Problems in the creation of an optimal currency zone in the Commonwealth of Independent States

The paper evaluates the features of the Commonwealth of Independent States as a regional economic union of states on the territory of the former Soviet Union. It examines the most noticeable conceptual approaches to the definition of strategy, the directions of CIS development, and the monetary and credit mechanisms of interactions among member states, as well as the feasibility of CIS transformation into an efficient economic union of states.     

Are Investment Banks Special Too? Evidence on Relationship‐Specific Capital in Investment Bank Services

The question of whether optimal provision of these services comes mainly from established relationships between banks and client firms or can result from arms'‐length market transactions has been the topic of considerable recent debate. This discussion has paralleled the debate in the commercial banking literature on the “specialness” of banks and whether lending can and should be relational or purely transactional. Whether the provision of investment bank services is relationship‐based or transactional is especially relevant now thanks to recent trends that have blurred the distinction between commercial and investment banks, and changed the competitive landscape for investment bank services. In their study summarized in this article, the authors examine whether investment bank‐client relationships create valuable relationship‐specific capital using stock market evidence from the period surrounding the collapse of Lehman Brothers. Specifically, they studied the effect of the Lehman collapse on companies that used Lehman for (1) underwriting equity offerings, (2) underwriting debt offerings, (3) advice on mergers and acquisitions, (4) analyst research services, and (5) market‐making services. The study addressed two specific questions. First, which investment bank services, if any, are associated with the creation of relationship‐specific capital; and second, what are the value drivers of this relationship capital? The authors report finding that companies that used Lehman as lead underwriter for public equity offerings experienced significantly negative abnormal stock returns in the days surrounding Lehman's bankruptcy announcement. By contrast, they find no significant reaction to the announcement for Lehman's debt underwriting clients or any of the other client categories they examine. While most of these investment bank services have at least the potential to create relationship‐specific capital, the authors' findings suggest that except for equity underwriting, all the other investment bank services appear to be transactional rather than relationship‐based, at least in the average case. Moreover, the authors report significant differences even among different groups of Lehman's equity underwriting clients. An equity underwriting relationship with Lehman appears to have been especially valuable for smaller, younger, and more financially constrained firms—those firms which presumably had a high degree of dependence on Lehman to access the capital market.     

Switching to the policy mode: Incentives by the OECD jobs study to change our mindset

I would like to thank Simon Kuipers and Joan Muysken for their critical comments on an earlier draft of the article.     

Political uncertainty and investments by private and state-owned enterprises

We study corporate investments around national elections in India. Investment rates drop by a nonsignificant 2.2% for state-owned enterprises (SOEs) in election years. The decrease is significantly larger for private firms, which record an investment drop of 7.4%. The decrease in investment for private firms is likely attributable to political uncertainty. SOEs balance political uncertainty with the desire to woo voters who want government investments. Investments in election years are perceived positively for both private firms and for SOEs. Increased investment by SOEs and reduction in investment by private firms during election years are associated with improved investment efficiency.     

The executive suite: Are women perceived as ready for the managerial climb?

In a developing profession, emphasis is placed on two key ingredients for a successful climb to the executive suite — namely, interpersonal skills and an appropriate personality structure than can cope with forms of stress and uncertainty. The data presented in this study were collected from one of the major accounting firms and offers insights into men and women on the upward climb within the accounting profession. Analysis of this data shows that although appropriate personality characteristics are predicated on a male managerial model, women and men perceive themselves similarly with respect to these characteristics. However, others' perceptions of women, male accountants as well as clients, seemed more skeptical of women's ability to succeed. Furthermore, there are indications that women and men have different job assignments along their career paths. Our data collected in the latter half of the seventies tend to corroborate many of the findings in the first half — in general women are not perceived as ready for the managerial climb.