Informational Costs and Institutional Typologies: A Review Article

Books reviewed in this article:
Mark Casson, Information and Organisation. A New Perspective on the Theory of the Firm
Takao Shiba and Masahiro Shimotani (eds), Beyond the Firm. Business Groups in International Historical Perspective     

Monthly Pattern and Portfolio Effect on Higher Moments of Stock Returns: Empirical Evidence from Hong Kong

Using a direct test, this paper studies the month-of-the-year effect on the higher moments of six industrial stock indices of the Hong Kong market. We also examine the portfolio effect on skewness and kurtosis across month of the year to see if such an anomaly exists. The empirical results support a weak month-of-the-year effect in higher moments of stock returns. Using a complete sample of all possible combinations for each portfolio size, we show that portfolio effect varies across month of the year for both skewness and kurtosis. In particular, our results show that diversification does not necessarily provide benefits to rational investors when the stock return distribution is non-normal, even though portfolio formation can reduce standard deviation. In June, August and October, diversification across industrial sectors results in a more negatively skewed and leptokurtic return distribution, which is not preferred by investors with risk-aversion. Two (one) possible explanations for the portfolio effect on skewness (kurtosis) are also provided. Our empirical results add new evidence to the existence of anomalies in the Hong Kong stock market. This revised version was published online in August 2006 with corrections to the Cover Date.     

How well does a national newspaper reporting system profile drowning?

In Finland, the Finnish Association for Swimming Instruction and Life Saving (SUH) and Statistics Finland (SF) both provide nationwide data on unintentional drowning. The SUH database relies on rapid reporting from a newspaper clipping service and additional local police information, whereas the SF database relies on the later release of the death certificate information, which is based on extensive medico-legal investigation. The aim of the study was to explore the main differences between the SUH and SF databases for drowning and to evaluate the capacity of the former to characterize drowning events in Finland from 1998 to 2000. Computerized files of death certificates tabulated by SF were linked with the SUH database by deterministic methods. SF and SUH databases allowed the identification of 704 and 567 unintentional drownings, respectively, giving an unintentional drowning rate of 4.5 and 3.6/100?000 per year. Of the 704 drownings described by SF, 418 (59.4%) were also found in the SUH database. The SUH database markedly underreported drowning fatalities in certain settings, such as bath, ditch and swimming pool drownings; fall- and land-traffic-related drownings; and drownings occurring in South Finland. The narrative text of SUH drownings contributed limited information to characterize the drowning events. It was concluded that the newspaper-based SUH data provide more timely data on individual drownings but are not representative of all drownings. Conversely, the SF vital statistics data are more accurate but may take up to 2 years to become available. Both SUH and SF data provide little detailed information on drowning events. A multidisciplinary national surveillance system for drowning is necessary to provide more accurate and timely drowning data, analyse risk factors and design follow-up studies for developing and monitoring prevention strategies.     

How Would an Appreciation of the Renminbi and Other East Asian Currencies Affect China's Exports?

China's global current account surplus equaled 9% of Chinese GDP in 2006 and 11% of GDP in 2007. Many argue that a renminbi appreciation would help to rebalance China's trade. Using a panel dataset including China's exports to 33 countries we find that a 10% renminbi (RMB) appreciation would reduce ordinary exports by 12% and processed exports by less than 4%. A 10% appreciation of all other East Asian currencies would reduce processed exports by 6%. A 10% appreciation throughout the region would reduce processed exports by 10%. Since ordinary exports tend to be simple, labor-intensive goods while processed exports are sophisticated, capital-intensive goods, a generalized appreciation in East Asia would generate more expenditure-switching towards US and European goods and contribute more to resolving global imbalances than an appreciation of the RMB or of other Asian currencies alone.     

Employee Participation in Cause-Related Marketing Strategies: A Study of Management Perceptions from British Consumer Service Industries

The purpose of cause-related marketing (CRM) is to publicise and capitalise on a firm??s corporate social performance (CSP) by enhancing its legitimacy in the eyes of its stakeholders. This study focuses on the firm??s internal stakeholders ?C i.e. its employees ?C and the extent of their involvement in the selection of social campaigns. Whilst the difficulties of managing a firm that has lost or damaged its legitimacy in the eyes of its employees are well known, little is understood about the extent to which managers and their social partners listen to and involve their employees in the legitimation process. Through telephone interviews with non-profit organisations and senior managers of service sector firms, the extent of employee involvement in CRM campaigns and the perceived benefits of doing so are investigated.?Amongst other things, we find that (i) the extent of employee participation varies significantly across firms; (ii) larger CRM campaigns tend to be managed centrally with relatively less employee participation than smaller ones and (iii) financial services firms are more likely to make CRM decisions centrally, with relatively less employee participation than retail services firms.     

RENT-SEEKING: VALUING TULLOCK'S REJECTS

This paper demonstrates that Gordon Tullock's articles on rent seeking continue to be cited, often far more frequently than the papers which journals chose to publish when they rejected Tullock's submissions.     

INTERNATIONAL COMPARISONS OF EARNINGS INEQUALITY FOR MEN IN THE 1980s

In this paper we present a comparative analysis of earnings inequality during the 1980s among prime age men who headed households and worked year-round, full-time from five industrialized countries-Canada, Sweden, Australia, West Germany, and the United States. The data were obtained from the Luxembourg Income Study (LIS) database, a multinational collection of microdata sets from various countries which have been assembled for the primary purpose of making cross-national comparisons of economic and social well-being. The results of the comparison indicated that during the mid-1980s, the United States had the most unequal distribution of earnings and Sweden the least unequal. Between the early 1980s and mid-1980s, however, the earnings distributions in all five countries showed evidence of becoming more unequal, especially in the United States, Canada, and Sweden.