When does low interconnectivity cause systemic risk?

We analysed a systemic liquidity crisis by using a unique money market data-set in which the coded identity of the counterparties of each trade is known. Contrary to recent findings, we did not observe a positive relationship between interconnectivity and systemic risk. We have concluded that our conflicting findings can be related to the degree of market concentration on the borrowing side of the funding market. High level of concentration in the borrowing side led to lower interconnectivity but higher systemic risk prior to the crisis. We conclude that measures of market heterogeneity should be used to generalize the relationship between systemic risk and interconnectivity.     

Career advancement in large organizations in Europe and the United States: do international assignments add value?

We look at the relationship between the number of assignments, the length of international assignment experience, the type of employer commissioning the international assignment, the individual's career stage at the first assignment, and career advancement: the time that the executives took to be appointed to the CEO position from the start of their career. Our sample of 1001 chief executives, based in 23 countries and affiliated with the 500 largest corporations in Europe and the 500 largest in the United States, allows us to examine important individual- and organization-level contingencies that affect the relationship between international assignment experience and career advancement. We find that international experience slows the executives' ascent to the top, longer assignments and a larger number of assignments being detrimental to their speed of ascent to top corporate positions. Further, international assignments at corporations other than the CEOs' current employer and assignments taken at later stages of executives' careers damage career advancement.     

The persistence in real exchange rate: Evidence from East Asian countries

In this article, we examine the degree of persistence in monthly real exchange rate of six East Asian countries in relation to their two major trading partners, the United States and Japan, to study the validity of PPP for the 1976:01–2009:03 period. To investigate the persistency in real exchange rate series, we use sum of the autoregressive (AR) coefficients and the confidence interval for it using grid-bootstrap procedure recently developed by Hansen (1999). We have two findings: first, we find evidence for high persistency in real exchange rate in terms of the Japanese yen for five countries and for four countries in terms of the US dollar the for the full and pre-crisis sample periods. Second, for the post-crisis period, the presence of low persistency in real exchange rate supports PPP for three countries in terms of the Japanese yen and five countries in terms of the US dollar. These findings indicate that real exchange rate series of five East Asian countries are mean-revert based on their exchange rate policies and East Asian countries can form a currency union.     

The World Bank and Emerging Powers: Beyond the Multipolarity–Multilateralism Conundrum

The discrepancy between the increasingly multipolar world economy of the recent decades and the stubbornly limited representativeness of the organisations mandated with its governance causes much strain in global politics. Some scholars suggest that this chronic mismatch will undermine existing multilateral bodies, while others expect the present architecture to persist. This article contends that the outcomes of this challenge are institution-specific. In settings where significant operational realignments are possible within existing mandates and governance structures, the multipolarity–multilateralism conundrum could be partly mitigated. The argument is based on a thematic analysis of all IBRD-IDA loan commitments between 2002 and 2015 in the World Bank’s seven all-time top borrowers: Argentina, Brazil, China, India, Indonesia, Mexico and Turkey (collectively, the Big Seven). The key finding is that while these emerging countries remain the Bank’s biggest clients, the terms of their engagement have shifted precisely along the lines where they had already differed from the rest of the Bank’s clientele: away from politically onerous governance and institutional reforms, and towards developing physical and market infrastructure while attaining social sustainability. This implicit realignment is facilitated by the Bank’s diverse policy repertoire, which allows considerable inter-regional and intra-regional variation in lending patterns to accommodate member preferences.     

A Kantian Analysis of Pricing and R & D

Review of Industrial Organization - Can cooperation offer an innovative alternative to competition among firms? This design problem is analyzed in the context of Kantian cooperation among firms in...     

Time-varying linkages between tourism receipts and economic growth in a small open economy

The causal link between tourism receipts and GDP has recently become the major focus of some recent studies in tourism economics. Results obtained in these studies about the causal link appear to be sensitive with respect to the countries analyzed, sample period and methodology employed. Considering the sensitivity of the causal link, we use the rolling window and time-varying coefficients estimation methods to analyze the Granger causality based on Vector Error Correction Model (VECM). When applied to Turkey for the 1963–2006 periods, this methodology enables us to overcome differences in the outcome of the tests performed in other studies for tourism receipts and GDP. The findings of this paper are as follows: results from the full sample within the VECM model indicate that there is no Granger causality between the series, while the findings from the time-varying coefficients model based on the state-space model and rolling window technique show that GDP has no predictive power for tourism receipts; however, tourism receipts have a positive–predictive content for GDP following early 1980s.     

