CEO Optimism and the Credibility of Open-Market Stock Repurchase Announcements

Given their low-cost and low level of commitment, open-market stock repurchase announcements are often viewed by the market with a degree of skepticism, leading to a weak initial market reaction followed by positive stock price drifts. The authors argue that the repurchase announcements made by optimistic CEOs should be more credible than those made by nonoptimistic CEOs. Our results show that optimistic CEOs are more likely to actually buy back their shares after the announcements and the abnormal returns following repurchase announcements are larger for optimistic CEOs. This evidence suggests that CEO optimism is an important factor that the market seems to overlook while evaluating the credibility of open-market repurchase announcements. Our main contribution is to link one of the most important managerial traits, optimism, to the open-market repurchases.     

International briefing 18: training and development in Vietnam

Vietnam provides a typical case of an emerging economy, which has attempted to develop the country and join the world economic mainstream with a highly agricultural base, large and young labour force, and a dynamically growing private sector. After a long period of quantitative growth, it is now focusing on achieving quality of development, with a view to balance economic growth and quality of life improvement for its population. Education has been chosen to be the key plank in the successful implementation of this strategy. This article reviews the general socio‐economic background of the country, the high need for skilled labour, the structure of its educational system, the pitfalls at the high education level, and its strategy to overhaul the whole system in order to ensure quality from the input phase of the development process.     

A Participatory Simulation to Facilitate Farmers' Adoption of Livestock Feeding Systems Based on Conservation Agriculture in the Uplands of Northern Vietnam

In the mountain areas of northern Vietnam, extensive husbandry of large-ruminants is limited by the lack of natural forage. Since 2000, the Mountain Agrarian System Program has been concerned with this issue and has evaluated technical alternatives aimed at sustainable integration of crop-livestock systems. One alternative consists of feeding systems for largeruminants based on cropping systems with plant cover. Diffusion of information about the new system is supported by a set of interactive communication tools for use between farmers and researchers. A participatory simulation method was developed that combines a compartmental model of the village territory with five technical innovations. Farmers simulate the adoption of the innovations they choose among food-forage cropping systems in rotation or in association, and urea-treated straw. They evaluate the quantity of forage that can be grown for their herd using the chosen set of techniques.

Simulations revealed farmers' constraints and objectives in adopting sustainable cropping systems on the hillsides while maintaining a small animal husbandry system. The results obtained by each farmer provide a useful basis for discussion about the implementation of innovation. This participatory simulation method could be more widely used to facilitate the diffusion of innovations such as integrating livestock feeding systems with conservation cropping practices.     

Bank risk in uncertain times: Do credit rationing and revenue diversification matter?

We show that bank risk rises, particularly for larger banks and those with greater interest-sensitive liabilities, during times of economic policy uncertainty through two economic channels: “credit rationing” and “revenue diversification.” The credit rationing channel shows that economic policy uncertainty increases aggregate loan spreads, exacerbating both adverse selection and moral hazard problems leading to higher bank risk. The revenue diversification channel suggests that as economic policy uncertainty reduces bank profits from traditional interest-based products, banks diversify into other non-traditional activities, thereby increasing their instability. Overall, our findings highlight the impact of economic policy uncertainty on exacerbating bank risk.     

Why Gaussian macro-finance term structure models are (nearly) unconstrained factor-VARs

This paper explores the implications of filtering and no-arbitrage for the maximum likelihood estimates of the entire conditional distribution of the risk factors and bond yields in Gaussian macro-finance term structure model (MTSM) when all yields are priced imperfectly. For typical yield curves and macro-variables studied in this literature, the estimated joint distribution within a canonical MTSM is nearly identical to the estimate from an economic-model-free factor vector-autoregression (factor-VAR), even when measurement errors are large. It follows that a canonical MTSM offers no new insights into economic questions regarding the historical distribution of the macro risk factors and yields, over and above what is learned from a factor-VAR. These results are rotation-invariant and, therefore, apply to many of the specifications in the literature.     

