The effects of reputation and relationships on lead banks’ certification roles

We investigate the certification roles of lead bank retention in US syndicated loans with respect to interest rates, then explore how lead banks’ reputation and previous relationships with the borrower alter such certification effects. Our findings support the certification hypothesis. Loan spreads are found to decrease with a higher retention ratio, after controlling for the endogeneity of loan price and retention. The magnitude of certification effect is reduced when the lead bank is a more reputable lender and when there are prior bank–borrower relationships. Lead bank reputation and prior lending relationships can therefore substitute for the need to certify.     

The split capital investment trust saga: Lessons for financial services marketing

The split capital investment trust boom at the end of the 1990s demonstrated that product innovation and financial engineering can lead to the creation of dangerous products whose risks are not understood by investors. It also emphasised the need for careful marketing of investment products. This involves identifying the needs of investors, creating products to meet those needs, promoting and selling those products, and managing client relationships after the sale. Particular issues that should be addressed include the need to educate clients and adequate stress testing of new products.     

银行监管的微观基础和战略监管体系选择

本探讨了银行监管的微观基础，认为在信息不对称以及银行业不完全竞争的作用下，银行业具有内在的不稳定性，需要外部监管力量的支撑来维护稳健经营，但是政府机构监管作为监管垄断力量会引发一系列新的道德危害从而导致监管失灵。中详细分析了各种重要的监管措施带来的正负影响，在此基础上提出监管的战略体系至少应当包括监管、激励结构、市场约束和公司治理。     

Integration and search engine bias

We study the effects of integration between a search engine and a publisher. In a model in which the search engine (i) allocates users across publishers and (ii) competes with publishers to attract advertisers, we find that the search engine is biased against publishers that display many ads – even without integration. Integration can (but need not) lead to own‐content bias. It can also benefit consumers by reducing the nuisance costs due to excessive advertising. Advertisers are more likely to suffer from integration than consumers. On net, the welfare effects of integration are ambiguous.     

Compensation contracts and fire sales

This paper analyzes the impact of remuneration practices on banks’ risk-taking in a model with fire sales externalities. When these externalities are not internalized by a bank's shareholders and executives, borrowing and fire sales are higher than the socially optimal level. Our analysis shows that plain-vanilla equity fails to internalize fire sales externalities. Deferred equity and long-term bonuses unrelated to short-term profits can restore social efficiency. Bail-in bonds can achieve efficiency at a smaller cost since they allow for state-contingent payments. It is not the level but the composition of variable compensation that determines the inefficiency. Excessive regulation may lead to suboptimal levels of risk-taking. Government guarantees reinforce the fire sales externalities and the need for regulation.     

Private and public disclosures and the efficiency of stock prices

In this paper I examine the effects of private and public disclosures on the informational efficiency of stock prices. In addition to making a public announcement such as an earnings announcement, a public firm can make private disclosure to an analyst. If the analyst's relative information advantage is below a threshold level, private disclosure to the analyst leads to more efficient stock price. I demonstrate that the allocation of information across market participants is an important determinant of price efficiency. While accounting regulators often argue the need for equal access to information, the paper shows that there are conditions under which a limited amount of informational inequality may lead to more efficient stock prices.     

You have to lead from everywhere. Interviewed by Scott Berinato

When responding to a complex, fast-moving crisis, leaders must constantly adapt their mental models and create a "unity of effort." argues Allen, a retired U.S. Coast Guard admiral and the national incident commander for the Deepwater Horizon oil spill. That's a much bigger management challenge than approaching the job as a military operation and drawing on unity of command, and it can require nuanced and creative strategies, such as deciding to go "off book" when standard protocol simply won't work. In this edited interview, Allen--who also brought post-Katrina New Orleans back from the brink of anarchy and headed the Coast Guard's response to the September 11 attacks along the eastern seaboard-stresses the need to lead both from headquarters and on the ground. He discusses how the phenomenon of publicly available, real-time information has affected crisis management in recent years, addresses the challenges of managing multiple public and private stakeholders, and shares his thoughts on how to lead when an anxious public is counting on success.     

Scenarios and the art of worldmaking

In this exploratory paper we propose ‘worldmaking’ as a framework for pluralistic, imaginative scenario development. Our points of departure are the need in scenario practice to embrace uncertainty, discomfort and knowledge gaps, and the connected need to capture and make productive fundamental plurality among understandings of the future. To help respond to these needs, we introduce what Nelson Goodman calls worldmaking. It holds that there is no singular, objective world (or “real reality”), and instead that worlds are multiple, constructed through creative processes instead of given, and always in the process of becoming. We then explore how worldmaking can operationalise discordant pluralism in scenario practice by allowing participants to approach not only the future but also the present in a constructivist and pluralistic fashion; and by extending pluralism to ontological domains. Building on this, we investigate how scenario worldmaking could lead to more imaginative scenarios: worldmaking is framed as a fully creative process which gives participants ontological agency, and it helps make contrasts, tensions and complementarities between worlds productive. We go on to propose questions that can be used to operationalize scenario worldmaking, and conclude with the expected potential and limitations the approach, as well as suggestions for practical experimentation.     