Challenges for Corporate Ethics in Marketing Genetic Tests

Public discussions of ethical issues related to the biotechnology industry tend to treat “biotechnology” as a single, undifferentiated technology. Similarly, the pros and cons associated with this entire sector tend to get lumped together, such that individuals and groups often situate themselves as either “pro-” or “anti-” biotechnology as a whole. But different biotechnologies and their particular application context pose very different challenges for ethical corporate decision-making. Even within a single product category, different specialty products can pose strikingly different ethical challenges. In this paper, we focus on the single over-arching category of “genetic testing” and compare tests for disease susceptibility and drug response. We highlight the diversity of ethical challenges – grouped under the broad categories of “truth in advertising” and “protecting intellectual property” – raised by the commercialization and marketing of these technologies. By examining social and technical differences between genetic tests, and the associated corporate ethics challenges posed by their commercialization, our intent is to contribute to the nascent business ethics literature examining issues raised by the development and marketing of genetic tests. Bryn Williams-Jones is Assistant Professor in the Département de médecine sociale et préventive and a member of the Groupé de recherche en bioéthique at the Université de Montréal, Canada. An interdisciplinary scholar, Bryn employs analytic tools from applied ethics, health policy and the social sciences to deconstruct the complexity of new technologies and analyse the embedded ethical, social, and political values. Current research focuses on commercial genetic testing (disease susceptibility, pharmacogenetics), biotechnology and intellectual property rights, and conflicts of interest arising with the commercialization of university research and development of industry partnerships. Vural Ozdemir is Director of the Biomarker and Clinical Pharmacology Unit, VA Long Beach Medical Center at the School of Medicine, University of California, Irvine and Co-Chair (together with Bryn Williams-Jones) for the Ethics and Science Policy Committee of the Pacific Rim Association for Clinical Pharmacogenetics. A clinical pharmacologist, Vural’s scientific research focuses on genetic and environmental determinants of inter-individual and inter-ethnic variations in drug safety and effectiveness. Ongoing socio-ethical analyses examine, for example, the role of Mertonian standards in university knowledge-commons and resolution of conflicts arising from the dual role of academic scientists as both actors and narrators in university-industry relationships.     

The export-output growth nexus in Japan: a bootstrap rolling window approach

The purpose of this article is to examine the export–output nexus in Japan by taking into account the time variation in the causal link with bootstrap Granger non-causality test and rolling estimation. The data used cover the seasonally adjusted real export and real Gross Domestic Product (GDP) for the 1957:1–2009:1 period. Standard Granger causality tests indicate no causality between export and real GDP series. On the contrary, full sample-modified Granger causality tests based on bootstrap, which are applicable irrespective of integration–cointegration properties of the data, indicate a bi-directional causal link between exports and real GDP. Accordingly, export growth should be an important factor behind Japan’s high-economic growth in the last three decades. Using parameter stability tests, we show that these results are not uniform for different sample periods and results vary due to structural changes. Using bootstrap rolling window estimation, we find that there is a positive bi-directional predictive power from the mid 1970s to the late-1980s between the series, while from the late 1990s to 2009 there is a positive predictive power only from export growth to output growth.     

Are real exchanges rate series really persistent?: evidence from three commonwealth of independent states countries

This article sets out to examine the degree of persistence in the real exchange rates of Kazakhstan, Kyrgyzstan and Russia, and tests the validity of Purchasing power parity (PPP) using monthly data covering 1995:01–2013:12 period. The sum of autoregressive (AR) coefficients is used in order to examine persistence of the real exchange rate series and grid-bootstrap method is employed for the confidence intervals. The tests performed suggest two results: (1) Covering the full sample and sub-sample periods, excluding Kyrgyzstan in 1995:01–1998:07 and Russia in 2008:09–2013:12 periods, disregarding the structural breaks in the data generating process, there is high persistency in real exchange rates; (2) there is evidence in support of PPP covering the full sample for every country except for Kyrgyzstan in 1995:01–1998:07 and Russia in 2008:09–2013:12 periods.     

Measuring Takeover Premiums in Cross-Border Mergers and Acquisitions: Insights from Turkey

We investigate whether the merger announcement dates provided in a popular mergers and acquisitions (M&A) database, SDC, serve as accurate event dates for estimating the wealth effects of mergers on target firms located in Turkey. We find that 74 percent of SDC’s merger announcement dates are preceded by merger-related events such as merger rumors, target firms’ search for potential acquirers, and early-stage merger negotiation announcements. Target cumulative abnormal return (CAR) estimates around these early dates are almost twice as large as the CAR estimates around SDC’s merger announcement dates. We argue that our findings have implications for the recently flourishing cross-border M&A literature.