The Gates Hillman prediction market

The Gates Hillman prediction market (GHPM) was an internet prediction market designed to predict the opening day of the Gates and Hillman Centers, the new computer science complex at Carnegie Mellon University. Unlike a traditional continuous double auction format, the GHPM was mediated by an automated market maker, a central agent responsible for pricing transactions with traders over the possible opening days. The GHPM’s event partition was, at the time, the largest ever elicited in any prediction market by an order of magnitude, and dealing with the market’s size required new advances, including a novel span-based elicitation interface that simplified interactions with the market maker. We use the large set of identity-linked trades generated by the GHPM to examine issues of trader performance and market microstructure, including how the market both reacted to and anticipated official news releases about the building’s opening day.     

Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations

Sustainability is concerned with the impact of present actions on the ecosystems, societies, and environments of the future. Such concerns should be reflected in the strategic planning of sustainable corporations. Strategic intentions of this nature are operationalized through the adoption of a long-term focus and a more inclusive set of responsibilities focusing on ethical practices, employees, environment, and customers. A central hypothesis, that we test in this paper is that companies which attend to this set of responsibilities under the term superior sustainable practices, have higher financial performance compared to those that do not engage in such practices. The target population of this study consists of the top 100 sustainable global companies in 2008 which have been selected from a universe of 3,000 firms from the developed countries and emerging markets. We find significant higher mean sales growth, return on assets, profit before taxation, and cash flows from operations in some activity sectors of the sample companies compared to the control companies over the period of 2006–2010. Furthermore, our findings show that the higher financial performance of sustainable companies has increased and been sustained over the sample. Notwithstanding sample limitation, causal evidence reported in this paper suggests that, there is bi-directional relationship between corporate social responsibilities practices and corporate financial performance.     

The Determinants of Target Returns in European Bank Mergers

Announcement period abnormal returns for target banks are generally considered low compared to non-bank mergers. In this paper the factors that influence those returns in European bank mergers is examined. Sixty-seven deals from the EU, Norway and Switzerland are studied for which both targets and acquirers were listed companies (some of these being cross-border mergers and acquisitions), and find that European cross-border acquisitions tend to generate higher returns than national acquisitions. Cash deals and deals that are settled by a mix of cash, equity and loan notes create higher returns than equity transactions. It was also found that the target profitability and the relative asset growth rate have significant positive relation with the stock return. In addition, the significance of loan quality, the relative cost to income ratio and the ratio of loans to deposits, all point to the importance of efficiency in the European financial services industry.     

Impact of selected policy and market factors upon student flows from high school to competing destinations

The impact of selected policy and market factors upon high-school leavers' decisions regarding three competing alternatives—labor-force entry, university education, non-university education—is examined using Ontario data on grade 13 students covering 1965–1978.The specific policy and market factors selected include tuition fees, student-aid, family income, graduates' wages, youth unemployment. Based upon economic-related theories of investor and consumer behaviour, predictions regarding how these factors influence students' choices are presented. Empirical tests of these predictions are then obtained by computing transition-rate elasticities estimated from a multinomial logistic model using maximum-likelihood techniques.The results suggest that both policy and market factors influence students' choices on the margin, and therefore exercise control over the flows from high-school to various competing destinations. The implications of these results are examined for policy-making and planning at the post-secondary level.     

DO MIGRANTS REACT TO INFRASTRUCTURE DIFFERENCE BETWEEN URBAN AND RURAL AREAS? DEVELOPMENT OF AN EXTENDED HARRIS–TODARO MODEL

Developing an extended model of the basic Harris–Todaro model of rural–urban migration, we analyze the effects of infrastructure availability together with time-tested income effects while accommodating government behavior through the provision and financing of infrastructure. Our theoretical analysis confirms that infrastructure presence can be a significant factor in making migration decisions. Comparison with the basic Harris–Todaro model also reveals that while the Todaro paradox is absent in the basic model, it can be present in the extended model.     

FACTORS INFLUENCING CHOICE OF DISCIPLINE OF STUDY — ACCOUNTANCY,ENGINEERING, LAW AND MEDICINE

This paper examines the factors which influence high calibre students in their choice of a professional discipline of study. Using a questionnaire approach students were requested to determine the relative importance of eleven factors in their choice of discipline of study. Results showed that accountancy students appeared most concerned with job satisfaction, earnings potential, availability of employment, aptitude for subject and years of formal education, and to have a different, and more distinctive, profile than that of other students. These results may have important implications for recruitment into the profession.     

Malaysia’s current account deficits: an intertemporal optimization perspective

The study examines the account imbalances in Malaysia during the past four decades. Using Sachs’s (National Bureau of Economic Research, Working Paper No. 859, 1982) intertemporal model, we address the issue of external solvency by measuring the deviation of actual from the optimal path of the current account balance. All in all, we found that the actual path moves reasonably close to the estimated consumption-smooth currents accounts, suggesting that the current account balances satisfy the external solvency condition. The major findings from the empirical application of the model revealed the following: (i) the deficits of the 1990s prior to 1997 financial crisis were sustainable; (ii) the evidence appears to suggest that the current account balance broadly follows the same pattern of the intertemporal model and hence suggests that capital is mobile; (iii) the large surpluses observed during the post-1997 period significantly deviate from the optimal path, implying that consumption is unsustainable and is expected to fall in the near future and; (iv) there is excessive volatility in international capital movements for consumption-smoothing purpose.      

Monetary and fiscal policy interactions: Evidence from emerging European economies

This paper examines the interactions between fiscal and monetary policy for some former transition, emerging European economies over the 1995Q1–2010Q4 period by using a Markov regime-switching model. We consider the monetary policy rule proposed by Taylor (1993) and the fiscal policy rule suggested by Davig and Leeper (2007) in accounting for monetary and fiscal policy interactions. Empirical results suggest that monetary and fiscal policy rules exhibit switching properties between active and passive regimes and all countries followed both active and passive monetary policies. As for fiscal policy, the Czech Republic, Estonia, Hungary, and Slovenia seem to have alternated between active and passive fiscal regimes while fiscal policies of Poland and the Slovak Republic can be characterized by a single fiscal regime. Although the policy mix and the interactions between monetary and fiscal policy point a diverse picture in our sample countries, the monetary policy seems to be passive in all countries after 2000. This finding is consistent with the constraints imposed by European Union enlargement on monetary policy.     

The way out of recessions: A forecasting analysis for some Euro area countries

This paper proposes a two-regime Bounce-Back Function augmented Self-Exciting Threshold AutoRegression (SETAR) model which allows for various shapes of recoveries from the recession regime. It relies on the bounce-back effects which were first analyzed in a Markov-Switching setup by Kim, Morley, and Piger (2005), and were recently extended by Bec, Bouabdallah, and Ferrara (2011). This approach is then applied to the post-1973 quarterly growth rates of French, German, Italian, Spanish and Euro area real GDPs. Both the linear autoregression and the standard SETAR without the bounce-back effect null hypotheses are strongly rejected against the Bounce-Back augmented SETAR alternative in all cases but Italy. The relevance of our proposed model is further assessed by a comparison of its short-term forecasting performances with those obtained from a linear autoregression and a standard SETAR. It turns out that the bounce-back model’s one-step-ahead forecasts generally outperform the other ones, particularly during the last recovery period in 2009Q3–2010Q4.