Does governing law affect bond spreads?

Controlling for bond and issuer characteristics, bond spreads are expected to be equal across different legal jurisdictions, and differences are expected to disappear through arbitrage. However, an analysis of 490 U.S. dollar–denominated bonds issued by 53 emerging market sovereigns during 1990–2015 reveals that after the financial crisis of 2008, launch spreads of sovereign bonds issued under U.K. law have been higher than those issued under U.S. law, by 130 basis points for BB+ bonds and 175 basis points for B− bonds. This effect was not significant for investment grade bonds. On average, bonds issued under U.K. law had weaker ratings and shorter tenors post-crisis. The post-crisis impact of governing law on sovereign bond spreads is not explained by collective action clauses, or first-time bond issuances. Instead, the difference seems to be related to the perception that U.S. law offers stronger investor protection, and that the investor base for bonds issued under U.S. law is larger than that for bonds issued under U.K. law. The difference in spreads persists in the secondary market even after 180 days, perhaps because of the lack of liquidity, as investors tend to buy and hold these more attractive bonds on a longer-term basis.     

Revisiting the “passée”: history rewriting in the neo-burlesque community

Neo-burlesque, or the “burlesque revival,” is a movement that emerged in the 1990s, with retro-inclined consumers revisiting old-fashioned striptease performances informed by the burlesque satirical tradition. Based on an 18-month ethnographic immersion in North American neo-burlesque communities, our initial research sought to understand how this movement acts as a forum through which forms of female representations are retrospectively enacted and revisited. While providing for empirical evidences that a feeling of incongruity can be experienced by members of retro communities such as that of neo-burlesque – particularly with regards to gender ideals, including body and sexual identity – this paper argues that certain types of neo-burlesque practices disrupt the nostalgic or contemporary logic of idealisation and, as such, can reinvest non-idealised identities, bodies with new meanings and legitimacy in the present.     

Financial sector development and access to finance. Does size say it all?

This paper analyzes what features of financial systems can strengthen the linkages between banks and economic development. We investigate whether a set of banking and capital market characteristics can improve the ability of banks to provide increased credit flows to the private sector, while simultaneously improving financial inclusion for the poor. We analyze the determinants of both macro-level lending conditions and micro-level access to finance using a set of Panel Vector Error Correction Models and GMM estimations in a panel of 138 countries for the 2002–2009 time periods. Results converge to suggest that rather than focusing solely on banking sector size, financial policy should seek to foster inter banks competition, develop appropriate macro-prudential safeguards, promote capital market development. In addition, improved access to finance requires adequate civil rights and support to entrepreneurship.     

What determines the level of informal venture finance investment? Market clearing forces and gender effects

We undertake the first research to move analysis beyond estimating the propensity for a person to become an informal investor and onto the core concern which is the total volume of venture finance. We find that a 1 % increase in entrepreneurial activity increases the number of informal investors by 1.7 %. However, the average invested amount declines by 0.8 %, leading to a net positive total increase of about 0.9 %. This result indicates that, to a considerable extent, demand for informal investment creates its own supply. As a result, the research finds that market forces help solve finance constraints for new ventures and hence lessen the need for public policy intervention. This effect is stronger for males than females.     

Effect of financial development on international trade in Africa: Does measure of finance matter?

Although improving international trade on the back of financial sector development is one of the preoccupations of countries in Africa, empirical literature on financial development-trade nexus has not been rigorous in examining how finance shapes trade. In this study, we examine the effect of financial development on international trade in Africa relying on data for 46 countries over the period 1980–2015. Results from our system generalized method of moments reveal differential effects of finance on trade. In particular, we notice that, private credit does not promote trade while domestic credit positively affects trade. These effects are robust to measures of trade. Thus, improving the level of private (domestic) credit dampens (amplifies) exports and trade openness. However, we also find a U-shaped relationship between private credit and trade measures suggesting that financial sector development may be detrimental (helpful) to trade for economies with low (high) level of private credit.     

