Does it pay to have friends? Social ties and executive appointments in banking

We exploit a unique sample to analyze how homophily (affinity for similar others) and social ties affect career outcomes in banking. We test if these factors increase the probability that the appointee to an executive board is an outsider without previous employment at the bank compared to being an insider. Homophily based on age and gender increase the chances of the outsider appointments. Similar educational backgrounds, in contrast, reduce the chance that the appointee is an outsider. Greater social ties also increase the probability of an outside appointment. Results from a duration model show that larger age differences shorten tenure significantly, whereas gender similarities barely affect tenure. Differences in educational backgrounds affect tenure differently across the banking sectors. Maintaining more contacts to the executive board reduces tenure. We also find weak evidence that social ties are associated with reduced profitability, consistent with cronyism in banking.     

Market volatility and the dynamic hedging of multi-commodity price risk

Commodity cash and futures prices experienced a severe boom-and-bust cycle between 2006 and 2009. Increases in commodity price volatility have raised concerns about the usefulness of commodity futures and options as risk management tools. Dynamic hedging strategies have the potential to improve risk management when conditional (co)variances depart significantly from their unconditional, long-run counterparts and may be useful to decision-makers despite their greater complexity and higher transaction costs. We propose a Nonparametric Copula-based Generalized Autoregressive Conditional Heteroscedastic (NPC-GARCH) approach to estimate time-varying hedge ratios, and evaluate the benefits of dynamic hedging during four sub-periods between 2000 and 2011 using a stylized Texas cattle feedlot management problem. The NPC-GARCH approach allows for a flexible, nonlinear and asymmetric dependence structure between cash and futures prices for different commodities. We find that NPC-GARCH dynamic hedging performs better than either static, GARCH-Dynamic Conditional Correlation (DCC) or GARCH-Baba, Engle, Kraft and Kroner (BEKK) hedging in terms of lower tail risk (expected shortfall), but that there is no significant difference between hedging approaches in terms of portfolio variance reduction.     

In defence of the institutional revolution

I defend my thesis laid out in The Institutional Revolution against the comments made by McCloskey, Espin and Mokyr, and Langlois, who all believe that the weight of the great institutional transition is too great for my theory of measurement, and who all quibble with some aspects of my historical analysis. I argue that some of the comments fail to fully appreciate the Coasean approach, and that most of the historical comments miss the mark. I begin with a short discussion of Coase, and then turn to each author in turn.     

The ancient olympics as a signal of city-state strength

Ancient Greece was wealthy enough to invent many of the foundations of Western Civilization. In order to accomplish this, they had to avoid the trap of dissipating wealth through continuous feuding. We contend that the ancient Olympics was one, of several, institutions that helped achieve this by acting as a signal of city-state strength. Although it could not prevent all battles, it provided information to reduce hostilities between competing cities. This hypothesis explains the rise and fall of the Olympics, and the unique and puzzling characteristics of the rules and events.     

The Urban Unbound: London's Politics and the 2012 Olympic Games

Global events such as London's 2012 Olympic Games raise questions about the ways in which embedded political arrangements take their shape from relationships that stretch across and beyond urban boundaries. In this article, the urban politics that we wish to capture is not one that is merely located in the city, but rather one that has to constantly take into account the mediated demands folded (as it were) into the urban arena. In the first part of the article, the corporate politics of an Olympic‐related urban regeneration are outlined and then considered, first as a staged setting for interaction, a kind of placeless political engagement, and then as a more embedded spatial politics that takes into account the leverage of networked groups acting within and beyond the city. Following that, we explore the politics of regeneration when campaign groups and alternative coalitions of interest raise their own political demands by drawing on references outside of their immediate urban area and attempt to steer political dialogue in ways that extend the reach of urban politics. The urban politics at stake in this context, we argue, appears to work more through topology than a series of mapped connections; through actors registering their presence in ways that often dissolve the tension between inside and outside rather than define it in terms of separate political spaces.     

Canadian city housing prices and urban market segmentation

Abstract .  This paper provides a detailed empirical analysis of Canadian city housing prices. We examine the long-run relationship between city house prices in Canada from 1985 to 2005 as well as idiosyncratic relations between city prices and city-specific variables. The results suggest that city house prices are only weakly correlated in the long run and that there is a disconnect between house prices and interest rates. City-specific variables such as union wage levels and the issuance of building permits tend to be positively related to existing city house prices. Surprisingly, there is mixed evidence with respect to standard measures of economic activity such as per capita GDP and interest rates.     

Trade hnpact Analysis on the ASEAN-China Trade in Goods Agreement

Background
ASEAN and China signed the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation which entered into force on 1 July 2003. Under the Early Harvest Programme of this agreement covering products in Chapters 1-8 of the Customs Harmonised System as well as a limited number of products outside these Chapters, tariffs on all these products will be eliminated over a period of three years beginning 1 January 2004. A longer time-frame has been accorded to Cambodia, Laos, Myanmar and Viet Nam, i.e. no later than January 2010.     

The Great Divergence in European Wages and Prices from the Middle Ages to the First World War

This paper traces the history of prices and wages in European cities from the fourteenth century to the First World War. It is shown that the divergence in real incomes observed in the mid-nineteenth century was produced between 1500 and 1750 as incomes fell in most European cities but were maintained (not increased) in the economic leaders.     

Labour Markets in Professional Sports

Important elements of supply and demand are starkly observable in professional athletics. Demand affects how pay varies with personal productivity, racial discrimination, the nature of factor substitutions, and player mobility. Property rights affect the supply of athletic talent, arms races and incentives to restrict competition. In sports, excess incentives to win can create negative externalities. Collective agreements such as reverse-order drafts, payroll caps and revenue sharing constrain these forces, but redistribute rents from talented players to owners because they punish success. The European approach–promoting better-performing teams and relegating those with the poorest records–punish failure.     

Competitive viability in banking : Scale, scope, and product mix economies

Conventional scale and scope economies are inadequate to determine the competitive viability of banks that vary in scale and product mix simultaneously. This paper develops two new and more general measures of multi-product economies. Slight diseconomies of scale and product mix are found for banks, usually on the order of 1 to 3 percent, which may be due to demand-side influences. These are robust to differing cost and output specifications, organizational levels, and competitive environments. These results differ from other banking studies that found scope economies, a conflict that may be due to methodological difficulties.