Bank Lending to Native American Applicants: An Investigation of Mortgage Flows and Government Guarantee Programs on Native American Lands

We investigate the efficacy of government guarantee programs for mortgage loans made on tribal lands by comparing lending outcomes for White applicants and Native Americans (NAs) living on- and off reservation lands. Simultaneous equations models with the loan-to-income ratio endogenous indicate both on- and off-reservation NA applicants experience higher conditional denial rates compared with otherwise similar White applicants. NAs living on-reservation are equally as likely to be approved for mortgage loans as off-reservation NAs. On-reservation applicants self-select lower loan-to-income ratios, and are held to a higher standard for this credit variable, likely because lower housing values and other economic variables challenge on-reservation applicants. Our findings suggest lack of financial resources, lack of applicant education about and experience with the mortgage process, low creditworthiness, and lender reluctance to confront burdensome bureaucracy limit on-reservation guarantee program success.     

Sterilization of short-term capital inflows—through lower interest rates?

Reductions in international interest rates are a major cause of capital flows to emerging economies. Increases in domestic interest rates are a frequent policy response to the resulting price increases. This is often unsuccessful. The paper suggests a theoretical explanation based on distinctive features of emerging financial markets, including imperfect asset substitutability and imperfect capital mobility for some sectors of the economy. It concludes that the appropriate policy response to capital inflows may be lower interest rates.     

Realistic Portfolio Allocation Decision-Making For The Small U.S. Retail Investor

This study introduces new domestic mixed-asset and international equity securities that allow for exact portfolio replication even by small U.S. retail investors. Using these new series, various return characteristics are examined. Finally, three sets of mean-variance analyses are conducted: a domestic equity sector-only portfolio, a domestic mixed-asset portfolio, and an international mixed-asset portfolio. Real estate warrants inclusion to varying degrees in all three portfolios. International equity inclusion was also demonstrated.     

The seasoned executive's decision-making style

Leaders make decisions every day of their lives, but how they do it changes dramatically over the course of their careers. At lower levels, the job is to get widgets out the door; action is at a premium. At higher levels, the job involves decisions about which widgets to offer and how to develop them. To climb the corporate ladder and be effective in new roles, managers need to change the way they use information and evaluate options. Based on a study of the decision-making profiles of more than 120,000 executives, the authors found that people make decisions very differently in public than they do in private and that the decision styles of successful managers evolve in highly predictable patterns. The most successful managers and executives become increasingly open and interactive in their leadership (or public) styles, and more analytic in their thinking (or private) styles, as they progress in their careers. The research shows that decision-making profiles do a complete flip over the course of a career; that is, the decision profile of a successful CEO is the opposite of a successful first-line supervisor's. When does the major change in focus occur? Somewhere between the manager level and the director level, executives find that formerly effective decision styles no longer work so well. At this point, decision styles fall into a "convergence zone", where managers use all styles more or less equally. From then on, the executives continue to evolve their styles. The most successful managers come to the convergence zone quickly and continue to adjust their styles as their careers progress. Low performers seem to stagnate once they hit the convergence zone; their styles do not evolve in new directions. Clearly, relying on past successes and habits is no guarantee of success-indeed, it may be the road to failure.     

A note on the Wang and Wang measure of the quality of the compass rose

H. Wang and C. Wang [Visibility of the compass rose in financial asset returns: A quantitative study, J. Bank. Financ. 26 (2002), 1099–1111] derive a measure of the visibility of the radial patterns that appear in a plot of current and past returns, which are more commonly known as the compass rose. In theory, this measure should be positively related to the tick/volatility ratio. In practice however, we find that this relationship does not hold for higher tick/volatility ratios that are common to stock market data. Thus, the use of this measure is limited in real world applications. We propose a correction factor that improves the behaviour of the quality measure over higher tick/volatility ratios, however, further research is required to fully identify and correct the problem.     

Does reduced trade tax revenue affect government spending patterns?

Many skeptics of trade liberalization in the developing world argue that lowering trade taxes can cause significant fiscal pressures in countries particularly reliant on these taxes and result in a reallocation of resources away from important development goals. This paper evaluates whether there is evidence that central governments systematically change the composition of spending priorities in the wake of lowered trade tax revenues as a share of total government revenues. We find no systematic evidence for this concern in a sample of 51 developing countries for the 1991 through 2005 period.     

Can cooperatives brand? Exploring the interplay between cooperative structure and sustained brand marketing success

The marketing of much New Zealand farm produce has often been left in the hands of farmer/grower co-operatives. Increasingly concerns have been raised about the effectiveness of such structures. Marketers have identified the need for cooperatives to move from a farmer centric to a market centric approach. However, questions have been raised about the viability of traditional cooperative arrangements to support a market-oriented strategy. This article examines the ability of traditional and new generation co-operatives to develop and support market-based assets including brands and long-term relationships with channel buyers in order to develop a sustainable position for their members and increase returns. The findings suggest that traditional cooperatives may be able to develop innovative marketing programs but struggle to support them over the long-term due to problems in ownership structures. The new generation co-operatives studied had more sustained long-term success, as members were able to capture the equity of intangible assets such as brand value, thus ensuring they undertook actions (such as channel support) consistent with building a sustainable long-term positioning.     

Learning and the time interdependence of Costa Rican exports

Exports may enhance learning through production-induced learning by doing, learning to export by doing, and flows of information from customers. We provide evidence on the learning effects of export destination for Costa Rica for 1955 through 1980. We examine Granger-causality results and export trends to determine relationships between exports to the Central American Common Market (CACM), the rest of the South, and the North. Increasing exports to the CACM appear to promote learning in machinery, leather, and intermediate manufactures. We also find that the CACM redirects some exports away from Northern markets, probably with damaging consequences.