Getting bank financing: A study of Vietnamese private firms

Private firms in transition economies are operating in an extremely uncertain environment, with underdeveloped market institutions, poorly defined property rights, and absence of reliable business data. This raises a very basic question of how owners of these firms persuade bankers to make much needed loans. This study employs an institutional perspective and argues that firms' legitimacy positively influences their accessibility to bank financing. Specifically, this study develops a model that links networking, professional management practices, and growth stage with bank financing and tests that model using a sample of Vietnamese private firms. The results support the hypotheses that growth stage and networking greatly influence firms' accessibility to bank financing, and that the impact of networking on financing is contingent on the growth stage.     

Development of human resource management in Vietnam: A semantic analysis

The present study offers a logical understanding of the development of human resource management (HRM) in Vietnam over the past 30 years. While previous studies have examined the adoption of HR practices, there remains a need to understand the current state of HRM development in Vietnam. Using a semantic analysis approach, we systematically analyzed the themes and concepts from 100 journal articles related to HRM in Vietnam, selected from academic databases between 1984 and 2013. The main study findings show that the development of HRM is associated with the key stages of economic development in Vietnam.     

Unveiling the role of entrepreneurial knowledge and cognition as antecedents of entrepreneurial intention: a meta-analytic study

Although entrepreneurial intention has been regarded as one of the most important drivers of creativity, innovation, and performance in firms, a comprehensive framework that integrates the relevant influential factors has yet to be developed. Drawing on the theory of planned behavior and the social cognitive career theory, this study investigates the critical antecedents, mediators, and moderators of entrepreneurial intention. A meta-analytic approach is employed to validate the proposed hypotheses, and 89 primary studies with a total sample size of 51,919 are analyzed. The results indicate the existence of differences in the manner in which entrepreneurial knowledge influences cognitive antecedents in the individuals who participate in new ventures. Furthermore, personal attitude and self-efficacy play a vital role in predicting entrepreneurial intention. Demographic characteristics (such as age, gender, and education background) significantly moderate the relationship between cognitive antecedents and entrepreneurial intention, indicating that men tend to adopt more entrepreneurial behaviors than women, that older individuals with more positive attitudes have a higher propensity to start ventures than younger ones, and that those with higher education attainment tend to have lower self-employment. These findings offer several recommendations. They could provide valuable references for further academic work, which should aim to extend and validate them. The findings are also very beneficial for professional experts tasked with the design of effective programs for enhancing entrepreneurial behavior.

     

Finance,growth and (macro)prudential policy: European evidence

Empirica - This paper examines the interactions between financial development, economic growth and (macro)prudential policy on a sample of 12 euro area countries. Our main takeaway is that active...     

Political Economy of Industrial Development in Vietnam’s Telecommunications Industry: A Rent Management Analysis

This article contributes to the current debate in economics on the uses and benefits of rents and rent seeking. On the one hand, public choice and neoliberal scholars highlight the redistributive and damaging aspects of rent seeking, thus rendering the policy suggestion to completely eradicate rents and rent seeking in an economy. On the other hand, institutional and development economists point out the inherent theoretical inconsistencies shown in the earlier models, and suggest that certain types of rent and rent seeking could be growth-enhancing. Using the Developmental Rent Management Analysis, this article assesses the industrial development of the telecommunications industry in Vietnam using two case studies. Qualitative research points out a number of rent management factors contributing both to the industry’s failure before the early 2000s and its subsequent success thereafter. The successful development of the telecommunications industry was fundamentally based on (i) favorable political support for rent creation, (ii) an effective structure of rent allocation and implementation, and (iii) credible incentives and pressures that encouraged local firms’ industrial upgrading. The Vietnamese experience suggests that rents can be developmental, conceivably side-by-side with rent seeking, cronyism and corruption.