A destination VAT for CIS trade

This paper was originally produced as a co-operative study between the Fiscal Affairs Department and the European II Department of the International Monetary Fund. It is intended for inclusion in a special issue on fiscal policy of the journal MOCT-MOST, Economic Policy in Transitional Economies (Kluwer Academic Publishers). The authors would like to thank Henri Lorie, of the European II Department, and John Crotty and James Walsh, of the Fiscal Affairs Department, for their extensive contributions to the analysis. They also wish to thank the numerous staff members of the two departments who made factual contributions to this effort.     

Small firm networks: a successful approach to innovation?

This paper considers the increasing trend of inter–working among small firms. Networks of small firms co–operate in certain activities, such as marketing, purchasing, R&D, training or manufacturing. But does co–operation lead to innovation? To answer this question published evaluations of small firms co–operating for mutual benefit are reappraised. Inter–working among small firms is then investigated further by interviewing three network brokers. The brokers were funded by regional governments and they facilitated co–operation between small firms. These semi–structured discussions explored the key characteristics of successful networks, the responsibilities of the broker and the level of innovation occurring. Networking is primarily a competitive response. It needs to evolve into a mechanism to enable small firms to develop innovative products and processes jointly. Small firms may have to rethink their approach to co–operation, and their motives for initiating inter–working if they are to benefit fully from co–operation.     

Automated securities trading

Technological developments have permitted rapid changes in the structures of securities trading markets. These changes call for a reevaluation of regulatory regimes. For example, because divergent market structures competing for order flow may fall within different regulatory structures, the proper allocation of regulatory costs should be weighed. Because of the open access by all investors to all markets that technology permits, regulators need to examine the level of oversight necessary to ensure the protection of investors. Because of existing statutory limits, automated systems may pose particular problems in the U.S. regarding the appropriate levels of regulation for non-intermediated trading and cross-border systems that are regulated by an overseas authority. On another topic, automation facilitates increased transparency. In turn, transparency promotes investor protection, encourages market liquidity, and fosters the efficiency of securities markets by facilitating price discovery and open competition, thus reducing the effects of fragmentation. In the end, because it enhances the efficiency of the market's price discovery function and liquidity, transparancy contributes to the efficient allocation of scarce capital among competing demands for that capital. Finally, regulators should participate in the review of automated systems integrity, especially in the areas of capacity, security, and disaster recovery.National Association of Securities Dealers, Inc.A significant portion of this article appeared in a paper prepared by the Division of Market Regulation of the U.S. Securities and Exchange Commission for the 1991 Annual Conference of the International Organization of Securities Commissions, Panel on Automated Trading, September 26, 1991.The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statements by any of its employees. The views expressed herein are those of the authors and do not necessarily reflect those of the Commission or the other members of the staff of the Commission.Mr. Adkins' contribution to this article occurred while he was a staff member of the Securities and Exchange Commission. The views expressed herein are those of Mr. Adkins only and do not necessarily reflect those of the Commission, the National Association of Securities Dealers, Inc., or members of the staffs of the Commission or the NASD.     

Bank Debt and Corporate Governance

In this paper, we investigate the disciplining role of banksand bank debt in the market for corporate control. We find thatrelationship bank lending intensity and bank client networkhave positive effects on the probability of a borrowing firmbecoming a target. This effect is enhanced in cases where thetarget and acquirer have a relationship with the same bank.Moreover, we utilize an experiment to show that the effectsof relationship bank lending intensity on takeover probabilityare not driven by endogeneity. Finally, we also investigatereasons motivating a bank's informational role in the marketfor corporate control.