Formal Rehabilitation Procedures and Insolvent Firms: Empirical Evidence on the British Company Voluntary Arrangement Procedure

The British Company Voluntary Arrangement (CVA) is a relatively new debtor rehabilitation process intended to help financially troubled companies, particularly SMEs, resolve their difficulties without being forced into liquidation by secured creditors anxious to recover their funds. This paper is based on a survey conducted by Milman and Chittenden for the Association of Chartered Certified Accountants that is the largest and most comprehensive on the subject of British CVAs. It has three principal objectives: (i) to outline the defining characteristics of CVAs; (ii) to analyse the relationships between CVA performance and contextual factors; (iii) to provide policy recommendations based on those findings. Among other things we find that CVA success is most closely associated with sound fundamental prospects for recovery and supportive creditors. Our principal recommendation is that ways should be found of lowering the fixed costs of CVAs to make the procedure feasible for a larger number of small firms.     

Real Wages in Australia and Canada, 1870–1913: Globalization versus Productivity

Australia's and Canada's real wage experiences between 1870 and 1913 were distinctive. Faster productivity growth underpinned Canada's overtaking of Australia's wage levels. The globalization forces of migration and trade also shaped their comparative wages, principally by reducing wage growth in Canada. Immigration increased slightly Australia's real wages, but reduced wage levels in Canada, and tempered there the beneficial effects of rising productivity and improving terms of trade. In contrast, wage earners' share of national income rose after 1890 in Australia, with the productivity slowdown hitting chiefly rents and profits. Distributional shifts favouring wage earners in Australia, and the depressing effects of mass immigration on wages in Canada, limited Canada's wage lead before 1914, despite her faster productivity growth.     

Stackelberg thresholds in network routing games or the value of altruism

It is well known that the Nash equilibrium in network routing games can have strictly higher cost than the optimum cost. In Stackelberg routing games, where a fraction of flow is centrally-controlled, a natural problem is to route the centrally-controlled flow such that the overall cost of the resulting equilibrium is minimized.We consider the scenario where the network administrator wants to know the minimum amount of centrally-controlled flow such that the cost of the resulting equilibrium solution is strictly less than the cost of the Nash equilibrium. We call this threshold the Stackelberg threshold and prove that for networks of parallel links with linear latency functions, it is equal to the minimum of the Nash flows on links carrying more optimum flow than Nash flow.Our approach also provides a simpler proof of characterization of the minimum fraction that must be centrally controlled to induce the optimum solution.     

Too Much Monitoring, Not Enough Performance Pay

This paper endogenises the internal organisation of competitive firms in a simple general equilibrium framework. The options are monitored teams, unmonitored teams motivated by collective performance pay, and self-employment. The choice of incentive scheme depends on market price and also affects price through its influence on output. As more people opt for self employment, pecuniary externalities increase the pressure on the rest to follow suit and Pareto rankable multiple equilibria arise. The conditions for a competitive equilibrium to be constrained efficient are restrictive and everyone may gain from policies limiting monitoring and self employment and from the imposition of entry taxes.     

An exploratory study of the management of product replacement

The process of product replacement is a surprisingly neglected area of innovation. Its existence as an important corporate activity is known through prior research and anecdotal evidence. This study was designed to shed some light on the replacement activities which are conducted by large companies in Britain and America. The findings revealed a number of different approaches to product replacement and suggested that related activities can be understood (and measured) by seven distinct dimensions.     

China-Brazil,Both Challenges and Opportunities for the Cooperation

■ Latin America-Brazil trade corridor grows ahead of global development speed ■ From logistics to tax regulations, Sino-Brazilian trade cooperation faces a series of obstacles ■ Sino-Brazilian economic and trade cooperation is far more than simple resources supply     

Foreign Direct Investment in China: An Examination of the Literature

Since 1978, when China announced its ‘open-door’ policy to pursue the country's long-term national goal, the Four Modernisations, more than 220,000 foreign funded ventures have been approved. By the end of 1994 some US$300 billion of contracted investment had been agreed and US$95 billion of utilized investment, making the country the most important recipient of foreign direct investment (FDI) in the developing world. This paper analyses the phenomenon of FDI in China. It examines the different forms and composition of FDI, reviewing its development since the early days of the ‘open-door’ policy and analysing its importance for Chinese domestic and export industries, as well as Western investor companies. Furthermore, the paper focuses on the world-wide sources of FDI in China and its distribution by both region and industry. Additionally, it reviews the existing research on FDI in China, emphasizing the investment mode of equity joint venture.