A Breakdown of the Valuation Effects of International Cross‐listing*

It is well known that cross‐listing domestic stocks in foreign exchanges has significant valuation effects on the listed company's shares. Using a sample of firms with dual shares, we explore the differential effects of cross‐listing on prices and we are able to separate the different sources of the benefits of cross‐listing. These sources include market segmentation, liquidity, and the bonding of controlling shareholders to lower expropriation of firm resources. Our results show that even though the market segmentation and bonding effects are both statistically significant, the economic significance of segmentation is more than double that of bonding. Furthermore, we document an economically and statistically significant increase in the liquidity of both share classes after the listing. Overall, our results explain why less and less firms are willing to list in the USA: Sarbanes Oxley has increased the cost of adopting better governance while its benefits are not substantial; and market segmentation has decreased significantly in the last years.     

Evaluating the Effectiveness of Sustainability Disclosure: Findings from a Recent SASB Study

Early research into the relationship between corporate sustainability programs and financial performance suggests a positive relationship between strong sustainability performance and a lower cost of capital. As investors increasingly incorporate sustainability information into financial decisionmaking, the importance of high‐quality sustainability disclosure is growing. Just as investors have relied on financial disclosures based on generally accepted accounting principles (GAAP) to assess corporate risk, a market standard is needed to help companies disclose comparable sustainability information. To address this issue, the Sustainability Accounting Standards Board (SASB) conducted a recent analysis of the current state of sustainability disclosure in annual Securities and Exchange Commission (SEC) filings. The study reviewed the disclosures of over 700 U.S.‐and foreign‐domiciled companies, focusing on material sustainability topics as identified by SASB's industry‐specific accounting standards. The authors find large variations among different corporate sectors in the frequency and quality, as well as the focus, of their sustainability disclosures. Then, after examining in detail disclosures within the SASB Resource Transformation and Consumer Staples sectors, the authors suggest a number of possible drivers of this variation, including key sustainability and economic trends, while also presenting evidence of increasing investor interest in sustainability information. Although the authors' analysis was not intended to determine the extent to which the quality of sustainability disclosure affects investor returns, the findings provide a useful baseline for the as yet largely unexplored relationship between sustainability disclosure and corporate financial performance.     

A destination-branding model: An empirical analysis based on stakeholders

The purpose of this study is to develop a destination-branding model based on stakeholders’ interests. It is subsequently applied to a tourist destination, namely Castilla-La Mancha (CLM), thereby creating an index that measures destination branding’s success based on similarities and differences among the different stakeholders. The index, called Success Index of Triple-Diamonds (SITD), provides an empirical evaluation of the destination brand’s degree of success and confirms the existence of differences among stakeholders. The current study offers useful information for developing strategy on the part of Destination Management Organizations (DMOs) and reveals the risks of a traditional strategy focused only on visitors that ignores the objectives of local people and entrepreneurs.     

Adopting better corporate governance: Evidence from cross-border mergers

Cross-border mergers allow firms to alter the level of protection they provide to their investors, because target firms usually import the corporate governance system of the acquiring company by law. Therefore, cross-border mergers provide a natural experiment to analyze the effects of changes in corporate governance on firm value, and on an industry as a whole. We construct measures of the change in investor protection induced by cross-border mergers in a sample of 7330 ‘national industry years’ (spanning 39 industries in 41 countries in the period 1990–2001. We find that the Tobin's Q of an industry — including its unmerged firms — increases when firms within that industry are acquired by foreign firms coming from countries with better shareholder protection and better accounting standards. We present evidence that the transfer of corporate governance practices through cross-border mergers is Pareto improving. Firms that can adopt better practices willingly do so, and the market assigns more value to better protection.     

Packard Electric/Delphi and the birth of the autopart cluster: the case of Chihuahua,Mexico

The purpose of this article is to describe, from a dual perspective, the birth and evolution of the technological cluster located in Chihuahua, Mexico. It reconstructs Packard Electric–Delphi’s evolutionary path as a dominant company, alongside the technological trajectory of the wiring harness. I build a taxonomy whose purpose is to distinguish different moments in the harness history. This approach to the harness demands systemic distinctions of a dynamic, quantitative and qualitative nature. The formation of the electrical/electronics cluster of automotive parts located in Chihuahua can be understood in the context of Packard Electric’s integration/disintegration dynamics. This regional and international reconstruction process reflects: (1) the accumulation of technological and organizational capabilities inside a firm; (2) technological competition within the sector; (3) the fact that each company follows particular technological learning ‘paths’ as well as a unique regional technological cluster formation (technological path); and (4) that the integration/disintegration dynamics of firms are difficult and unstable processes, dependent on the difference between internal and external transactional costs. L’article décrit lémergence et le développement du district technologique de Chihuahua (Mexique) à travers une approche évolutionniste qui s’attache à reconstituer une double trajectoire: celle d’une firme; Packard Electric–Delphi (PE), et celle d’une technologie, le câblage. Les différentes étapes de la technologie du câblage sont appréhendées en mettant l’accent sur la dynamique systémique de nature quantitative et qualitative. La formation du district technologique du câblage électrique/électronique de Chihuahua est mise en perspective avec la stratégie d’internationalisation et de localisation de la firme multinationale. Cette dynamique est le résultat d’un processus de développement des ressources technologiques et organisationnelles de la firme, du jeu de la concurrence technologique au sein de l’industrie du câblage et de l’articulation entre la trajectoire d’apprentissage technologique de la firme et celle associée à la formation du district technologique. La dynamique d’intégration et de d’externalisation de la firme apparaît ainsi de nature instable, dépendant des différences entre les coûts de transaction interne et externe.     

Cointegrated Periodically Collapsing Bubbles in the Exchange Rate of “BRICS”

We test the occurrence of periodically recurring rational bubbles in the exchange rate of each of the “BRICS” countries currency relative to the US dollar. The forward exchange rate is used as a proxy for the expected exchange rate, different Purchasing Parity Power (PPP)-based rules for the fundamental exchange rate are considered, and its initial value is endogenously determined. For the chosen model, the regime switching equation satisfactorily fits the data, confirming the presence of rational bubbles for all countries. The dynamics of the exchange rate series for each country is interpreted with the help of the estimated bubbles. The bubbles are compared across countries, found to be cointegrated, and this is interpreted as evidence of the international transmission of exchange rate shocks between these countries.     

How terrorism affects the economic performance? The case of Pakistan

We examine application of the Economics of Crime Monitoring Model (ECM-Model) Ruiz Estrada and Ndoma (J Policy Model 36:867–882, 2014) on Pakistan terrorism activities. The application of ECM-Model is used to evaluate the impact of terrorism on the economic performance of Pakistan economy. First part of the research work is related to introduction and background of study. The second section is associated with the theoretical and conceptual frame work that explains how terrorism affects the economy. The third part of the paper describes the methodology of the model. The fourth part of this research paper elaborates the results of the study. The second last part of the paper is the econometrics techniques and results which support the model and last part of the research work is conclusion and recommendations.     

Do Insider Trading Laws Work?

This paper presents the first comprehensive global study of insider trading laws and their first enforcement. In a sample of 4,541 acquisitions from 52 countries, I find that insider trading enforcement increases both the incidence, and the profitability of insider trading. The expected total insider trading gains increase. Consequently, laws that proscribe insider trading fail to eliminate insider profits. However, harsher laws work better at reducing the incidence of illegal insider trading.