Adverse Selection and the Opaqueness of Insurers

While adverse selection problems between insureds and insurers are well known to insurance researchers, few explore adverse selection in the insurance industry from a capital markets perspective. This study examines adverse selection in the quoted prices of insurers' common stocks with a particular focus on the opacity of both asset portfolios and underwriting liabilities. We find that more opaque underwriting lines result in greater adverse selection costs for property-casualty (P-C) insurers. A similar effect is not apparent for life-health (L-H) insurers and we find no effect of asset opaqueness on adverse selection for either L-H or P-C insurers.     

An economic analysis of the impacts of trade liberalization on Asian dairy market

This paper develops an economic analysis of the impacts of further trade liberalization scenarios on Asian dairy markets, using a world dairy model incorporating both vertical and spatial characteristics of the world dairy sector. Japan and Korea’ producers will suffer much bigger losses from trade liberalization than other countries in the region; Japan and Korea’s producers get much more protection from trade distortions than from domestic subsidy. India is a potential competitive exporter if Asia is liberalized. China and India are potential competitive exporters under global free trade. South East Asia and other South Asian countries remain importers under free trade. Greater trade liberalization around the world increases exports for potential exporters and/or ease importing pressure for potential importers. The increasing order of competitiveness of Asian dairy economies sectors is found to be Japan, Korea, South East Asia, other South Asia, China and India. China and India consumers would lose from world trade liberalization, but the other countries’ consumer surplus will increase.     

Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project

This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders’ demands for increased public reporting about climate change-related risks. We rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm’s carbon footprint. Based on a sample of publicly listed Canadian firms over the period 2008–2014, we find that the likelihood of voluntary climate change disclosure increases with women percentage on boards. We also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.     

Student learning profiles in two innovative honours degree engineering programmes

This paper reports a study of innovative and traditional engineering programmes at the University of Salford, UK Attention is given to student entry, and to course evaluation and improvement. Using the Myers-Brigg Type Inventory (MBTI) and the Technical Students' Learning Environment Preferences questionnaire (TSLEP), data were obtained about personality type and student developmental level. In addition, a selected group of the students were interviewed to measure their cognitive levels as defined by Perry's model of intellectual and ethical development, and to assist in the validation of the TSLEP questionnaire. Application of the TSLEP and the MBTI instruments to engineering students at North Carolina State University and the State University of New York at Brighamton generated further data which are used to make US/UK comparisons and to suggest ways in which the scope of engineering education might be expanded to meet the needs of an increasingly diverse student body.     

Does Economic Development Lead to Mangrove Loss? A Cross‐Country Analysis

Mangroves line one quarter of the world's tropical coastlines, and approximately 117 countries and territories have mangrove resources within their borders. Although over recent years mangrove deforestation has occurred at a phenomenal rate worldwide, there have been few economic studies of the underlying causes. The article attempts such an analysis and particularly examines the role of economic development, with specific reference to those activities that may result in mangrove deforestation, in determining the area of mangrove left within a country. The article develops a model of economic activity and mangrove conversion. From this model, a relationship is established between remaining mangrove area, economic activity, and other important causative factors. The mangrove area relationship is estimated empirically for a cross-section of 89 countries. Results show that shrimp aquaculture and agriculture are significantly associated with mangrove loss across all countries, whereas the higher the level of GDP per capita the more mangrove area remains. The number of protected areas, length of coastline and political stability were also important in determining the remaining mangrove area of a country. (JEL O13 , Q22 , Q23 , Q24 )     

Play It Again,Sam? Versioning in the Market for Second‐hand Video Game Software

Information goods are characterised by high fixed costs and low marginal costs of production. A potentially effective strategy that can be adopted by firms operating in such markets is versioning, whereby various features are added or subtracted from a number of distinct versions of the good. This effectively serves as a means of second‐degree price discrimination designed to extract prices closer to the maximum willingness to pay from different groups of consumers. This study tests the effectiveness of versioning as a means of exploiting differences in willingness to pay in second‐hand markets for information goods by undertaking the first hedonic price analysis of video gaming software. The empirical evidence presented in this paper is based on the analysis of an extensive cross‐sectional dataset consisting of over 5000 observations of pre‐owned video game prices in the USA. Controls are introduced for a variety of other observable characteristics, including the quality of the game‐play experience, the publisher, genre and theme of the game. The results are consistent with theoretical expectations and demonstrate that significant variations in willingness to pay can be exploited through the strategic use of versioning. The practice is therefore argued to represent an effective means by which firms in these markets can enhance revenues. Copyright © 2016 John Wiley & Sons, Ltd.     

Tax loss selling and the contrarian investment strategy

Tax loss selling is examined as a possible explanation for the long term price reversal patterns associated with the contrarian investment strategy. Our empirical results are consistent with a tax effect. When we adjust for size and potential tax loss selling, the abnormally high returns previously found in January are eliminated. These results suggest that short term tax effects are associated with the longer term overreaction or contrarian hypothesis, and at this point cannot be dismissed.