The U.S.-China Exchange Rate Debate: Using Currency Offer Curves

The paper introduces an innovative graph for presenting bilateral exchange rates. The currency quantities are on the axes and the exchange rate is the ratio between them, i.e., the slope of a ray from the origin. Behavior is captured by currency offer curves. The paper uses the model to address the issues surrounding China’s export-led growth strategy, i.e., its policy of undervaluing the yuan.     

Jackson,Karl D., (Ed.), Asian Contagion: The Causes and Consequences of a Financial Crisis

The purpose of this article is to identify the extent of inward and outward foreign direct investment (FDI) worldwide. A large number of countries were aggregated on a regional basis to examine their inward and outward stocks as a percentage of gross fixed capital formation for the period 1980–2006. Among the findings was that the annual increase for both inward and outward FDI was less than 1%. Also, countries grouped by the aggregates developed, Africa, Latin America and Caribbean, Asia and Oceania, and developing were found to differ significantly in their means.     

The Effects of Ambiguous Information on Initial and Subsequent IPO Returns

Newly public companies must disclose significant risk factors in the offering prospectus. These disclosures are examples of “soft” or ambiguous information. Ambiguity models predict that investors will alter their portfolio weights and react to subsequent signals about such information. We test for these effects in a sample of 1,398 initial public offerings (IPOs) using word count ratios between soft and hard information as measures of ambiguity. We find a significant relationship between the soft information on risk and both initial and ex post measures of returns. These results support the view that soft information embeds ambiguity and that it influences investors’ portfolio choices.     

The impact of off-balance-sheet activities on banks returns: An application of the ARCH-M to Canadian data

This paper revisits the impact of off-balance-sheet (OBS) activities on banks risk-return trade-off. Recent studies (e.g., Stiroh and Rumble, 2006) show that increasing OBS activities does not necessarily yield straightforward diversification benefits for banks. However, introducing a risk premium in the standard banks returns models, and resorting to an ARCH-M procedure, Canadian data suggest that banks risk-return trade-off displays a structural break around 1997. In the second subperiod of our sample (1997–2007), we find that the noninterest income generated by OBS activities no longer impacts banks returns negatively. While during the first period (1988–1996) the volatility variable is not significant in any returns equations, a risk premium eventually emerges, pricing the risk associated to OBS activities.     

Valuing traceability of imported beef in Korea: an experimental auction approach*

The major objective of this study is to estimate Korean food shoppers’ willingness to pay (WTP) for imported beef with traceability. We use an experimental elicitation method, the random nth price auction, to identify consumers’ valuation for traceable imported beef. We also analyse the effect of different types of information on these valuations. Results indicate that consumers are generally willing to pay a 39 per cent premium for the traceable imported beef over similar beef without traceability. Results also suggest that in contrast to the insignificant effect of positive information, negative and two‐sided information about traceability significantly reduces WTP.     

Tourism experiences,visitability and heritage resources in Saint Louis,Senegal

This paper studies heritage tourism experiences in the postcolonial World Heritage Site of Saint Louis, Senegal. Based on fieldwork and archival research, it shows the complexity and discrepancy linked with heritage presentation and design from the experiential realities encountered on the ground. The argument put forward is that colonial heritage, although it is simplified and controlled to meet specific tourist expectations by official authorities, appears to be dynamic, performative and subject to multiple interpretations from visitors, tourist guides and local residents. It further suggests that social and economic conditions of the communities living in the site affect the heritage space and shape vicariously or directly tourists’ experiences, despite professionals’ efforts of keeping the heritage visible in certain ways. The article extends its discussion to adjacent topics of power and gender issues, demonstrating how heritage tourism in postcolonial African context is intimately intertwined with the changing everyday realities of the communities.     

How risk influences the choice of governance mode in biopharmaceutical inter-firm relationships

This paper proposes a new theoretical framework for assessing the influence of risk in shaping the governance form in biopharmaceutical inter-firm relationships. In particular, we propose a multidimensional operationalization of relational and performance risk and, by following Transaction Cost Economics (TCE) and Real Options (RO) theory constructs, we hypothesize a relation between the aforementioned risk components and the choice of governance form. Specifically, following TCE reasoning, we hypothesize that a high level of relational risk leads towards more hierarchical governance forms, while, following RO theory, we hypothesize that a high level of performance risk leads toward market-oriented governance forms; finally, we hypothesize a moderating effect of each risk component on the other. We empirically test our framework through the analysis of 353 inter-firm relationships signed worldwide between pharmaceutical and biotech companies from 2007 to 2010. The results show substantive support for our theoretical framework. Furthermore, we find a significant moderating effect of the performance risk on the TCE relation between relational risk and governance forms.     

When are contrarian profits due to stock market overreaction?

If returns on some stocks systematically lead or lag those ofothers, a portfolio strategy that sells 'winners' and buys 'losers'can produce positive expected returns, even if no stock's returnsare negatively autocorrelated as virtually all models of overreactionimply. Using a particular contrarian strategy we show that,despite negative autocorrelation in individual stock returns,weekly portfolio returns are strongly positively autocorrelatedand are the result of important cross-auto-correlations. Wefind that the returns of large stocks lead those of smallerstocks, and we present evidence against overreaction as theonly source of contrarian profits.