Board Structure and Intragroup Propping: Evidence from Family Business Groups in Hong Kong

Using earnings announcement events made by group member firms in Hong Kong, this study examines the governance role of boards of directors in curbing propping activities within family business groups. We find that earnings released by group member firms affect the stock prices of their nonannouncing group peers in a manner consistent with intragroup propping. More importantly, this effect is less pronounced when the announcing firms have a larger board or a board with a higher proportion of independent directors, but more pronounced when they have an executive director from their controlling families acting as board chairperson. Furthermore, the monitoring effect of boards of directors is strengthened for firms subject to new regulations increasing board power. Our results suggest that board oversight can mitigate propping activities.     

Comparison of Mean-Risk Efficient Portfolios in Asia-Pacific Capital Markets

In order to analyze the performance of mean-risk efficient portfolios, several methods of portfolio comparison have been developed. In this paper we analyze the second-order stochastic dominance efficiency of portfolios on the mean-risk efficient frontier assuming that the risk is represented by standard deviations and concordance matrices set up on the basis of Pearson's linear correlation, Spearman's rho, or Kendall's tau. Empirical analysis of the market returns of selected Asia-Pacific stock markets is carried out considering both the U.S. dollar and euro as reference currencies, and different periods: before and during the subprime crisis. Measures and portfolios on the mean-risk efficiency frontier that should be of interest to at least one risk-averse investor are empirically documented.     

京津冀循环农业生态产业链的构建与思考

京津冀协同发展已成定局,严重的雾霾天气迫使京津冀产业转型升级,鉴于三地在农业发展上具有很强的互补性,培育和构建京津冀循环农业生态产业链将成为京津冀未来农业发展的方向。然而,目前产业链的构建中存在着区域层面的产业链尚未形成、顶层设计与协作机制严重缺失等突出问题,应加强从总体布局、工农循环相结合等五个方面的培育和引导。     

外国人眼里的中国大学

去年9月,路透中文网博客频道曾发表两篇文章,分析"前耶鲁大学校长抨击中国大学"的假新闻事件.时隔半年,英国<卫报>发表较为可靠的报道说,耶鲁现任校长列文声称,中国的顶级高校可能很快能与牛津、剑桥和美国常青藤大学相提并论.     

Fees for Reefs: Economic Instruments to Protect Mexico’s Marine Natural Areas

Stated preference methods can be used to estimate the demand function where no price variation has been observed before. This is the situation of the Mexican coral reef natural protected areas, where after the 2002 approval of a $20 pesos fee (US$1.80) the Ministry of the Environment is now considering increasing the amount of the fee, not only to raise more revenue for the park, but also to curb the number of visitors in the cases where there is excess demand. There are concerns that the very success of the reefs is bringing associated environmental damage that threatens its sustainable use. To estimate the reaction of visitors to different fee levels, we carried out a contingent valuation survey, and constructed with its results an aggregate demand for each park. This demand was then divided by seasons and nationalities, to explore the benefits and costs of differentiating fees, looking at both the revenue maximising and the welfare maximising fees. Finally we discuss how these fees would change when environmental damage functions are taken into account. The recommendation is that increasing fees up to the point where they cover both private and environmental costs would bring the highest amount of economic benefit compatible with the sustainable use of these complex and wondrous marine ecosystems.     

An approximation method to derive confidence intervals for quantiles with some applications

Standard jackknife confidence intervals for a quantile Q _y (β) are usually preferred to confidence intervals based on analytical variance estimators due to their operational simplicity. However, the standard jackknife confidence intervals can give undesirable coverage probabilities for small samples sizes and large or small values of β. In this paper confidence intervals for a population quantile based on several existing estimators of a quantile are derived. These intervals are based on an approximation for the cumulative distribution function of a studentized quantile estimator. Confidence intervals are empirically evaluated by using real data and some applications are illustrated. Results derived from simulation studies show that proposed confidence intervals are narrower than confidence intervals based on the standard jackknife technique, which assumes normal approximation. Proposed confidence intervals also achieve coverage probabilities above to their nominal level. This study indicates that the proposed method can be an alternative to the asymptotic confidence intervals, which can be unknown in practice, and the standard jackknife confidence intervals, which can have poor coverage probabilities and give wider intervals.     

What Drives Clarity of Central Bank Communication About Inflation?

This paper examines whether the clarity of central bank communication about inflation varies with the economic environment. Using readability statistics and content analysis, we study the clarity of communication on the inflation outlook by seven central banks across three continents during the recent decade. We uncover significant and persistent differences in clarity over time and across countries. However, identifying determinants of clarity that are robustly relevant across our sample of central banks proves elusive. Overall, our findings suggest that a single model for clarity of central bank communication is not appropriate. Rather, when studying clarity of communication, country-specific and institution-specific factors are highly relevant.     

Rose effect and the euro: is the magic gone?

This paper presents an updated meta-analysis of the effect of currency unions on trade, focusing on the euro area. Using meta-regression methods such as the funnel asymmetry test, evidence for strong publication bias is found. The estimated underlying effect for currency unions other than the eurozone reaches more than 60%. However, according to the meta-regression analysis, the euro’s trade promoting effect corrected for publication bias is insignificant. The Rose effect literature shows signs of the economics research cycle: reported t-statistic is a quadratic concave function of the publication year. Explanatory meta-regression (robust fixed effects and random effects), that can explain about 70% of the heterogeneity in the literature, suggests that results published by some authors might consistently differ from the mainstream output and that study outcomes are systematically dependent on study design (usage of panel data, short- or long-run nature, number of countries in the data set).     

Misallocation and financial market frictions: Some direct evidence from the dispersion in borrowing costs

Financial frictions distort the allocation of resources among productive units—all else equal, firms whose financing choices are affected by such frictions face higher borrowing costs than firms with ready access to capital markets. As a result, input choices may differ systematically across firms in ways that are unrelated to their productive efficiency. We propose an accounting framework that allows us to assess empirically the magnitude of the loss in aggregate resources due to such misallocation. To a second-order approximation, the framework requires only information on the dispersion in borrowing costs across firms, which we measure—for a subset of U.S. manufacturing firms—directly from the interest rate spreads on their outstanding publicly-traded debt. Given the observed dispersion in borrowing costs, our approximation method implies a relatively modest loss in efficiency due to resource misallocation—on the order of 1 to 2 percent of measured total factor productivity (TFP). In our framework, the correlation between firm size and borrowing costs has no bearing on TFP losses under the assumption that financial distortions and firm-level efficiency are jointly log-normally distributed. To take into account the effect of covariation between firm size and borrowing costs, we consider a more general framework, which dispenses with the assumption of log-normality and which implies somewhat higher estimates of the resource losses—about 3.5 percent of measured TFP. Counterfactual experiments indicate that dispersion in borrowing costs must be an order of magnitude higher than that observed in the U.S. financial data, in order for misallocation—arising from financial distortions—to account for a significant fraction of measured TFP differentials across countries.