Artificial decision-making and artificial ethics: A management concern

Expert systems are knowledge-based information systems which are expected to have human attributes in order to replicate human capacity in ethical decision making. An expert system functions by virtue of its information, its inferential rules, and its decision criteria, each of which may be problematic. This paper addresses three basic reasons for ethical concern when using the currently available expert systems in a decisions-making capacity. These reasons are (1) expert systems' lack of human intelligence, (2) expert systems' lack of emotions and values, and (3) expert systems' possible incorporation of intentional or accidental bias. For these reasons artificial ethics seems to be science fiction. Consequently, expert systems should be used only in an advising capacity and managers should not absolve themselves from legal and ethical responsibility when using expert systems in decision making.Omar E. M. Khalil is a visiting Lecturer of information systems at the University of Massachussets at Dartmouth. He has published in theInternational Journal of Man-Machine Studies and in several proceedings.     

Political and Interlocking Connections in the Boardroom on Private Equity Placements

This study examines the influence of directors who are politically connected and/or have boardroom interlocking on private equity placements (PEPs) in Chinese listed firms. We document that interlocked directors can significantly influence the propensity to apply for PEPs and approval of PEPs and reduce the cost of PEPs while providing greater access to proceeds from PEPs through lowering information asymmetry and information cost. Although politically connected directors have a significant role in the approval of PEPs, they are more likely to reduce the monitoring effects and increase agency problems, which lead to increased cost of PEPs and reduced proceeds from PEPs. The results also reveal that political connection diminishes the benefits of interlocking directors for firms having directors with both interlocking and political ties.     

The microstructural foundations of leverage effect and rough volatility

We show that typical behaviors of market participants at the high frequency scale generate leverage effect and rough volatility. To do so, we build a simple microscopic model for the price of an asset based on Hawkes processes. We encode in this model some of the main features of market microstructure in the context of high frequency trading: high degree of endogeneity of market, no-arbitrage property, buying/selling asymmetry and presence of metaorders. We prove that when the first three of these stylized facts are considered within the framework of our microscopic model, it behaves in the long run as a Heston stochastic volatility model, where a leverage effect is generated. Adding the last property enables us to obtain a rough Heston model in the limit, exhibiting both leverage effect and rough volatility. Hence we show that at least part of the foundations of leverage effect and rough volatility can be found in the microstructure of the asset.     

UK Cross‐Border Cooperation: Extending Rescue to Jersey Debtors on a ‘Passporting’ Basis

This article looks at the scope of using, via the Letter of Request method, the insolvency laws of another jurisdiction in circumstances where the laws of the requesting jurisdiction do not adequately cater for the type of proceeding required. Copyright © 2013 INSOL International and John Wiley & Sons, Ltd.     

Services Input Intensity and US Manufacturing Employment Responses to the China Shock

Review of Industrial Organization - We present industry-level evidence that manufacturing sectors that make use of services as inputs more intensively are more robust to shocks from import...     

A Reform in Search of a Purpose: French Insolvency Law Changes (Again!)

This article charts the additions made by the French legislator to the insolvency framework, reformed relatively recently in 2005 and 2008, consisting in a fresh set of amendments in 2014 aimed at encouraging more take up of upstream rescue proceedings as well as improving the existing procedures.     

Few Opportunities, Much Desperation: The Dichotomy of Non-Agricultural Activities and Inequality in Western Kenya

Using data from Western Kenya, we confirm the existence of a dichotomous non-agricultural sector. The poverty and inequality implications of the differently motivated diversification strategies only partly correspond to expected patterns. While high-return activities are indeed confined to richer households, low-return activities constitute an important income source for households across the entire income distribution. Finally, we examine the wider implications of our findings for rural livelihoods. We find that only engagement in high-return non-agricultural activities is significantly associated with increased agricultural productivity. It seems that such high-return activities play a key role in triggering cumulative effects of relative livelihood success.     

The trade balance effects of infrastructure services regulation

This paper addresses the relationship between the design of incentives to firms under regulation, mainly the rule for adjusting tariffs, and trade balance performance of the country. We also explore whether this relationship is relevant or not for a typical developing economy like Argentina. We find it is. To study these issues we perform comparative static numerical exercises using a CGE model where service obligation and no entry in regulated industries are assumed. We show that the capital account openness and the rate of exchange regime could be key elements to match with the regulatory regime. The potential inconsistency between the international trade regime and the regulatory regime should not be rejected a priori.     

Interdependence and Volatility Spillovers Under Market Liberalization: The Case of Istanbul Stock Exchange

This paper analyzes stock returns and volatility relations between the Istanbul Stock Exchange (ISE) and the global market as represented by stock markets in the US, the UK, Japan and Germany. Results from monthly data and multivariate cointegration tests suggest that the ISE became significantly integrated in the global market only in the period following market liberalization in late 1989. We also find evidence based on GARCH estimations that capital liberalization actually mitigated, rather than intensified, volatility in the ISE. Our results further suggest that the Asian crisis in mid‐1997 and the consequent Russian economic meltdown in mid‐1998 are partly responsible for the recent excessive volatility in the Turkish market. The results also identify the US and the UK markets as dominate sources of volatility spillovers for the ISE, even in the period following the Asian‐Russian crises. Consequently, it appears that the two matured markets of the US and the UK shoulder significant responsibility for the stability and financial health of smaller emerging markets like the ISE.