公用企业产品公平交易的法经济学分析

市场经济既是法治经济也是道德经济,因而,实现公平交易是企业与其消费者之间的合理状态。然而在我们国家具体的经济运行过程中,由于市场参与主体不同的利益关系（特别是公用企业与其消费者之间的交易）、法制环境的不完善以及公用企业自身的特点,就很可能出现交易的结果与公平性的原则相违背的现象,影响整体的社会效益。本篇文章主要是运用法经济学的分析方法,综合分析公平交易的系统性因素,研究不同主体利益最大化的决策路径,为构建公平交易所需要的法制环境提出有效的建议。     

Transparency in the Procurement of Public Works

The construction contract bonding system is used worldwide to protect the owner of a project against the risk of non-performance by the contractor. There is a close relationship between the construction contract bonding system and transparency in public works, which policy-makers and officials need to be more aware of. There are mainly three systems in use, which the authors have analysed in depth. Each of the three models has a different influence on transparency in public works: the 'high penalty conditional model' is considered the most functional model in improving transparency, the 'low penalty unconditional model' does not contribute very much to improving transparency, while the 'substitute contractor model' can lead to greater opportunities for corruption on the contractor's side.     

Finance theory: A house without windows

In this paper we aim to build on the existing critical finance literature by exploring how finance theory maintains both its momentum and hegemony. More specifically, by using an example at the core of finance theory (namely, portfolio asset allocation) we illustrate how finance keeps itself artificially alive by taking data from the outside world, often ignoring the rich complexities of the context which has given rise to the data, and using these ‘new facts’ to create puzzles which then lead onto more activity to see how the accepted core can or cannot be extended to incorporate the ‘new facts’. Against this process the paper then shows how the more obvious approach of engaging with the various participants can lead to greater insight and understanding. Given this approach, facts are not just anomalies which need to be explained away but part of the environment which help us to understand the various activities of individuals and organisations. The paper concludes by outlining a research agenda which develops a number of streams of research in critical finance and needs to be addressed in an open manner if traditional finance is to move from being closed and increasingly moribund to a subject which captures the vibrancy and dynamism of financial activities/markets across the globe.     

Applying Tax Policy Models in Country Economic Work: Bangladesh, China, and India

Three examples from the World Bank's country economic work showhow models can complement general principles in guiding thedesign of a tax reform package. The Bangladesh model highlightsthe sensitivity of judgments about desirable tax bases to assumptionsabout the labor market and substitutability in production. TheChina model quantifies the losses from recommending a singlerate value added tax when prices are controlled and public capitalis freely provided to state enterprises. The India model showswhat fiscal adjustment is consistent with tariff reductionsundertaken to promote an outward-oriented development strategy.Most of the costs of constructing tax policy models are relatedto the need to establish a consistent data set and to calibratethe model in a way that allows its behavior to be consistentwith what good economic analysis would lead one to expect.     

会计制度的信誉基础

会计是一种制度安排 ,信誉是会计制度安排的基础 ,信誉危机导致会计制度的信誉基础遭受严重的破坏。会计信誉危机既是会计的问题 ,但更主要的是企业信誉问题和社会信任问题 ,因此只有深入到会计系统以外的社会转型和文化制度变迁之中 ,才能寻求全面、合理的解释。重塑会计制度的信誉基础 ,需要会计道德进步、会计法制运作和会计环境改造三者同步进行 ,并通过经济学科与社会科学的真正联盟 ,给重塑会计信誉基础提供正确的理论引导。     

企业社会责任研究

企业社会责任是构建企业与社会和谐关系的基本思想,然而我国企业在履行社会责任方面还存在一些问题,人们对企业社会责任的认识还存在误区,企业没有树立正确的生产经营意识和经营理念,企业在建立企业社会责任体制方面不够健全,政府和企业社会责任划分不清,因此企业要转变观念以提高承担社会责任的意识,政府要加强法制建设,抓紧研究制定企业社会责任的法律法规,强化政策导向,形成企业社会责任的激励机制。     

STRATEGIC HEDGING

This article presents a new approach to financial risk management whose primary objective is to ensure that companies have sufficient internal funds and access to outside capital to carry out their strategic investments. The foundation of this approach is a comprehensive measure of corporate exposure that views the firm as a collection of current cashgenerating assets and future investment opportunities and that attempts to show how changes in fundamental economic variables can threaten the firm's ability to realize its strategic objectives. As such, the measure of exposure reflects the effect of expected changes in economic variables not only on the firm's operating cash flows but also on its future investment requirements.
Because its focuses only on the exposures that need protection when regular sources of funds are exhausted, this strategic hedging approach will generally lead to a more conservative hedging policy. In so doing, it should enable companies to avoid the excessive and costly "micro" hedging of individual transactions—an approach that can easily degenerate into speculation.     

