Do foreign institutional investors destabilize China’s A-share markets?

This paper investigates the effect of foreign institutional investors on the stability of Chinese stock markets. Previous literature views this investor group as destabilizing feedback traders. We use the abolition of ownership restrictions on A shares as a natural experiment. There is strong evidence that foreign institutions have a stabilizing effect on Chinese stock markets and contribute to market efficiency. This finding is robust across exchanges, sample periods, size quintiles and alternative model specifications. By contrast, domestic investors appear to engage in positive feedback trading. Our results have important implications for market regulation.     

A Spatial Autocorrelation Approach for Examining the Effects of Urban Greenspace on Residential Property Values

This paper presents spatially explicit analyses of the greenspace contribution to residential property values in a hedonic model. The paper utilizes data from the housing market near downtown Los Angeles. We first used a standard hedonic model to estimate greenspace effects. Because the residuals were spatially autocorrelated, we implemented a spatial lag model as indicated by specification tests. Our results show that neighborhood greenspace at the immediate vicinity of houses has a significant impact on house prices even after controlling for spatial autocorrelation. The different estimation results from non-spatial and spatial models provide useful bounds for the greenspace effect. Greening of inner city areas may provide a valuable policy instrument for elevating depressed housing markets in those areas.     

Issues affecting the development of an international accounting standard on financial instruments

While the global convergence of accounting standards is making steady progress, certain issues stand out as challenges. A major area where an international accounting standard has not gained universal acceptance is that of financial instruments. The European Union's refusal to adopt all of International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, highlights that fact. The International Accounting Standards Board continues to address financial instruments in efforts to remedy this situation. Thus, it is important to better understand issues affecting the development of an international financial instruments accounting standard. The purpose of this study is to find out what issues are important to respondents in their comment letters regarding the Financial Instruments Discussion Paper (FIDP), and whether stakeholder groups differ in positions and the reasons given to support their views. The FIDP represented a major step toward approval of IAS 39 and proposed fair value accounting for all financial instruments. Over 1500 pages of comment letters were generated by the 168 respondents, who represented over 20 countries and several different stakeholder groups. While most respondents disagreed with the FIDP, differences in support and the specific issues used to support those positions were found by stakeholder interest group (accounting profession, regulators, standard-setters, financial analysts, and preparers) and by stakeholder nationality.     

Inter-market competition for NYSE-listed securities under decimals

Blume and Goldstein (J Finance 52:221–244, 1997) suggest that quote competition between trading venues may diminish following tick size reductions. We test this suggestion by studying the competitive landscape in the NYSE-listed stocks before and after decimalization. We find that NBBO (National Best Bid and Offer) participation by non-NYSE venues declines following decimalization consistent with the prediction. At the same time, the importance of quote competitiveness in attracting order flow increases. In addition, although not as active in determining and maintaining the best quotes under decimals, non-NYSE venues become more active in price discovery. Finally, decimalization leads to lower trading costs and to smaller differences in trading costs across trading venues.     

Efficiency of Microfinance Institutions: A Data Envelopment Analysis

This study examines the cost efficiency of 39 microfinance institutions across Africa, Asia and the Latin America using non-parametric data envelopment analysis. Our findings show non-governmental microfinance institutions particularly; under production approach, are the most efficient and this result is consistent with their fulfillment of dual objectives: alleviating poverty and simultaneously achieving financial sustainability. However, bank-microfinance institutions also outperform in the measure of efficiency under intermediation approach. This result reflects that banks are the financial intermediaries and have access to local capital market. It may be possible that bank-microfinance institutions may outperform the non-governmental microfinance institutions in the long run.     

Pro‐Social or Pro‐Management? A Critique of the Conception of Employee Voice as a Pro‐Social Behaviour within Organizational Behaviour

For many years, the employment relations (ER) literature took the perspective that employee voice via trade unions could channel discontent and reduce exit, thereby improving productivity. In organizational behaviour (OB) research voice has also emerged as an important concept, and a focus of this research has been to understand the antecedents of the decision of employees to engage or not engage in voice. In OB research, however, voice is not viewed as it is in ER as a mechanism to provide collective representation of employee interests. Rather, it is seen as an expression of the desire and choice of individual workers to communicate information and ideas to management for the benefit of the organization. This article offers a critique of the OB conception of voice, and in particular highlights the limitations of its view of voice as a pro‐social behaviour. We argue that the OB conception of voice is at best partial because its definition of voice as an activity that benefits the organization leaves no room for considering voice as a means of challenging management, or indeed simply as being a vehicle for employee self‐determination.     

BEYOND THE HYPE: INTELLECTUAL PROPERTY AND THE KNOWLEDGE SOCIETY/KNOWLEDGE ECONOMY

Abstract.  This paper explores the debates surrounding whether or not we have now moved into a new knowledge economy and/or knowledge society and if so whether this shift is as significant and as far reaching as the industrial revolution. In this possible transformation the place of information communications technologies has been crucial. Debate has occurred across both economics and sociology with differing emphases as is shown in the ranges of definitions that we review in the paper. One consistent factor is the lack of clarity and consistency between them both within and across the disciplines. In order to explore the issues that the debates raises in a more grounded way, the paper explores them in relation to intellectual property (IP) and the intellectual commons in the process of innovation, growth and economic development. The paper is developed through an analysis first of the industrial revolution and the role within this of uncertainty, technologies, complementarities and elective affinities and the way IP was protected and controlled through patents, secrecy, being first to the market and copyright. The second part of the paper examines definitions of the knowledge economy and society and the role within these of information communication technologies in order to explore whether the ways that IP is protected and controlled have changed. In the debate about the 'knowledge economy and society' the role of innovation via human capital with a greater reliance on intellectual capabilities has been emphasized. The role of IP thus remains central but is now challenged by the rise of new forms of communication, which make its protection harder and move much of the concern with respect to regulation to a global rather than national and local level.     

The Role of Debt Purchases in Takeovers: A Tale of Two Retailers

In this paper, we examine acquisitions of two financially distressed retailers—Federated's takeover of Macy's, and Zell Chilmark's takeover of Carter Hawley Hale. In both cases the raider purchased some of the target's outstanding debt to launch its takeover attempt. These debt purchases appear to have been facilitated by two salient factors—the raider's expertise in dealing with distressed firm restructuring and the ability of the raider to acquire a large blockholding of debt. Our analysis indicates that, when these factors are present, it is optimal for a raider to initiate a takeover of a distressed firm through purchasing a block of the firm's debt. Target bondholder reaction will be favorable whereas shareholder reaction may be either favorable or unfavorable.     

Observable Contracts as Commitments: Interdependent Contracts and Moral Hazard

A large literature examines the use of observable and unrenegotiable agency contracts as commitments. These analyses generally impose an ad hoc restriction that contracts cannot be contingent on one another. I relax this restriction and obtain a folk theorem. Unlike earlier folk theorems in this area, the present result applies to agency relationships that have hidden-action problems. Using an example, I also demonstrate that there are settings in which interdependent contracts support a strictly larger set of equilibrium outcomes than do independent contracts. The result highlights the critical need for careful thought about restrictions placed on the set of feasible contracts.