The Global Financial Crisis and Its Impact on Australian Bank Risk

This paper examines the global financial crisis (GFC) and its impact on Australian banking risk. An augmented market model is developed to identify changes in listed Australian bank systematic risk in relation to three key events: the GFC's start in August 2007, the market downturn in Australian and global share markets in January 2008, and the announcement of Australia's Deposit and Wholesale Funding Guarantee (DWFG) scheme on 12 October 2008. The study also examines changes in bank systemic risk during these event periods. The Australian market offers a unique opportunity to observe the impact of the introduction of the DWFG in that it lacked any explicit deposit insurance prior to the crisis. Initially, the crisis period had little impact on bank systematic risk while bank systemic risk increased considerably. The share market downturn caused a marked increase in both systematic and systemic risks for Australia's major internationally connected banks followed by a reduction in both systematic and systemic risks with the introduction of the guarantee scheme for all Australian banks.     

Chinese FDI in the French and Australian Wine Industries: Liabilities of Foreignness and Country of Origin Effects

This paper explores the recent evolution of Chinese investment in the wine industries in the Bordeaux region of France and Western Australia (WA). The study identifies variations in the nature of the investments undertaken, which are not always consistent with existing theory. We explore how these differences impact on the liability of foreignness (LOF) experienced (Eden and Miller, 2004; Zaheer, 1995). We find evidence of all three of the categories of hazards identified by Eden and Miller (2004), with unfamiliarity being particularly significant, especially for wholly owned investments. We postulate that differences in context between home and host countries are a key factor explaining both the observed difficulties and the differences in experiences. The findings of our work on LOF, in terms of its nature and mitigating strategies, resonate well with existing theory, although we also find evidence of a Country of Origin (COO) effect, both in terms of Liability of Origin (LOR) and Assets of Foreignness (AOF). The variations in entry mode and LOF, however, are less consistent with existing research and pose questions in relation to the interaction between the home and host contexts, company strategy and LOF.     

A Kantian evaluation of Taylorism in the workplace

A Kantian evaluation of Taylorism in the workplace requires a consideration of four problems; (1) the conditions of agency, (2) the relation of Taylorism to these conditions, (3) an explanation of the method given by the Typic for applying the Categorical Imperative, and (4) the actual application of the Categorical Imperative to Taylorism. An agent who views himself as a performer is distinguished from an agent who is a mere observer of his own actions, and it is argued that Taylorism in effect attempts to remove the purposiveness of action from the workmen and to reduce them to the state of being mere observers of their own actions. Then it is argued that in order for one to attempt to think of a maxim as a universal law, one must posit a universal and necessary connection between the circumstances and the performances and then another such connection between the action and the purpose to be achieved. A model is constructed using heat-seeking machines, and it is argued that a principle analogous to Taylorism could not hold as a universal law for such machines. Thus, Taylorism is not an acceptable solution to the problem of coordinating the activities of self-directed agents within the workplace. Dr. Michael K. Green is Assistant Professor at the Department of Philosophy at SUNY-Oneonta. His most important publications are: Using Nature to Typify Freedom: The Application of the Categorical Imperative, International Studies in Philosophy (Fall 1982); Marx on Utility and Right, Political Theory 11, No. 3 (August, 1983), pp. 433–446; and Kant, Crimes Against Nature, and Contraception, forthcoming in The New Scholasticism.     

ON THE CONSISTENCY OF REGRESSION‐BASED MONTE CARLO METHODS FOR PRICING BERMUDAN OPTIONS IN CASE OF ESTIMATED FINANCIAL MODELS

In many applications of regression‐based Monte Carlo methods for pricing, American options in discrete time parameters of the underlying financial model have to be estimated from observed data. In this paper suitably defined nonparametric regression‐based Monte Carlo methods are applied to paths of financial models where the parameters converge toward true values of the parameters. For various Black–Scholes, GARCH, and Levy models it is shown that in this case the price estimated from the approximate model converges to the true price.     

The strategic evolution of large US law firms

In recent years, large US law firms have been undergoing significant changes. Most have switched from a professional model (P2 form) to a corporate business model, employing competitive strategies and a profit orientation. As the market for corporate legal services became more competitive, many large US law firms began to diversify the services they offer and expand their operations into new geographic regions of the country and into international markets. They even engaged in acquisitions and learned to manage and leverage their critical resources, human capital and relational capital. As a result, most of these law firms have added more professional management. All in all, the services law firms offer and the rivals with which they must contend have changed substantially over the last 15 years.     

Global monetary policy under a dollar standard

This paper derives an optimal monetary policy in a world with a dollar standard, defined as an environment in which all traded goods prices are set in US dollars, so that exchange rate pass-through into the US price level is zero. We show that the US is essentially indifferent to exchange rate volatility, while the rest of the world places a high weight on exchange rate volatility. In a Nash equilibrium of the monetary policy game, US preferences dominate; the equilibrium is identical to one where the US alone chooses world monetary policy. Despite this, we find surprisingly that the US loses from the dollar's role as an international currency, since the absence of exchange rate pass-through leads to inefficient expenditure allocations within the US. Finally, we derive the conditions for a dollar standard to exist.