Is performance measurement and management fit for the future?

Performance measurement and management (PMM) is a management and research paradox. On one hand, it provides management with many critical, useful, and needed functions. Yet, there is evidence that it can adversely affect performance. This paper attempts to resolve this paradox by focusing on the issue of “fit”. That is, in today's dynamic and turbulent environment, changes in either the business environment or the business strategy can lead to the need for new or revised measures and metrics. Yet, if these measures and metrics are either not revised or incorrectly revised, then we can encounter situations where what the firm wants to achieve (as communicated by its strategy) and what the firm measures and rewards are not synchronised with each other (i.e., there is a lack of “fit”). This situation can adversely affect the ability of the firm to compete. The issue of fit is explored using a three phase Delphi approach. Initially intended to resolve this first paradox, the Delphi study identified another paradox – one in which the researchers found that in a dynamic environment, firms do revise their strategies, yet, often the PMM system is not changed. To resolve this second paradox, the paper proposes a new framework – one that shows that under certain conditions, the observed metrics “lag” is not only explainable but also desirable. The findings suggest a need to recast the accepted relationship between strategy and PMM system and the output included the Performance Alignment Matrix that had utility for managers.     

Transparency in the Procurement of Public Works

The construction contract bonding system is used worldwide to protect the owner of a project against the risk of non-performance by the contractor. There is a close relationship between the construction contract bonding system and transparency in public works, which policy-makers and officials need to be more aware of. There are mainly three systems in use, which the authors have analysed in depth. Each of the three models has a different influence on transparency in public works: the ‘high penalty conditional model’ is considered the most functional model in improving transparency, the ‘low penalty unconditional model’ does not contribute very much to improving transparency, while the ‘substitute contractor model’ can lead to greater opportunities for corruption on the contractor's side.     

The Empire strikes back. Counterrevolutionary strategies for industry leaders

Industry leaders frequently worry that their companies will fall victim to some revolutionary business model or disruptive technology. But new research shows that it's strategically better for incumbents to counter a revolution than to ignore or fully embrace it. Successful incumbents rely on one or more of five approaches to restrain, modify, or, if necessary, neutralize a revolutionary threat. A company that perceives a revolution in its earliest stages can use containment strategies. By throwing up roadblocks--raising switching costs, perhaps, or launching discrediting PR efforts--an incumbent can often limit the degree to which customers and competitors accept a nascent insurgency. And, sometimes, revolutions die there. If not, early containment buys a company some time to shape the revolution so that it complements, rather than supersedes, the incumbent's strengths. And even if shaping efforts fail, they can give an industry leader more time to work out how to absorb the threat by bringing the new competencies or technologies inside the firm in such a way that they don't destroy its existing strengths and capabilities. When revolutions have progressed too far to slow them down, incumbents must take a more aggressive tack. Neutralizing strategies meet a revolution head-on and terminate it--by, say, temporarily giving away the benefits offered by the challenger for free. Annulment strategies allow the market leader to leapfrog over or sidestep the threat. These five strategic approaches need not be used in isolation, as a detailed case study of the way Anheuser-Busch countered the craft-beer revolution dramatically demonstrates. Sensible industry leaders do not lead revolutions; they know they may not survive the attempt. Instead, they prefer to lead counterrevolutions.     

金融全球化进程中金融风险的防范与化解(英文)

在全球金融化的进程中,金融活动在全球范围内得到扩展和深化,同时每个金融主体也面临着不同程度的风险,很多因素都可能加强金融风险,其中包括人为因素和系统因素。而包括中国在内的发展中国家在抵御可能的风险方面能力较弱,所以我们更加需要采取正确并积极的方式来抵御金融风险。     

The secret to a health benefits self-service model: a more informed consumer

Sageo is the first full-service e-business to deliver health, dental, vision and welfare benefits via the Internet. The author describes the health care system's problems that have led to the need for participant-driven, self-service systems; describes Sageo's genesis and inaugural online enrollment; and explains how services like those offered by Sageo allow employers to "match, pace and lead" to a more informed health care consumer.