The effectiveness of interest-rate futures contracts for hedging Japanese bonds of different credit quality and duration

This study investigates the effectiveness of the Tokyo Stock Exchange (TSE)-traded Japanese 10-year JGB futures contract to hedge portfolios of Japanese bonds of differing maturity and credit quality. The bond portfolios examined are Government, AAA-, and AA-rated Eurobonds with maturities of 2, 3, 5, 7, 10, and 20 years. Consistent with the recent literature, the study employs univariate methods for calculating hedge ratios based on levels, first differences, and percentage change of each series. Out-of-sample forecasting is used to determine the effectiveness of the calculated hedge ratios for each of the bond portfolios and to determine which approach to calculating hedge ratios is the most effective. The results show that this particular futures contract does provide a good hedge, particularly for those bond terms closest to the 10-year term of the contract. There is some evidence, although not strong, that JGBs are better hedged than AAA and AA bonds. Investors should take some caution when using this futures contract to hedge bond portfolios of different maturities and credit ratings.     

Valuation uncertainty,home and host market uncertainty,and cross-border seasoned equity offerings

This study examines how market timing can affect host market reaction to cross-border seasoned equity offerings (SEOs), an event generally viewed unfavorably by investors. We assume that firms engage in market timing in response to valuation uncertainty (VU), home market uncertainty (HMU) and/or host market uncertainty (HSU), and that raising capital abroad faces higher scrutiny costs and familiarity bias from host market investors. We conjecture that timing strategies provide signals that vary in strength to host market investors and that dual-timing strategies may strengthen an existing signal. Our hypotheses are tested on a sample of 190 cross-border SEOs that were issued on the U.S. stock market between 1990 and 2017 by firms from 29 countries. Using event study methodology, we find that market timing based on VU is negatively related to host market valuation and that a dual-timing strategy with HMU or HSU generally produces a stronger signal. Our results have practical relevance for stock markets that suffer from high uncertainty; we estimate that a high VU firm with a $1 billion valuation suffers a drop of $31.3 million in market valuation during a high host market uncertainty (high HSU) compared with low host market uncertainty (low HSU).     

Working Time Mismatch and Subjective Well-being

This study uses nationally representative panel survey data for Australia to identify the role played by mismatches between hours actually worked and working time preferences in contributing to reported levels of job and life satisfaction. Three main conclusions emerge. First, it is not the number of hours worked that matters for subjective well-being, but working time mismatch. Second, overemployment is a more serious problem than is underemployment. Third, while the magnitude of the impact of overemployment may seem small in absolute terms, relative to other variables, such as disability, the effect is quite large.     

Do Chinese corporations take their governance practices abroad? Evidence from Chinese mining subsidiaries in Australia

Directors of firms are theorized to fulfil control, service and resource dependence roles. However, the ways in which directors’ of Chinese MNCs govern their foreign subsidiaries, and perform these roles remains unclear. Building on the institutional logics perspective, this study explores the roles enacted by the boards of directors eight Chinese‐controlled companies in Australia to gain an appreciation of their governance practices. In depth semi‐structured interviews with insider and independent directors, consultants and market analysts were undertaken. A content analysis of company annual reports and web sites complimented primary sources of data on board functions. Findings reveal that control is the most dominant role played by these boards, rather than service or resource dependence. It also appears that the dominant logics of Chinese institutions influence the corporate governance of Chinese MNCs as they internationalize. These findings extend our understanding of corporate governance practices in China and abroad.     

Memorials to the victims of Nazism: the impact on tourists in Berlin

This qualitative study explores tourist responses to memorials to the victims of Nazism in Berlin and the impact they have on the tourist experience. The findings are located in the field of study known as dark tourism, of which visiting memorials is a part. The analysis shows that tourists increased their knowledge of the crimes committed by the Nazis, thus fulfilling the educational function of memorials. Tourists were also overwhelmed by their experience; they attested to feelings of sadness, shock, anger, despair and incomprehension. These feelings made it hard for them to resume the role of tourist after their exposure to a memorial. There was acknowledgement of the extent of commemoration practised in Germany.     

Old technology meets new technology: complementarities,similarities, and alliance formation

Alliance formation is commonplace in many high‐technology industries experiencing radical technological change, where established firms use alliances with new entrants to adapt to technological change, while new entrants benefit from the ability of established players to commercialize the new technology. Despite the prevalence of these alliances, we know little about how these firms choose to ally with specific firms given the range of possible partners they may choose from. This study explores factors that lead to alliance formation between pharmaceutical and biotechnology companies. We focus on the alliance tie as the unit of analysis and argue that dyadic complementarities and similarities directly influence alliance formation. We then introduce a contingency model in which the positive effect of complementarities and similarities on alliance formation is moderated by the age of the new technology firm. We draw theoretical attention to the intersection between levels of analysis, in particular, the intersection between dyadic and firm‐level constructs. We find that a pharmaceutical and a biotechnology firm are more likely to enter an alliance based on complementarities when the biotechnology firm is younger. Another noteworthy finding is that proxies for broad capabilities appear to be at least as effective, if not more so, in predicting alliance formation compared to fine‐grained science and technology‐related indicators, like patent cross‐citations or patent common citations. We conclude by suggesting that future studies on alliance formation need to take into account interactions across levels; for example, how dyadic capabilities interact with firm‐level factors, and the advantages and disadvantages of more or less fine‐grained measures of organizational capabilities. Copyright © 2007 John Wiley & Sons, Ltd.     

Effect of internal cost management,information systems integration,and absorptive capacity on inter-organizational cost management in supply chains

Inter-organizational cost management is a strategic cost management approach to managing costs that span organizational boundaries in supply chains. Drawing on the resource-based view of the firm, we develop a model to predict which inter-related resources might enable companies to manage inter-organizational costs. We test this model using a survey of managerial accountants whose organizations are part of a supply chain. Using structural equation modeling, we conclude that the resources of internal electronic integration, external electronic integration, internal cost management, and absorptive capacity play significant direct and indirect roles in the development of an inter-organizational cost management (IOCM) resource. We find that these resources are inter-related and together are useful in enabling companies to ultimately benefit from managing inter-organizational costs. We find in particular the importance of relational resources associated with absorptive capacity in the development of an IOCM resource. Our research contributes to theory and practice by explaining how specific resources can be combined in allowing companies to better manage inter-organizational costs.     

How much does tax erode fund excess returns?

We model the tax drag from active fund management based on reported monthly holdings of active equity funds. Tax drag erodes 65 percent of the 0.74 percent excess return in Broad Market funds, but only 21 percent of the 1.80 percent excess return in Small-Cap funds for Australian superannuation (pension) fund investors. Tax drag varies with investment style; market state, which is most detrimental during bull markets; and fund turnover. For high-income individual investors, tax drag is exacerbated to the extent that active management only generates meaningful after-tax excess return for Small-Cap funds of certain styles.     

MRO parts service in the machine tool industry

This article examines the post purchase Parts servicing of Machine Tools. Survey results outline the policies and criteria that influence the degree to which replacement parts will be provided for old machines. The survey indicates that the policies of some American manufacturers leave service gaps that can be exploited by foreign as well as domestic competitors.