The quality of market volatility forecasts implied by S&P 100 index option prices

This study examines the performance of the S&P 100 implied volatility as a forecast of future stock market volatility. The results indicate that the implied volatility is an upward biased forecast, but also that it contains relevant information regarding future volatility. The implied volatility dominates the historical volatility rate in terms of ex ante forecasting power, and its forecast error is orthogonal to parameters frequently linked to conditional volatility, including those employed in various ARCH specifications. These findings suggest that a linear model which corrects for the implied volatility's bias can provide a useful market-based estimator of conditional volatility.     

MARKETING AND AGRICULTURAL DEVELOPMENT

Marketing has a vital role in the drive to increase agricultural productivity; one of the keystones in the economic development of Africa. J. C. Abbott(¹)* has demonstrated the importance of an efective marketing system while T. W. Schultz(²) has pointed out that effective marketing is secured by allowing the price mechanism full play. Of peak relevance is his concept of efficiency prices; prices which reflect the real demand/supply relationships and so stop distortion in resource allocation.     

Liquidity Risk and Venture Capital Finance

This article provides theory and evidence in support of the proposition that venture capitalists adjust their investment decisions according to liquidity conditions on IPO exit markets. We refer to technological risk as a choice variable in terms of the characteristics of the entrepreneurial firm in which the venture capitalist invests, and liquidity risk as the current and expected future external exit market conditions. We show that in times of expected illiquidity of exit markets (high liquidity risk), venture capitalists invest proportionately more in new high-tech and early-stage projects (high technology risk) in order to postpone exit requirements. When exit markets are liquid, venture capitalists rush to exit by investing more in later-stage projects. We further provide complementary evidence that shows that conditions of low liquidity risk give rise to less syndication. Our theory and supporting empirical results facilitate a unifying theme that links related research on illiquidity in private equity.     

The ethics of corporate governance in public sector organizations

The current climate of increased accountability in public sector organizations has brought to public attention the ethical dimension of corporate governance. This article presents a conceptually informed method for undertaking of an ethically focused audit corporate governance. The conceptual-theoretical terrain is set out in three dimensions: ethics as applied moral philosophy; equity as social justice; and corporate governance as the moral health of an organization. At an operational level, the conceptual model proposed provides a framework to evaluate the overall integrity of an organization and embraces the inter-related themes of individual responsibility, social equity and political responsibility. A method for ethical audits is also set out. It emphasizes the significance of key personnel in (re)producing and challenging the organizational ethos, while recognizing the necessary limitations placed on researchers' commitment to anonymity and confidentiality in the collection, interpretation and analysis of data, and in the eventual sharing of such data.     

Performance of Dairy Plants in the Cooperative and Private Sectors in India

During the 1990s the cooperative dairy processing sector in India was exposed to greater competition from private sector plants. In this paper we measure cost efficiency (decomposed into technical and allocative efficiency) at the dairy plant level in the cooperative and private sectors in India. Two efficiency measurement methods are used: stochastic frontier analysis (SFA) and data envelopment analysis (DEA). The study utilizes an (incomplete) panel data sample of 23 plants, comprising 13 cooperative plants and 10 private plants, observed between 1992/93 and 1996/97. Our results indicate that cooperative plants are more cost efficient than private plants, although this difference is insignificant at the 5 per cent level. Furthermore, we observe that the cost efficiency of cooperative plants has not improved since market liberalization in 1991. These results suggest that the liberalization policy has not yet realized its expected benefits, and also cause us to question the general expectation that private operators will have efficiency advantages relative to cooperatives.     

The impact of foreign and domestic remittance types and senders on education outcomes

Migration and remittances are very important for Nepal, yet the country continues to be plagued by low financial development. Increases in human capital investments, such as enrollment of school‐aged children, are a possible gain from the country's labor movements, which can be leveraged further through an understanding of the microeconomic processes involved. This study examines how remittances from both household and nonhousehold members affect school enrollment rates for children in Nepalese families. We analyze the positive and negative impacts of migration and remittances separately and consider both the type and location of the remittance sender using the Nepal Living Standards Survey (NLSS‐III) of 9,335 school‐aged children. We find enrollment more associated with an exogenous process and use this to estimate marginal effects in which remittances significantly increase children's school enrollment by about 2% points in most cases. These results suggest policymakers should encourage domestic migration (which allows proximity between senders and recipients of remittances as well as less family disruption).