Benchmarks in the spotlight: The impact on exchange traded markets

The Fix for precious metals is a global pricing benchmark that provides pricing and liquidity provision for market participants. We exploit the gradual change in the century old auction process to quantify the efficiencies related to more transparent pricing. Our focus is in the market impact of this change on exchange listed products. We find that reforms to the Fix have reduced quoted and effective bid-ask spreads and improved overall market depth. The results imply a positive spillover effect stemming from timelier and more accurate pricing information. The conditions under which we observe the benefits from transparency are related to product liquidity and the degree of market segmentation.     

Ireland's Experiments with Pseudo-Keynesianism

How stands the Irish economy? Sean Barrett of Trinity College, Dublin examines the economic problems facing Mr Haughey's government.     

Aviation and the Pursuit of Contestability

Pro-contestability policies are required to promote efficient airlines. The problem is acute in Europe where protectionist policies have led to high-fare, low-profit, low-productivity airlines and a steady loss of market than of world aviation to the low-cost profitable airlines of the Asia-Pacific region.     

The perilous effects of capability loss on outsourcing management and performance

The outsourcing of manufacturing activities and business processes has emerged as a prevalent business practice in many industries. Given this state, the lackluster performance of an alarmingly high proportion of outsourcing initiatives is somewhat surprising. In an effort to achieve aggressive cost savings objectives, many outsourcing engagements are associated with organizational resources being disposed of which can lead to a significant operational capability loss on the part of the outsourcing firm. Surprisingly little empirical research has dealt with the issues arising from this capability loss frequently associated with outsourcing. This study strives to address this void. Drawing on multiple theoretical perspectives, this study investigates the direct impact that capability loss has on outsourcing performance, and also the impact it has on the outsourcing firm's ability to effectively manage its relationship with the outsourcing provider. Results from our hierarchical regression analysis on 198 outsourcing initiatives suggest an inadequate capability evaluation up front can lead to a more substantive capability loss. Subsequently, we find that a more extensive capability loss has a direct negative effect on outsourcing performance. Prior studies have established the significant positive effect that developing a committed and cooperative relationship with the provider has on outsourcing performance. Our results corroborate these previous findings, and also demonstrate that capability loss inhibits the outsourcing firm's efforts to develop a committed and cooperative relationship with the outsourcing provider.     

The twilight of the setter? Public school budgets in a time of institutional change

We use a policy change that occurred in Oregon in the late 1980s to re‐visit the budget‐maximizing agenda setter theory of local public expenditure. Prior to 1987, Oregon school districts held operating levy elections with an exogenous, often zero or very low, spending reversion. From 1987 through 1990, districts experienced a “safety net” regime where the reversion was at least the previous year's nominal spending. We find that the “safety net” sharply limited the agenda setter's ability to use the reversion as a threat to obtain voter approval of relatively large expenditures.     

Airline Travelers' Causal Attribution of Service Failure and Its Impact on Trust and Loyalty Formation: The Moderating Role of Corporate Social Responsibility

This study examines airline travelers' causal attribution (stability and controllability) and its impact on trust and loyalty formation and investigates the moderating role of corporate social responsibility (CSR) in this process. Based on a literature review, theoretical relationships between stability, controllability, CSR, trust, and loyalty were derived, and the moderating effects of CSR on relationships between stability/controllability and trust/loyalty were examined. To empirically test these theoretical relationships, quantitative data were collected from 271 airline passengers who experienced a service failure in the past year. The results provide support for effects of stability and controllability on trust as well as the effect of stability on loyalty. In addition, the perception of CSR had positive effects on trust and loyalty. Finally, a favorable CSR perception weakened the negative effects of a service failure on trust and loyalty, particularly when the failure was attributed to a stable cause. The results highlight the important role of CSR in service failure situations and have important implications for airline managers.     

A case study of short-sale constraints and limits to arbitrage

This paper uses a unique data set of trades in a unique pair of securities that enables the precise identification of individual broker activity and the trade direction of that activity. We find direct evidence that the imposition (removal) of short-sale constraints limits (generates) trading activity consistent with brokers exploiting apparent mispricing.     

Noise-trading, costly arbitrage, and asset prices: Evidence from US closed-end funds

The behavior of US closed-end funds is very different from that of UK funds. There is no evidence that the US funds' discounts are constrained by arbitrage barriers, no evidence that higher expenses increase discounts and no evidence that replication risk increases discounts but strong evidence that noise-trader risk is priced. The differences between US and UK funds may be due to the fact that small investors dominate US funds while institutional investors dominate UK funds, or because the sample selection method for the UK funds chooses only funds that are relatively easy to arbitrage.     

责任投资趋势下的报告发布机遇

据一月份Financial Times报道,几家大型资产管理公司2011年将把部分责任投资团队搬到亚洲地区。不管其在亚洲责任投资团队的大小,该决定的重要意义在于,将会给亚洲企业带来许多新的机会。