Foreign Direct Investment in China: An Examination of the Literature

Since 1978, when China announced its ‘open-door’ policy to pursue the country's long-term national goal, the Four Modernisations, more than 220,000 foreign funded ventures have been approved. By the end of 1994 some US$300 billion of contracted investment had been agreed and US$95 billion of utilized investment, making the country the most important recipient of foreign direct investment (FDI) in the developing world. This paper analyses the phenomenon of FDI in China. It examines the different forms and composition of FDI, reviewing its development since the early days of the ‘open-door’ policy and analysing its importance for Chinese domestic and export industries, as well as Western investor companies. Furthermore, the paper focuses on the world-wide sources of FDI in China and its distribution by both region and industry. Additionally, it reviews the existing research on FDI in China, emphasizing the investment mode of equity joint venture.     

The impact of stricter criteria for disability insurance on labor force participation

This paper studies the effect of a large-scale policy change in the Austrian disability insurance program, which tightened eligibility criteria for men above a certain age. Using administrative data on the universe of Austrian private-sector employees, the results of difference-in-difference regressions suggest a substantial and statistically significant decline in disability enrollment of 6 to 7.4 percentage points and an increase in employment of 1.6 to 3.4 percentage points. The policy change had important spillover effects into the unemployment and sickness insurance program. Specifically, the share of individuals receiving unemployment benefits increased by 3.5 to 3.9 percentage points, and the share receiving sickness insurance benefits, by roughly 0.7 percentage points.     

Telia—a Swedish‐Finnish marriage after a failed Norwegian courtship

In 2002, the Swedish telecommunications company Telia merged with the Finnish telecommunications company Sonera. Prior to this merger, Telia had already attempted to ally with the Norwegian telecommunications company Telenor. This effort had resulted in a disaster; the “marriage” of the two companies was “divorced” after only two months in 1999. In the first part, the case study will feature an introduction to the telecommunications industry. In the second part, the unsuccessful merger between Telia and Telenor will be examined. Particular emphasis will be placed on national conflicts of interest and the power games played by politicians and leading managers. In the third part, the merger between Telia and Sonera will be described. This will be interpreted as another example of a politically and culturally difficult, but to this day successful merger. Finally, both merger episodes will be analyzed with reference to international mergerand‐acquisition (M&A) literature. The focus will be on motivations and objectives, environmental influences on the two mergers, and internal issues of the merging companies. © 2009 Wiley Periodicals, Inc.     

Cheating in Contests

Much of the interest in the study of sports from the perspectiveof an economist lies in the empirical application of contestsas efficient mechanisms for eliciting effort. Contestants respondto contest incentives, and these incentives include the incentiveto cheat. This paper discusses different forms of cheating:sabotage, doping, and match fixing. The paper discusses howthese forms of cheating arise and how they can be treated. Inparticular, we look at specific forms of cheating in soccer,baseball, and cricket. In the appendix we develop a simple modelof match fixing.     

Changing investment styles: style creep and style gaming in the hedge fund industry

Notwithstanding their common features, hedge funds remain an extremely diverse asset class. Information on fund styles is important for numerous purposes, such as portfolio construction, performance attribution and risk management. With fund self‐declaration being prone to (strategic) misclassification, return‐based taxonomies grouping funds along similarities in realized returns provide a useful alternative. We provide a consistent classification system of homogeneous groups of hedge funds based on self‐organizing maps. Whereas some fund categories such as managed futures are largely consistent in their self‐declared strategies, others, especially so‐called ‘equity hedge’ funds, display no or very limited return similarities. Furthermore, we also find evidence of fund managers performing undisclosed changes of their trading style over time. Those funds that misclassified themselves once are particularly likely to change their trading style again. Although style self‐declaration can, therefore, be quite misleading, our results indicate that hedge funds do not misdeclare their style strategically to improve their relative performance. Copyright © 2006 John Wiley & Sons, Ltd.