic diplomacy theory, this study specifies a statistical model to reveal ASEAN members’ capacity to negotiate better international trade outcomes. Examining imports into ASEAN members from 134 nations between 1980 and 2001, we find that ASEAN’s diplomats were able to pursue more ‘value‐claiming’ in economic diplomacy than expected. While our results support the commonly accepted view in economic diplomacy that smaller nations are pressured to accept trade outcomes desired by larger nations, we also find support for a new perspective: smaller nations obtain more favourable trade outcomes, as members of a regional trade bloc, which cannot be achieved as individual nations. We find that ASEAN’s conversion to a fully fledged regional trade agreement in 1992 significantly enhanced this capacity. This study adds a different perspective to the substantial literature examining cases in trade and economic diplomacy.