Optimal make–take fees for market making regulation

We address the mechanism design problem of an exchange setting suitable make– take fees to attract liquidity on its platform. Using a principal–agent approach, we provide the optimal compensation scheme of a market maker in quasi‐explicit form. This contract depends essentially on the market maker inventory trajectory and on the volatility of the asset. We also provide the optimal quotes that should be displayed by the market maker. The simplicity of our formulas allows us to analyze in details the effects of optimal contracting with an exchange, compared to a situation without contract. We show in particular that it improves liquidity and reduces trading costs for investors. We extend our study to an oligopoly of symmetric exchanges and we study the impact of such common agency policy on the system.     

Teaming Up? China,India and Brazil and the Issue of Benefit-Sharing from Genetic Resource Use

ABSTRACT

This article focuses on an area that has not been systematically addressed but is of crucial importance to China, India and Brazil: the global governance of genetic resources. All three are biodiversity-rich and, ever since biotechnology promised to turn DNA into gold, have been significant players in the genetic-resources regime complex. Shortcomings notwithstanding, the establishment of a new access and benefit-sharing regime constitutes a rare instance where emerging countries have succeeded in becoming rule-makers of sorts. We analyse how these three countries have sought to pursue their interests in this area, especially after the extension of national sovereignty over previously ‘free’ genetic resources and the erection of a complex set of rules attempting to regulate access to and benefits from their utilisation from the early 1990s onwards. Despite presenting a generally unified front in international fora, their domestic implementation differs significantly and raises questions about the continuation of a common international position. The article adds to our understanding of emerging countries’ engagement with global governance by focusing on the concrete drivers and domestic processes that have motivated and shaped the agency of China, India and Brazil in this new policy regime.     

Resource abundance,financial crisis and economic growth: did resource‐rich countries fare better during the global financial crisis?

This study examines the role of resource abundance in the cross‐country differences in the impacts of the global financial crisis (GFC) of 2008–2009. Using forecasts from the unobserved components model and exponential smoothing technique, we estimate the output levels a country would reach in 2009 and 2013 in the absence of the GFC, and compare these with the realised output levels. We find large variations in the output losses across 72 countries. The mineral‐rich countries have been found to be in a strong position to survive any adverse shocks stemming from the GFC. Income per capita, trade openness, and institutional quality and government effectiveness are also found to be key factors determining the differences in output loss in the post‐crisis period. These findings have strong implications for resource‐rich countries such as Australia and are expected to shed new light on alternative policy designs and appropriate strategies to deal with any future economic crisis.     

Impact of environmental information disclosure and real estate segments on cost of debt: Evidence from the Chinese real estate industry

The novel part of this paper is to examine the individual and joint effects of the real estate segments (RETs) and environmental information disclosure (EID) on the cost of debt (COD) in the real estate industry in China. Building on extant literature, using 1,250 firm‐year observations from 2006 to 2016 and applying both Feasible General Least Squares and Two‐stage Least Squares Instrumental Variable approaches, we provide evidence that the commercial RET leads to an increase in the COD, while EID leads to a decrease in the COD. The joint effects of the RETs and EID on the COD indicate a significantly positive relationship with the COD. This signifies that even with the increased levels of EID in commercial real estate sectors, its COD is higher than for residential real estate sectors. These findings have important policy implications for environmental risk assessments for real estate sectors, their lending institutions and wider stakeholder groups.     

Cultural indicators in Abu Dhabi: theoretic framework and challenges for their building

Quality & Quantity - Evidence-based decision-making in Abu Dhabi cultural sector is increasingly being influenced by the development of data generation from a coordinated statistical system....     

Financial globalization and stock market risk

This paper examines stock market volatility measured by either “beta-volatility” or by the standard deviation of stock returns over 1995-2007. In our dynamic panel data framework, after controlling for size, turnover, and real output growth, we find some support to increases in financial integration reducing total stock return volatility for representative emerging markets, with almost no impact for industrial economies. Allowing for feedback effects from stock volatility to stock turnover, we obtain a richer interpretation for the broadening of investor basis hypothesis: more integrated financial markets leads to lower stock volatility, yet these are not so strong as found previously and are not accompanied by more turnover.     

Stock Market Reaction to Quality,Safety, and Sustainability Awards in Logistics

Although quality, safety, and sustainability are important concerns in logistics, managers are sometimes reluctant to invest in these areas because it is not always clear how such investments will benefit firm performance. Empirical literature provides little guidance in the context of logistics as previous studies report mixed findings across a diverse set of industries, which may not be directly applicable to logistics. To address this gap, we conducted an event study to estimate the stock market reaction to quality, safety, and sustainability award announcements in logistics. Based on 244 award announcements during the period 2004–13, we found that stock market participants react positively to announcements of these awards. The market reaction appears to be stronger for sustainability awards than for quality and safety awards. Our results also suggest that the market reacts more favorably to quality and sustainability award announcements for firms with better past financial performance and for smaller firms.     

Asymmetric effects of financial development on South-South and South-North trade: Panel data evidence from emerging markets

Using bilateral trade data in total and technology-and-skill-intensive manufactured goods for 28 developing countries that account for 82% of all developing country manufactures exports between 1978 and 2005, this paper explores the effects of financial development on the pattern of specialization in South-South and South-North trade. The empirical results using dynamic panel regressions and comprehensive sensitivity tests suggest that financial development in the South has an economically and statistically significant positive effect on the share of total and technology-and-skill-intensive manufactures exports in GDP, and total exports in South-South trade. In contrast, no such significant or robust effect of financial development is found in South-North trade. Overall, the positive effect of financial development is found to be asymmetric favoring South-South significantly more than South-North trade. In addition, financial development is found to be increasing technology-and-skill-intensive manufactured goods exports significantly more than total manufactured or merchandise goods exports.     

Arresting the Killer in the Kitchen: The Promises and Pitfalls of Commercializing Improved Cookstoves

In a shift exemplary of neoliberal approaches to development, major funders of household energy interventions have begun to emphasize market-based stove dissemination over partially subsidized models. Stove promoters are increasingly expected to operate as self-sustaining businesses. This shift is viewed as a way to “scale-up” in order to reach millions of poor households lacking access to clean cooking technologies. Using the case of GIRA, an NGO that has successfully distributed cookstoves in Mexico’s Central Highlands for nearly two decades, we demonstrate how this trend presents challenges for organizations operating effectively with outside funding in highly contextual local conditions.