How efficiency shapes market impact

We develop a theory for the market impact of large trading orders, which we call metaorders because they are typically split into small pieces and executed incrementally. Market impact is empirically observed to be a concave function of metaorder size, i.e. the impact per share of large metaorders is smaller than that of small metaorders. We formulate a stylized model of an algorithmic execution service and derive a fair pricing condition, which says that the average transaction price of the metaorder is equal to the price after trading is completed. We show that at equilibrium the distribution of trading volume adjusts to reflect information, and dictates the shape of the impact function. The resulting theory makes empirically testable predictions for the functional form of both the temporary and permanent components of market impact. Based on the commonly observed asymptotic distribution for the volume of large trades, it says that market impact should increase asymptotically roughly as the square root of metaorder size, with average permanent impact relaxing to about two-thirds of peak impact.     

Regional clusters of innovative activity in Europe: are social capital and geographical proximity key determinants?

Finding proper policy instruments to promote productivity growth features prominently in the Europe 2020 strategy and is central in many national as well as European policy debates. In view of the increased mobility of high-skilled workers in Europe, ongoing globalization and increased interregional and international co-operation, location patterns of innovative activity may be subject to drastic changes. A proper understanding of location patterns of innovative outputs can enhance the effectiveness and efficiency of national and European placed-based innovation policies. Building on the literature on the knowledge production function, the aim of this article is to explain the observed differences in the production of innovative outputs across European regions. Our main research question is whether geographical proximity and social capital are important vehicles of knowledge transmission in Europe. Several other variables are used to control for structural differences across European regions. We find support for the hypothesis that both social capital and geographical proximity are important factors in explaining the observed differences in the production of innovative output across European regions.     

Does education promote social capital? Evidence from IV analysis and nonparametric-bound analysis

This study uses the British National Child Development Study to examine the effect of educational attainment on social capital at the individual level. Social trust and membership of voluntary groups are considered as two basic indicators of social capital. We employ the IV analysis and nonparametric bound analysis to tackle the problem of education endogeneity. Both the approaches reveal that the OLS estimator of the educational effect suffers from an upward bias in the study of group membership. We do not observe any significant bias in the educational effect on social trust. Our empirical findings indicate that education has a positive influence in promoting social trust and membership of voluntary groups.     

Modeling Energy and Development: An Evaluation of Models and Concepts

Most global energy models are developed by institutes from developed countries, focusing primarily on issues that are important in industrialized countries. Evaluation of the results for Asia of the IPCC/SRES models shows that broad concepts of energy and development, the energy ladder and the environmental Kuznets curve, can be observed in the results of the models. However, improvements can be made in modeling the issues that underlie these concepts, like traditional fuels, electrification, economic structural change, income distribution, and informal economies. Given the rapidly growing importance of energy trajectories of developing countries for global sustainability, the challenge for the future is to develop energy models that include all these aspects of energy and development.     

The development of standard costing at SaintGobain, 1920-60: forty years of quarantine?

Standard costing, conceived in the first two decades of the twentieth century in the United States, became widespread in American literature and enterprises between the two World Wars but was not introduced at Saint-Gobain until around 1960. This article investigates the circumstances behind the forty-year period separating the availability of the technique and its application in a significant French company. The time lag required by the French accounting profession to adopt the technique is put forward as the primary, though not the only, cause of this delay.     

Private Equity: Boom and Bust?

The private equity or leveraged buyout (LBO) market in Europe and the U.S. has grown enormously over the last two decades, from $7.5 billion in 1991 to $500 billion in 2006. Much of the financing of recent transactions has come in the form of syndicated debt, which is dispersed after origination to many non‐bank financial institutions. This financing practice has two important possible consequences: First, bankers' incentives to engage in effective ex‐ante screening and ex‐post monitoring of deals have been weakened, which may have led to excessive lending while encouraging buyers to overpay. Consistent with this possibility, the authors provide new evidence that some recent transactions have occurred at very low EBITDA‐to‐capital ratios, financed with high levels of debt that recall those of the late 1980s and early 1990s. Second, there is a scarcity of information about the identity of the ultimate holders of the LBO debt; and as a consequence of the resulting uncertainty, a few defaults of major LBO deals could cause a drying up of new funding for financial institutions. The end result could be that the veil covering the repackaging of LBO debt converts a small shock to the LBO sector into a liquidity crisis for its financiers. Such liquidity problems could in turn affect not the financing and re‐financing of just LBO deals, but other as set classes as well, including lending by banks to public firms. The authors offer a number of suggestions for increasing the transparency of this market.     

CMH Real Estate Group--The biggest private real estate group in France

The great design comes from the great ambition. Just as our CMH Group, we first have a good tradition in practice. As the leading enterprise in France and Lille area, the group always lays stress on the sustainable development of our company. This is the best development policy of CMH Group in realizing her double goal: develop and help others to develop. First of all, we help our customers to develop, as housing supply is not only the supply of walls and roofs.