Unelected Power,the quest for legitimacy in central banking and the regulatory state,by Paul Tucker

Business Economics -     

Recasting Urban Governance through Leeds City Lab: Developing Alternatives to Neoliberal Urban Austerity in Co‐production Laboratories

This article reports on a research project, Leeds City Lab, that brought together partner organizations to explore the meanings and practices of co‐production in the context of urban change. Our intention is to offer a response to the crisis in urban governance by combining the growing academic and practitioner debates on co‐production and urban laboratories in order to explore radically different institutional personae that can respond to deficits in contemporary urban governance, especially relating to participation and disenfranchisement, and ultimately unlock improved ways of designing, managing and living in cities. Our analysis has identified four key ways in which co‐production labs can recast urban governance to more progressive ends: by moving beyond traditional organizational identities and working practices, embracing grey spaces of new civic interfaces, foregrounding emotions and power and committing to durable solutions. Ultimately, what we point towards is that urban governance can be more effectively enacted in co‐production labs that bring together universities and the public, private and civil society sectors on a basis of equality, trust and openness. These spaces have the potential to unlock a city's knowledge, resources and assets, to unpack complex challenges and to build capacity to deliver improved city‐wide solutions.     

The organizational context and use of routine data for cancer service management

The authors studied the use of routinely available data by four cancer networks in England. Data use was not well developed, but beneficial structures included commitment by a full-time information officer, enthusiasm of a clinician with professed interest in multiple sources of information, and good links with external networks and clinical service groups. Policy-makers should support organizations where data are valued and integrated into performance.     

Indexing a bond's call price: an analysis of make-whole call provisions

We analyze a new form of call provision known as a “make-whole” call, which utilizes a floating call price based on the level of current interest rates. As rates drop (rise), the call price increases (decreases.) Usually, a floor at par sets a minimum call price. This provision effectively eliminates the reinvestment rate risk associated with bonds with fixed-price call provisions. Survey results indicate a majority of Chief Financial Officers (CFOs) believe make-whole call provisions are “costless.” Analysis of 318 recent, make-whole call bonds indicates that this provision is indeed priced. On average, the at-issue yield-to-maturity of a make-whole call bond is 11.2 basis points higher than the yield of a comparable straight bond.     

Business,Governments and Political Risk in South Asia and Latin America since 1970

This article examines how businesses perceived political risk in South Asia and Latin America over the last half century. Employing data from an oral history database at Harvard Business School, the article identifies five major sources of political risk: macroeconomic and policy turbulence, excessive bureaucracy, political instability, corruption, and violence. Marked regional differences were identified in perceptions and responses to risks. Macroeconomic and policy turbulence was the biggest perceived source of risk in Latin America. Excessive bureaucracy was the biggest source of perceived risk in South Asia. South Asian businesses often avoided bureaucracies, while Latin Americans worked with them.     

The impact of technology-motivated M&A and joint ventures on the value of IT and non-IT firms: a new examination

We extend Lee and Lim (Rev Quant Financ Account 27:111–123, 2006) who provide empirical evidence on the impact of mergers and acquisitions (M&As) and joint ventures on the value of information technology (IT) and non-IT firms. Using technology-motivated transactions, we examine whether there are differences in market response to the announcement of M&As and joint ventures, and we consider the long-term performance of such firms. We find the market provides no (positive) reaction to joint ventures (M&As) at the announcement. We also present new evidence suggesting the market reacts more favorably to the announcement of technology M&As relative to joint ventures for our full sample, IT sample and non-IT sample. However, our examination of these firms’ long-term performance suggests the initial reaction is not fully supported. The findings suggest improved (declining) operating performance for joint venture (M&A) firms, and evidence to conclude joint venture firms achieve superior long-term performance changes for both accrual- and cash-based measures. To explain these inconsistencies, we employ a set of control variables previously documented as determinants of the innovation ownership decision. For joint venture firms, we find that, while the market fails to consider the importance of the firms’ R&D intensity and growth prospects in its initial reaction, these are ultimately key indicators of their future performance. The evidence also suggests the market overreacts to M&A announcements because it over-weights the impact of R&D intensity on the firms’ future performance in its initial response.     

Farm Size Growth and Participation in Agri‐environmental Schemes: A Configural Frequency Analysis of the Swiss Case

This paper examines the relationship between farm growth and participation in agri‐environmental schemes, using the example of meadow extensification schemes in Switzerland. As a result of small farm sizes in Swiss agriculture, theory would suggest that economies of scale are considerable for market production activities, so that for growing farms it would be rational to intensify. Configural frequency analysis is used to identify and describe combinations of farm size development and proportion of meadows placed under agri‐environmental schemes. In the Swiss case, growing farms are likely to reduce their participation, whereas shrinking farms have a growing share of their meadows under extensification schemes.     

Portfolio Insurance Strategies when Hedging Affects Share Prices

Option-based portfolio insurance can result in coordinated buying and selling, which destabilizes markets such that hedgers fail to achieve their objective. Gennotte and Leland (1990) show portfolio insurance strategies can have an impact on price movements. Ramanlal and Mann (1996) show how price movements, in turn, can alter hedging strategies. In this paper, we combine these separate effects and develop an equilibrium, executable hedging strategy. This hedging strategy requires less rebalancing than traditional portfolio insurance; more important, it achieves downside protection with a less destabilizing impact on security prices.     

Dynamic mode decomposition for financial trading strategies

We demonstrate the application of an algorithmic trading strategy based upon the recently developed dynamic mode decomposition on portfolios of financial data. The method is capable of characterizing complex dynamical systems, in this case financial market dynamics, in an equation-free manner by decomposing the state of the system into low-rank terms whose temporal coefficients in time are known. By extracting key temporal coherent structures (portfolios) in its sampling window, it provides a regression to a best fit linear dynamical system, allowing for a predictive assessment of the market dynamics and informing an investment strategy. The data-driven analytics capitalizes on stock market patterns, either real or perceived, to inform buy/sell/hold investment decisions. Critical to the method is an associated learning algorithm that optimizes the sampling and prediction windows of the algorithm by discovering trading hot-spots. The underlying mathematical structure of the algorithms is rooted in methods from nonlinear dynamical systems and shows that the decomposition is an effective mathematical tool for data-driven discovery of market patterns.