Risks and the financing of PPP: Perspectives from the financiers

Public private partnerships (PPP) are an established model for most governments internationally to provide infrastructure-based services, using private finance. Typically the public authority will sign a contract with a special purpose vehicle (SPV), which, because of the holistic nature of PPP, in turn sub-contracts the finance, design, construction, maintenance and soft services to companies that are often related to its shareholders. Thus there is a considerable network of linked organisations that together procure and provide the PPP project.While there is an increasing body of research that examines these PPP projects, much of it is interview or case study based so that the evidence is drawn from a small number of interviews or cases in specific sectors. It also focuses on the public sector procurer and the private sector contractor in the network of organisations. Although it has been recognised that the perceptions of the financiers may vary from those of other key PPP players there is much less research that focuses on the financiers.In this paper we report the results of a postal questionnaire survey, administered to 109 providers of senior debt and equity, from which the response rate was just less than 40%. We supplement these findings with a small number of illustrative quotes from interviewees, where the cited quote represents a commonly held view. We used SPSS and Nvivo to analyse the data.The findings show that when assessing PPPs financiers perceive a very wide range of risks as important, and that it is important to them that many of these risks are either insured or allocated to sub-contractors. When considering participating in PPPs, financiers agree that working with familiar partners on familiar projects and in familiar sectors is important, which may raise barriers to entry and undermine competitive processes.     

Automation, speed, and stock market quality: The NYSE's Hybrid

Automation and trading speed are increasingly important aspects of competition among financial markets. Yet we know little about how changing a market's automation and speed affects the cost of immediacy and price discovery, two key dimensions of market quality. At the end of 2006 the New York Stock Exchange introduced its Hybrid Market, increasing automation and reducing the execution time for market orders from 10 seconds to less than one second. We find that the change raises the cost of immediacy (bid-ask spreads) because of increased adverse selection and reduces the noise in prices, making prices more efficient.     

The influence of executive cognition on competitive dynamics

Prior competitive dynamics research has drawn on theories of information processing to model the subjective antecedents of executives' retaliation choices. This prior work has made great progress in developing our understanding of the retaliation choices most firms will make to a given type of attack. What the information processing perspective has not been able to do is explain firm‐specific behavior to predict which competitive moves individual firms will challenge, or explain why individual firms differ in the types of actions that they are most likely to challenge. The goal of this paper is to sharpen the theoretical and empirical focus on predicting firm‐level retaliation proclivities. We leverage managerial cognition research to examine the relationship between firm‐level differences in the cognitive frameworks that executives possess, and firm‐level differences in whether and how quickly firms challenge a market move. Results from a longitudinal study of the airline industry suggest that the addition of a cognitive perspective provides important insights into competitive retaliation. Copyright © 2010 John Wiley & Sons, Ltd.     

Child–mother nutrition and health status in rural Kenya: the role of intra‐household resource allocation and education

There exists gender bias in resource ownership in many parts of Kenya with women being more disadvantaged. Resource ownership and control within the household has differential impacts on the health and overall well‐being of male and female members. This paper examines intra‐household resource ownership and how it affects nutrition and health status of household members. Data from a household survey containing detailed gender‐disaggregated information on resource ownership as well as food and anthropometry were collected from a rural Kenyan district and used in the analysis. Results showed that male members of the household had more access to education, income and land than the females. Mothers’ education, household income, frequency of illness and nutrient intake were the most important factors that contributed to the nutritional status of children. The education and household’s economic status were important determinants of child morbidity. Malnutrition and poor health of children and women is linked to the existing poverty in the study region, therefore emphasis needs to be put on eradication of discrimination against women in accessing education and accessing land, which will contribute to an increase in household incomes. Government policies need to focus on promotion of nutrition education through adult education programmes and incorporating it in the school curricula. Improvement of health‐care facilities in rural areas is also paramount to improving health and nutrition in these areas.     

The Relation Between Investor Uncertainty and Market Reactions to Earnings Announcements: Evidence from the Property‐Casualty Insurance Industry in the USA

Abstract:   This paper investigates the relationship between investor uncertainty, gauged by properties of analysts' forecasts, and the stock market response to earnings. We find that uncertainty is best characterized by a comprehensive measure recently proposed by Barron, Kim, Lim and Stevens (1998) , BKLS. The BKLS measure is related to uncertainty‐inducing events, as well as factors that affect the difficulty faced by analysts in forecasting earnings. We conclude that, first, pre‐disclosure uncertainty is a significant determinant of the price reaction to the earnings release, and second, BKLS is a more comprehensive measure of uncertainty than simple dispersion.     

The lay subsidies and the distribution of wealth in medieval England, 1275–1334

This article examines the evidence that between 1275 and 1334 the lay subsidies provide a yardstick with which to measure the English economy. It compares their evidence with the chronological and geographical pattern of wealth obtainable from the Statute Merchant records of debt and concludes that the main discrepancies can be explained by the progressive exclusion from the tax valuations of wool, coin, and credit. Accordingly, from c . 1300 the lay subsidies cannot be used as a guide to the distribution of wealth in England and they can offer only a limited comparison with the wealth revealed by the Tudor subsidies.     

ABNORMAL RETURNS AND ANALYSTS' EARNINGS FORECAST REVISIONS ASSOCIATED WITH THE PUBLICATION OF “STOCK HIGHLIGHTS” BY VALUE LINE INVESTMENT SURVEY

We examine the reaction of stocks and the response of financial analysts' earnings forecasts to securities recommended as “Stock Highlights” by Value Line Investment Survey. Significant abnormal returns appear around the publication of stock highlights. Stock price responses are relatively efficient and permanent. Using earnings expectation data provided by the Institutional Brokers Estimate System, we find analysts raise their forecasts significantly following Value Line recommendations. Near-term forecast revisions are significantly related to stock returns at the time of the recommendations. Thus, an explanation for Value Line's security recommendation success is its ability to generate firm-specific earnings information.