International portfolio diversification: a synthesis and an update

This paper provides a synthesis of the existing literature on international portfolio diversification and presents some new results on the subject. We address the question of whether international portfolio diversification is always a reasonable method of reducing the risk of an investment portfolio without negatively affecting its return expectations. Unfortunately, there is still not a simple answer to this question. When ex-post data is examined, potential benefits of international diversification can certainly be detected. However, we also argue that it might be difficult for investors to select an optimal investment strategy ex-ante, when the correlation structure among the international equity is unstable over time. While such findings do not completely rule out the potential benefits of international diversification, they certainly make them more difficult to realize in practice.     

Exchange Rate Exposure at the Firm and Industry Level

Previous work on the exposure of firms to exchange rate risk has primarily focused on U.S. firms and, surprisingly, found stock returns were not significantly affected by exchange‐rate fluctuations. The equity market premium for exposure to currency risk was also found to be insignificant. In this paper we examine the relation between Japanese stock returns and unanticipated exchange‐rate changes for 1,079 firms traded on the Tokyo stock exchange over the 1975–1995 period. Second, we investigate whether exchange‐rate risk is priced in the Japanese equity market using both unconditional and conditional multifactor asset pricing testing procedures. We find a significant relation between contemporaneous stock returns and unanticipated yen fluctuations. The exposure effect on multinationals and high‐exporting firms, however, is found to be greater in comparison to low‐exporting and domestic firms. Lagged‐exchange rate changes on firm value are found to be statistically insignificant implying that investors are able to assess the impact of exchange‐rate changes on firm value with no significant delay. The industry level analysis corroborates the cross‐sectional findings for Japanese firms in that they are sensitive to contemporaneous unexpected exchange‐rate fluctuations. The co‐movement between stock returns and changes in the foreign value of the yen is found to be positively associated with the degree of the firm's foreign economic involvement and inversely related to its size and debt to asset ratio. Asset pricing tests show that currency risk is priced. We find corroborating evidence in support of the view that currency exposure is time varying. Our results indicate that the foreign exchange‐rate risk premium is a significant component of Japanese stock returns. The combined evidence from the currency exposure and asset pricing analyses, suggests that currency risk is priced and, therefoe, has implications for corporate and portfolio managers.     

Entrepreneurship in the Soviet Union and post-Socialist Russia

This article advances the understanding of the present and future of Russian entrepreneurship. Based on secondary information published in the West and in contemporary Russia, empirical research and personal interviews, general characteristics of Russian entrepreneurship within different controversial periods that occurred during different periods of this country's history are presented. Also discussed are the influences of ethnic and religious minorities and foreign businesses on entrepreneurship development as well as the relatively low social status of the entrepreneur. The vitality of entrepreneurial response is discussed in terms of recent events in post-Socialist Russia including the transformation of its economy and society and its integration into the global market. In so doing, the article presents the latest trends in entrepreneurship in the country as well as a profile of the Russian entrepreneur.     

DECIDING WHEN TO DECIDE: COLLECTIVE DELIBERATION AND OBSTRUCTION

We study the impact of deliberation rules on collective learning and decision making in committees. In contrast to much of the existing literature, this article makes a distinction between the final votes over policy proposals and the cloture votes that bring them about. We show how deliberation rules can cause Pareto-inefficient outcomes and failures to bring good proposals to a final vote, and how they affect the distribution of power among committee members in the deliberative process. We further show that deliberation rules are dynamically stable, even when they generate Pareto-inefficient outcomes.     

The successful management of organisational change in tourism SMEs: initial findings in UK visitor attractions

Organisational change management theory for small and medium‐sized enterprises (SMEs) within the tourism industry is an under‐researched field. Changing political, economic, social and technological factors can leave unprepared SMEs exposed to external as well as internal pressures, which can lead to underperformance, or in worst case scenario, business failure. This paper, reporting on the findings of exploratory research of nine UK‐based visitor attractions, all qualifying as SMEs, suggests that the successful management of change is crucial for SMEs' survival and success. The findings argue that the current approach taken to organisational change management within the industry is bumpy incremental, bumpy continuous and planned. Hence, the paper provides a framework for managing organisational change based on eight critical success factors identified by the study: adaptability and flexibility, commitment and support, communication and co‐operation, continuous learning and improvement, formal strategies, motivation and reward, pragmatism, and the right people. Copyright © 2008 John Wiley & Sons, Ltd.     

The impact of social influence in Australian real estate: market forecasting with a spatial agent-based model

Journal of Economic Interaction and Coordination - Housing markets are inherently spatial, yet many existing models fail to capture this spatial dimension. Here, we introduce a new graph-based...