Does Religion Affect the Materialism of Consumers? An Empirical Investigation of Buddhist Ethics and the Resistance of the Self

This paper investigates the effects of Buddhist ethics on consumers’ materialism, that is, the propensity to attach a fundamental role to possessions. The literature shows that religion and religiosity influence various attitudes and behaviors of consumers, including their ethical beliefs and ethical decisions. However, most studies focus on general religiosity rather than on the specific doctrinal ethical tenets of religions. The current research focuses on Buddhism and argues that it can tame materialism directly, similar to other religions, and through the specific Buddhist ethical doctrines of the Four Immeasurables: compassion, loving kindness, empathetic joy, and equanimity. The empirical results show the following: (1) Buddhism reduces materialism directly and through some of the Four Immeasurables, and (2) despite the doctrine of non-existence of the self, positive emotions toward the self are still present, and the self absorbs the effects of Buddhist ethics on materialism. The latter finding suggests a “resistance of the self” that is coherent with the idea of a consumer who leverages the self to go beyond it.     

Does and How Does Globalisation Matter at the Industry Level?

In this paper we develop a concept of globalisation at the micro level defined as the exposure of a productivity follower industry in one country to the productivity leader in another country. Globalisation is measured by the intensity of contacts through trade and foreign direct investment. In a simple model and empirically we show that the exposure of a productivity follower to competition with the leader is highly correlated with the productivity gap of this industry. Competition restricted to one region such as Europe, or North America, or the Far East, is not sufficient to achieve highest productivity levels. Moreover, it turns out that foreign direct investment (FDI) has a weight in the globalisation index at least equal to trade. FDI can contribute directly to higher levels of domestic productivity by transferring the best production practices, and put pressure on other domestic producers to improve. The impact of trade on globalisation can be weakened by tariffs and non‐tariffs.     

Technology and intermediation: do banks pass the gains to their customers?

A key function of the banking system is to facilitate intermediation between borrowers and lenders. In this paper we single out for attention the money transmission function of banks to test whether intermediation costs have been reduced by technology and passed on to consumers. Using data for the commercial banking sector in Ireland over the period January 1986 to August 1996, we find that the gains from technology in the provision of banking services, provided they exist, have not been passed on to the bank customers in the form of a lower bank interest rate spread.     

Does securities regulation constrain small business finance? An empirical analysis

In November 2001, the Canadian province of Ontario amended the private placement regulations considerably to facilitate access to equity financing by small and medium sized enterprises (SMEs). To determine the extent to which securities regulation is an effective constraint on financing of growth corporations, we analyze issue activity before and after this change took effect. We note an increase in the number of issues, but only a slight increase in the total amounts raised on the private market following the reform. The average size of the issues has thus decreased. Some of the observed changes can be traced to concurrent events, namely the burst of the technology bubble and the strong increase in the prices of natural resources, which represent a major sector in Canada. When we control for various factors that influence issue activity, we observe a statistically significant effect only on the number of issues by closed corporations, which seems to originate from the non-resource companies. These results do not rule out the conclusion that the reform eased the issue of small amounts of money by private companies. However, our results do not confirm the argument that securities regulation is a major constraint to small business finance.

Foreign direct investment and entrepreneurship: Does the role of institutions matter?

Development economics, international business, and entrepreneurship literature suggest that foreign direct investment (FDI) has significant positive spillover effects for entrepreneurial activities of host economies. However, the findings of past research are mixed, and they do not always confirm this suggestion. We argue that the reason for conflicting findings may be because of an incomplete understanding of the factors that influence the FDI-entrepreneurship nexus in different contexts. Previous studies have carried out only limited exploration of the contingencies in the FDI and domestic entrepreneurship relationship that may depend on the host country’s institutional capacity. We argue that not all countries can reap the rewards from FDI equally. Rather, we hypothesize that countries need to have a sufficient degree of institutional capacity relevant to specific conditions and appropriate threshold levels to successfully capture the positive spillover effects of FDI on domestic entrepreneurship. Utilizing panel data from 2006 to 2016 for 97 emerging markets, developing and developed countries (at different income levels), and a System Generalized Method of Moments (SGMM) estimator that controls for instrument proliferation in dealing with endogeneity problems, we test this hypothesis. We find that FDI has a negative (crowding-out) effect on domestic entrepreneurship at below-threshold levels of institutional capacity, and a positive (crowding-in) effect at above-threshold levels of institutional capacity. The crowding-out effect diminishes as the institutional capacity changes or improves to meet mutating economic environment conditions. Our findings are robust across a wide range of aggregate and disaggregate measures of different types of institutions and alternative empirical strategies.     

