The generic existence of rational expectations equilibrium in the higher dimensional case

The study of the generic existence of rational expectations equilibrium has concentrated on three cases, according to whether the space of “states of private information” has dimension less than, equal to, or greater than the price space. Previous results have shown that in the first case fully revealing equilibria exist generically and in the second case there are open sets of environments with no equilibrium. This paper shows that in the third case there is a residual set of environments which permits equilibria which are arbitrarily close to fully revealing.     

浅析泛珠三角旅游区域合作的结构优化

以核心——边缘理论为基础，以泛珠三角区域旅游合作为实证，从资源、经济发展、交通几个方面分析泛珠三角旅游区域结构实现优化的现实条件，认为泛珠三角区域旅游合作促进了区域旅游经济活动空间结构形态的优化，并对优化了的泛珠三角旅游区域结构进行描述。     

Protecting Strategic Knowledge: Insights from Collaborative Agreements in the Aerospace Sector

This paper explores the dilemma that firms face with respect to knowledge sharing in strategic alliances. On the one hand, alliance success is associated with high levels of interaction and co-operation between partners. On the other hand, full and open co-operation exposes a firm's distinctive knowledge and skills and makes it vulnerable to opportunistic moves by alliance partners. Hence firms experience a fundamental paradox: to gain the greatest benefits they must exchange information and knowledge with external parties yet, at the same time, they must protect themselves against knowledge appropriation. This dilemma is particularly acute in the aerospace sector where political imperatives strongly influence partner choice and collaborators are often strong rivals in other contexts. In this paper we use data drawn from four collaborative agreements in the aerospace sector to explore the ways in which a focal firm has sought to protect its strategic knowledge and manage knowledge flows in alliance relationships. We find that existing theoretical lenses provide valuable but partial insights into the question of knowledge appropriation in alliances and offer limited guidance to managers charged with making alliances work. We suggest that some rich insights can be gained by focusing on the overlaps and interstices between existing theories and that greater exploration of the everyday working practices in alliances may offer a useful starting point for improved theorising.     

Audit Pricing of Shared Leadership

This study explores audit implications of shared leadership in client firms. Analyzing data from 2002 to 2013 of Korean listed companies, we find that auditors spend fewer audit hours and charge lower audit fees for clients with multiple CEOs. Additional tests reveal that the lower audit fees for co-CEO clients are likely attributable to reduced audit effort rather than to reduced hourly rates. We also document that firms with co-CEOs exhibit better-reporting quality than do firms with a solitary CEO. In sum, this article presents evidence that mutual monitoring via co-CEO appointments assures high-quality financial reporting of audit clients, and thus leads to reduced audit fees.     

Do Family Owners Use Firm Hedging Policy to Hedge Personal Undiversified Wealth Risk?

We examine whether family ownership affects the value impact of the operational and financial dimensions of firms’ hedging policies. We show that family firms’ market valuations are higher than those of non‐family firms, consistent with the view that family firms benefit from family owners’ long‐term perspectives and ability to monitor managers. In addition, while both operational and financial hedging policies per se are valuable in non‐family firms, they do not create any value in family firms. These results support the notion that the founding families’ need to hedge the risk of their undiversified personal wealth portfolio leads to suboptimal risk management decisions.     

Trade Openness and Vertical Structure: Evidence From Korean Firm-Level Data

Recent theories and empirics suggest that trade openness increases production fragmentation across countries. In this paper, we focus on the relationship between trade openness and firms’ choice of vertical structure. We find supportive, firm-level evidence that upon trade liberalization, firms restructure their organization by downsizing their domestic production processes (i.e. domestic vertical disintegration) and relocating their input production plants to other countries (i.e. cross-border vertical integration).     

The Question of Sustainability for Microfinance Institutions*

Microentrepreneurs have considerable difficulty accessing capital from mainstream financial institutions. One key reason is that the costs of information about the characteristics and risk levels of borrowers are high. Relationship‐based financing has been promoted as a potential solution to information asymmetry problems in the distribution of credit to small businesses. In this paper, we seek to better understand the implications for providers of “microfinance” in pursuing such a strategy. We discuss relationship‐based financing as practiced by microfinance institutions (MFIs) in the United States, analyze their lending process, and present a model for determining the break‐even price of a microcredit product. Comparing the model’s results with actual prices offered by existing institutions reveals that credit is generally being offered at a range of subsidized rates to microentrepreneurs. This means that MFIs have to raise additional resources from grants or other funds each year to sustain their operations as few are able to survive on the income generated from their lending and related operations. Such subsidization of credit has implications for the long‐term sustainability of institutions serving this market and can help explain why mainstream financial institutions have not directly funded microenterprises. We conclude with a discussion of the role of nonprofit organizations in small business credit markets, the impact of pricing on their potential sustainability and self‐sufficiency, and the implications for strategies to better structure the credit market for microbusinesses.     

The Innovation Imperative: An analysis of the ethics of the imperative to innovate in public sector service delivery

Innovating to improve public service is regarded as potentially obligatory, not merely laudable, part of good public management. However, the moral content of an obligation to innovate is not well understood. How can we innovate ethically? In academic bioethics and research ethics, the obligatory nature of the ‘research imperative’ is discussed and criticized. In this article, I outline the content of what I call the ‘innovation imperative’ and draw a parallel between the innovation imperative and the research imperative, arguing that the ethical principles that govern innovation in public service are similar to those governing research imperative in biomedical sciences.     

Job Market Signaling: What Drives the Productivity of Finance Ph.D.s?

We study the research productivity of new finance Ph.D.s as measured by the number of quality publications. A commonly accepted notion is that the highest ranked schools produce the candidates with the greatest potential for high‐quality publications. Our results, however, find publications or revisions in top‐tier journals during the doctoral program are a stronger measure of potential research productivity than the school attended. Our findings demonstrate how candidates outside of the top schools can signal their future research productivity. Even though we examine the specialized labor market, our results have broader implications for markets outside academics.