Are government-linked IPOs underpriced? A three country privatization effort comparison

Underpricing in the case of the initial public offerings of private (non-government) firms has been well documented. However, there does not appear to be any systematic study of the price performance of “government-linked” companies or GLCs, which have been “privatized” through public offerings in the stock market. This study examines the hypothesis that the initial public offerings (IPOs) of such companies in the United Kingdom, Singapore, and Malaysia will not only be underpriced, but their degree of underpricing will be relatively greater when compared to firms with no governmental links. The results provide strong support for this hypothesis.     

A fractionally integrated exponential STAR model applied to the US real effective exchange rate

The aim of this paper is to study the dynamics of the US real effective exchange rate by capturing non-linearity and long-memory features. In this context, we use the family of fractionally integrated STAR (FISTAR) models proposed by van Dijk et al. (van Dijk, D., Franses, P.H., and Paap, R., 2002. A non-linear longmemory model with an application to US unemployment. Journal of Econometrics 110, 135–165.) in the case when the transition function is an exponential function and we develop an estimation procedure. Indeed, these models can take into account processes characterized by several distinct dynamic regimes and persistence phenomena.     

Service Sector Restrictiveness and Economic Performance: An Estimation for the MENA Region

This article aims to assess barriers to service provision in the banking and telecom sectors of four Middle East and North Africa (MENA) countries, and the impact of these barriers on firm performance. Our methodology involves the computation of aggregate and modal trade restrictiveness indices (TRIs) by sector, and utilisation of these TRIs as regressors of firms’ economic performance. Our analysis shows that significant regulatory reforms have taken place in the service sectors over the last decade in the MENA region, but that a broad range of restrictions still remain. The most significant change in these service sectors has been the lifting or softening of constraints on foreign equity participation. These regulatory reforms, however, have had varying degrees of impact on market structure depending on the country, the sector and the mode. Moreover, service restrictions have had an impact on economic performance in the three studied sectors. While a rent‐creating effect seems to dominate restrictions on banking and fixed telecom sectors, a cost‐inefficiency effect seems to dominate the mobile telecom sector. Finally, we find evidence of interactions between modal restrictions for banking services. Our results suggest a complementarity between Modes 3 and 1, as well as a substitution effect between Modes 3 and 4 in the banking sector.     

An Investigation of Egyptian Consumers’ Attitudes Toward Ethical Issues in Advertising

This article investigates Egyptian consumers’ attitudes toward ethical issues in advertising held by a sample of 306 participants. The subjects completed a 20-item instrument originally designed to measure respondents’ attitudes toward controversial issues in advertising. The study validates the scale in an Arab non-Western context. The results revealed that Egyptian consumers have negative attitudes toward ethical issues in advertising. There are significant differences between males’ and females’ perceptions of ethics in advertising. Finally, the study detects a significant difference between Muslims and non-Muslims in Egypt regarding their attitudes toward ethical issues in advertising. These results lend strong support to the adaptation hypothesis and suggest that ads produced in one country cannot be standardized or directly translated for use in another, particularly if they are different culturally.     

Translation invariance when utility streams are infinite and unbounded

The translation‐invariance axiom consists in asserting the invariance of the ranking of two utility streams if one applies the same translation to both. This axiom is significant in the characterization of utilitarian criteria in finite dimension. This characterization is achieved thanks to the weak weighted utilitarianism theorem. The objective here is to extend this theorem to a space of infinite and unbounded utility streams. In the context of intergenerational choice, a consequence of the suggested generalization is that every maximal point with respect to a Paretian utilitarian order granting comparable considerations to the present and the future, is also a maximal point with respect to some future‐oriented criterion.     

Do corporations overinvest？ Evidence from Tunisia

The authors study the positive relationship existing between internal net worth and investment. This relationship has been interpreted in the financial literature as evidence showing that the management overinvests the free cash flow available to them in poorly-performing, sub-optimal investment projects. In this paper, the authors empirically tackle this problem in the case of the manufacturing and industrial Tunisian corporations and show that our empirical regularities do not stand for this interpretation. The authors conversely prove that overinvestment does not seem to occur on the basis of the grouping results. Hereby, there do not corroborate the empirical regularities documented in Lamont （1997）.     

The mediating role of employee strategic alignment in the relationship between rational strategic planning and firm performance: A European study

Previous empirical studies examining the direct relationship between rational strategic planning and firm performance have produced contradictory results. Therefore, in order to better understand the nature of this relationship, it is important to take into consideration the role of some mediating and moderating variables. We take into account this aspect by testing the mediating role of employee strategic alignment in the rational strategic planning–firm performance relationship. Based on a quantitative empirical study conducted among 372 European firms, we find that employee strategic alignment is a full mediator in this relationship. We then discuss the theoretical contributions and practical implications of our study. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.     

The Future of African Trade with China under Alternative Trade Liberalization Schemes

Abstract: Evidence is gradually being built up in Africa on the full extent and rapidly growing role and interest of China in Africa. The global trade integration under the Doha Round, which is considered as the channel for fostering outward‐oriented development and generates economic and social benefits, is expected to effect more African trade with China. Our results show that with an agreement for the Doha Round, China will achieve its dominance on global trade faster than in the baseline scenario where no agreement is expected to be signed. In the long term, this impressive growth in Chinese exports to Africa is not a real value added, as China is already taking the place of the other major trade players both in African markets as well as in the markets of other regions and countries. In other words, China is expected to achieve in 10 years (2010–2020) what initially was expected to be achieved in 20 years in case of no agreement under the Doha Round, where a simple linear estimation on the evolution of Chinese exports is carried out. Our results also show that even in the case where China will offer more market access for African countries, the situation will not improve much for most of them. The reason is that Africa is still suffering from small productive capacities and a low level of diversification of its economy.     

Strategies,technologies, and organizational learning for developing organizational innovativeness in emerging economies

Innovativeness is an important organizational capability for competitive advantage sustainability in the dynamic environment of Asia's emerging economies. Drawing upon dynamic capability theory, this study develops a research model of organizational innovativeness development for firms in emerging economies. The proactive strategic orientations reflected by entrepreneurship and technology oriented strategy provide important visions for organizational innovativeness. Further, the utilization of knowledge management systems and organizational learning are identified as intervention processes that translate these strategic orientations into real innovation capability. A survey involving 114 firms operating in China was conducted for hypothesis testing. The empirical results provide strong support and advance the knowledge of organizational innovativeness development for firms in Asia's emerging economies.