Potential performance and tests of portfolio efficiency

The potential performance of an asset set may be obtained by choosing the portfolio proportions to maximize the Sharpe (1966) performance measure. If a portfolio has a Sharpe measure equivalent to the potential performance of the underlying set of assets, then it is efficient. Multivariate statistical procedures for comparing potential performance and testing portfolio efficiency are developed and then evaluated using simulations. Two likelihood ratio statistics are then used to compare stock and bond indices against sets of 20 and 40 portfolios. The procedures are also compared to the Gibbons (1982) methodology for testing financial models.     

Predicting mispricing of initial public offerings

This article investigates the ability of neural network models to predict mispricing of initial public offerings (IPOs). The aim is to improve the modest explanatory power of existing models that are based on the theory of asymmetrically informed economic agents surrounding post‐issue market value of IPOs. This study develops and compares linear regression and neural network models. The results show that modelling variable interactions and non‐linearity allows a potentially fruitful approach for stagging in IPOs. Neural networks have been criticized for being a black box; however, this paper shows that, by using sensitivity analysis, neural networks can provide a reasonable explanation of their predictive behaviour and direction of association between variables. Copyright © 2005 John Wiley & Sons, Ltd.     

Spatial patterns of poverty in Vietnam and their implications for policy

This study examines the geographic distribution of poverty in Vietnam by applying small area estimation methods to household budget data and population census data. The resulting district-level poverty estimates suggest that the incidence of poverty is highest in the remote northern and central highlands and lowest in the south-east and in large urban centres. However, mapping the density of poverty reveals that most poor people do not live in the poorest districts but in the two lowland deltas, where poverty incidence is intermediate. The policy implications of these findings present an important trade-off between targeting poor areas and poor people that can only be resolved with better information on the relative costs of delivering different programmes and their expected impact. Existing government estimates of poverty at the district level are not closely correlated with our poverty estimates, perhaps because of regional variation in their methods of collecting poverty data.     

Business Rescue in Insolvency Law in Europe: Introducing the ELI Business Rescue Report

In a European study, written under the auspices of the European Law Institute, the authors have designed elements of a legal framework that will enable the further development of coherent and functional rules for business rescue in Europe. Based on the recommendations of international organisations, such as UNCITRAL and the World Bank, as well as the insolvency laws of EU Member States, comparative research has led to a lengthy report of 10 chapters and more than 100 recommendations which are described in this article. They range from the need for professional and honest parties involved in the process (insolvency practitioners, turnaround managers, courts and company directors) to the evaluation of specific tools (such as a stay on enforcement actions of creditors and forms of available finance) and procedural safeguards to enable serious rescue efforts of viable businesses, while protecting justified interests. Copyright © 2018 INSOL International and John Wiley & Sons, Ltd.     

Democratization and Real Exchange Rates,

In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference‐in‐difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.     

Unemployment Duration and Inflows onto the Disability Support Pension Program: Evidence from FaCS LDS Data

From the administrative data of the Australian Department of Family and Community Services it is found that a large proportion of Disability Support Pension (DSP) recipients transferred from unemployment benefits. Among those who transferred to DSP from unemployment benefits, a large proportion experienced multiple spells of income support receipt prior to the transition and a majority had more than a half‐year pre‐transition unemployment duration, with the average pre‐transition unemployment duration being more than one year. These findings suggest that the unemployment benefit is not simply a‘hold‐on’ benefit for those who experienced the unemployment—DSP transition. This article further examines what factors are associated with the transition. It is found that, among other things, the probability of transition to DSP from unemployment increases with duration on unemployment benefits.     

Using tracking technology to improve marketing: insights from a historic town in Tasmania,Australia

ABSTRACT

This study examines the movement patterns of different market segments in an historic town. It combines traditional visitor surveys with a bespoke tourist tracking application. Two analytical stages were undertaken. The first involved analyzing the movements of tourist segments and revealed that “heritage” tourists tended to visit for the shortest lengths of time. The second phase revealed that a visit of between one and two hours seemed to provide the best opportunity to explore the village fully, while shorter and longer stays did not. The insights challenge traditional notions that heritage-oriented tourists should form the target market for historic communities.     

Hypothetical extractions from a global perspective

ABSTRACT

The hypothetical extraction method (HEM) has been widely used to measure interindustry linkages and the importance of industries. HEM considers the hypothetical situation in which a certain industry is no longer operational. HEM was developed for national economies, using national input–output tables. When performing HEM, it is assumed (often implicitly) that the input requirements that were originally provided by the extracted industry are met by additional imports in the post-extraction situation. Applying HEM to global multiregional input–output tables then causes serious problems. It is no longer sufficient to assume that the required inputs are imported. Instead, it is necessary to indicate explicitly how much is imported from each origin to replace the original inputs. Our adaptation of HEM is the global extraction method (GEM). As an illustration, GEM is applied to the extraction of the motor vehicle industry in China, the US, and Germany, using the 2014 WIOD input–output table.     

Reviews

“URBAN ECONOMIC CHANGE” Victor A. Hausner and members of the ESRC Inner Cities Research Programme, 1987: Urban Economic Change: Five City Studies. Clarendon Press, Oxford, £25.00.

“ECONOMIC DEVELOPMENT POLICY” Robinson, F., Wren, C. and Goddard, J., 1987: Economic Development Policies-An Evaluative Study of the Newcastle Metropolitan Region. Oxford: Clarendon Press, £8.95 paper.

'URBAN REGENERATION ISSUES” London Strategic Policy Unit, 1987: Land for Industry: The need for industrial land in London until 1990. London: LSPU, no price stated.

Department of the Environment, 1987: Re-using Redundant Buildings: Case Studies of Good Practice in Urban Regeneration. HMSO £11.95.

Department of the Environment, 1987: Managing Workspaces: Case Studies of Good Practice in Urban Regeneration. HMSO £11.95.

Department of the Environment, 1987: Greening Crty Sites: Case Studies in Good Practice in Urban Re-generation. HMSO £11.95.

“VIEWS FROM THE DISTRICTS” Association of District Councils, 1987: A Blueprint for Urban Areas, Volumes 1 and 2. London: £12.00.

Association of District Councils, 1987: Economic Development Initiatives and Innovations: Best Practice Paper No. 6 (Revised). London: £4.00.