The Value of Investor Protection: Firm Evidence from Cross-Border Mergers

International law prescribes that in a cross-border acquisitionof 100% of the target shares, the target firm becomes a nationalof the country of the acquiror, and consequently subject toits corporate governance system. Therefore, cross-border mergersprovide a natural experiment to analyze the effects of changesin corporate governance on firm value. We construct measuresof the change in investor protection in a sample of 506 acquisitionsfrom 39 countries. We find that the better the shareholder protectionand accounting standards in the acquiror's country, the higherthe merger premium in cross-border mergers relative to matchingdomestic acquisitions.     

An alternative graphical modeling for economics: Econographicology

The rationale of Econographicology revolves around the efficacy of multidimensional graphs as the most effective visual tool to understand any economic phenomenon from a multidimensional view. The main motivation behind the creation of Econographicology is to evaluate multidimensional graphs evolved so far in economics and to develop new type of multidimensional graphs to facilitate the study of economics, as well as finance and business. Thereby, the mission of Econographicology is to offer academics, researchers and policy maker’s an alternative multidimensional graphical modeling approach for the research and teaching–learning process of economics, finance and business from a multidimensional perspective. Hence, this alternative multidimensional graphical modeling approach is offer a set of multi-dimensional coordinate spaces to build different types of multidimensional graphs to study any economic phenomenon. The following new types of multi-dimensional coordinate spaces are presented: the 5-dimensional coordinate space (vertical position and horizontal position), the mega-dynamic disks coordinate space (vertical position and horizontal position), and the mega-disks networks mapping.     

Corporate Governance When Managers Set Their Own Pay

This paper presents a model of the firm in which the manager has discretion over his own compensation, constrained only by the threat of shareholder intervention. The model addresses two main questions. How does shareholder power affect managers' compensation and their incentives to maximise firm value? And what is the optimal level of shareholder power? Expectedly, the model shows that increasing shareholder power leads to lower managerial pay. Greater shareholder power, however, also weakens the manager's incentives to maximise value and may even lead to lower profits for shareholders. There might, thus, be too much, as well as too little, shareholder power. The model characterises the optimal level of shareholder power and yields predictions about the relation between shareholder power, managerial pay, performance and firm characteristics.     

Claims frequency modeling using telematics car driving data

We investigate the predictive power of covariates extracted from telematics car driving data using the speed-acceleration heatmaps of Gao, G. & Wüthrich, M. V. [(2017). Feature extraction from telematics car driving heatmaps. SSRN ID: 3070069]. These telematics covariates include K-means classification, principal components, and bottleneck activations from a bottleneck neural network. In the conducted case study it turns out that the first principal component and the bottleneck activations give a better out-of-sample prediction for claims frequencies than other traditional pricing factors such as driver's age. Based on these numerical examples we recommend the use of these telematics covariates for car insurance pricing.     

Korean unification prospects: an assessment through the BDN-model

The debate on the possible unification of South Korea and North Korea has often been assessed from the economic perspective, which is insufficient since unification entails not only the integration of two economies but political, social and technological integration of two territories. Using the box negotiation diagram model, this paper expands the scope of the study on South Korea and North Korea unification through a multidisciplinary approach encompassing the political, economic, social and technological perspectives. Given the huge imbalanced points of unification drawn from our analysis, we observed more divergence than convergence hence, hinging the possibility of unification of serious negotiation.     

The Role of Spiritual Well-Being and Materialism in Determining Consumers’ Ethical Beliefs: An Empirical Study with Australian Consumers

A survey was conducted to investigate the relationship of Australian consumers’ lived (experienced) spiritual well-being and materialism with the various dimensions of consumer ethics. Spiritual well-being is composed of four domains—personal, communal, transcendental and environmental well-being. All four domains were examined in relation to the various dimensions of consumers’ ethical beliefs (active/illegal dimension, passive dimension, active/legal dimension, ‘no harm, no foul’ dimension and ‘doing good’/recycling dimension). The results indicated that lived communal well-being was negatively related to perceptions of the active/illegal dimension and the passive dimension and was positively related to perceptions of the ‘no harm, no foul’ dimension and the ‘doing good’/recycling dimension. Lived personal well-being was negatively related to perceptions of the active/illegal dimension and was positively related to perceptions of the ‘no harm, no foul’ dimension and the ‘doing good’/recycling dimension. Lived transcendental well-being was negatively related to perceptions of the passive dimension, the active/legal dimension and the ‘no harm, no foul’ dimension. Lived environmental well-being was negatively related to perceptions of the active/legal dimension and the ‘no harm, no foul’ dimension. The findings also indicated that materialism was positively associated with perceptions of actively benefiting from illegal actions, passively benefiting at the expense of the seller, actively benefiting from questionable but legal actions and benefiting from ‘no harm, no foul’ actions. Public policy implications of the findings and opportunities for future research are discussed.     

Blinded by Growth

Everybody loves a growth story. But that does not make growth by itself a good investment thesis. Fast‐growing countries and their companies often produce low returns for investors, and slow‐growing ones sometimes produce high returns. In exploring this apparent paradox, this article argues that valuation plays a critical role. It matters not only how fast a country or company may grow, but also how much investors pay for that growth. Blinded by growth, investors often pay too much to participate in the prospective growth of both countries and companies; and as result, they earn low returns. This tendency to overpay for growth helps explain what the author describes as indisputable evidence that, over the long term, value investing beats growth investing. This article discusses growth from three different points of view. First, it looks into the relationship between general economic growth and equity returns. Second, it examines the relationship between corporate growth and equity returns. And finally, it compares value investing with growth investing.     

Five-Stage Acculturation Process of Hispanic Consumers: Theory,Method, and Findings

This study aims at reproducing the acculturation process for adult consumers, introducing continuous measures to reveal the acculturation process’ dynamic nature, and identifying a transitional state. Using U.S. Hispanic consumers as a cardinal example, and six coordinated consumer samples, this study introduces continuous measures of cultural awareness and ethnic loyalty. The revision taken herein overcomes limitations of existing theories and models by better measuring two key forces shaping the acculturation process of Hispanic consumers and by finding a transitional state of resiliency, thereby showing that the process of consumer acculturation can best be reflected in a typology of five states.     

The Engines of Inequality

In Europe and in the United States, one of the legacies of the economic and financial crisis will no doubt be a high and particularly worrying level of economic inequality. Inequality has roots that go well beyond the 2008 collapse, but the stagnation that has followed it has made disparities in income and wealth more serious and more difficult to eradicate. The challenge now is to turn the injustice of current inequality into a theme of public mobilisation and political action.