Ten years EMU — Reality test for the OCA endogeneity hypothesis,economic divergences and future challenges

At the start of European Monetary Union in 1999 the pessimists argued that it was too early for such a step and that EMU would aggravate economic divergences between the members, while the optimists believed that EMU itself would generate the integrative forces necessary to move towards the achievement of an optimum currency area. Ten years on, which of them prove to be right?     

Ethnomethodology and the production of history: studying ‘history-in-action’

According to Lynch, in his article Ethnomethodology and History, ethnomethodology offers a rich and valuable resource for studying the in situ production of history. In this article, we seek to lay out a research agenda for a ‘new business history’ that uses ethnomethodology to study ‘history-in-action’. Our aim is to show how an ethnomethodological history can be used to study the practical work of those tasked with ‘making history’. We discuss the value of ethnomethodology for core business history methods, including the production and use of historical archives and written records, the treatment of witness memories, (auto)-biographies and testimonies, and the production of official versions of past events from diverse historical sources of evidence. We conclude by outlining the potential of ethnomethodology as a distinct paradigm of enquiry, which marks it out from conventional social scientific approaches to the relationship between empirical evidence and theory-building, by discussing: (1) the value of studying the practical reasoning procedures used for generating and interpreting historical evidence; and (2) the value of opening up new forms of reflective practice for practitioners within the field.     

Does the WTO Increase Trade and Cause Convergence?

We study whether proximity to the nearest tax haven affects FDI and the number of American affiliates in a tax haven. Our results show that distance to the nearest tax haven is positively related to FDI inflows and the number of American affiliates in tax havens. These findings suggest that there is harmful competition between tax havens. We also find evidence of positive spillovers: the number of American affiliates in a tax haven is positively related to the number of affiliates in its closest neighboring tax haven. This suggests the presence of agglomeration benefits given there is an affiliate in a nearby tax haven.     

Questioning ‘law and finance’: US stock market development, 1930–70

An important tenet of a burgeoning ‘law and finance’ literature is that stock market development is contingent upon corporate law offering ample protection to shareholders. This paper addresses this claim, using as its departure point developments occurring in the United States between 1930 and 1970. It shows that, contrary to what the law and finance literature would predict, during this period and throughout the twentieth century generally the US lacked corporate law that provided extensive protection to shareholders. It also points out that while federal securities legislation introduced in the mid-1930s bolstered investor protection, this reform effort did not energise the stock market in the manner implied by law and finance analysis.     

Does the Type of Family Control Affect the Relationship Between Ownership Structure and Firm Value?

Our objective is to disentangle which family business characteristics enable family ownership to be an effective corporate governance mechanism. To this aim, we investigate whether the relationship between ownership concentration and firm value is moderated by the type of family influence. This study shows that family control positively affects performance, primarily when family members serve on the board and when the founder is still influential. Our findings hold when we control for the general blockholder effect and they are robust to a battery of tests. We conclude that the impact of ownership concentration on firm value differs across family firms.     

Does Gibrat's law hold for retailing? Evidence from Sweden

Gibrat's Law predicts that firm growth is a purely random effect and therefore should be independent of firm size. The purpose of this paper is to test Gibrat's law within the retail industry, using a novel data-set comprising all surviving Swedish limited liability companies active at some point between 1998 and 2004. Very few studies have previously investigated whether Gibrat's Law seems to hold for retailing, and they are based on highly aggregated data. Our results indicate that Gibrat's Law can be rejected for a large majority of five-digit retail industries in Sweden, since small retail firms tend to grow faster than large ones.