The foreign exchange exposure of Chinese banks

Using the capital market approach and the equity price data of 14 listed Chinese banks, this empirical study finds that there is a positive relationship between bank size and foreign exchange exposure. This relationship may reflect the larger foreign exchange operations and trading positions of larger Chinese banks and their significant indirect foreign exchange exposure arising from impacts of the renminbi exchange rate movements on their customers. Empirical evidence also suggests that the average foreign exchange exposures of state-owned and joint-stock commercial banks in China are higher than those of banks in Hong Kong, notwithstanding their limited participation in international banking businesses compared with their Hong Kong counterparts. It is also found that negative foreign exchange exposure is prevalent for larger Chinese banks, suggesting that an appreciation of the renminbi tends to reduce their equity value. It is therefore likely that the banking sector's performance will be hampered. Together with the fact that decreases in equity values generally imply a higher default risk, the effects of different scenarios of renminbi appreciation on the default risk of Chinese banks should therefore be closely monitored.     

Pressure and the ability to randomize decision-making: The case of the pickoff play in Major League Baseball

In mixed strategy games, the ability to randomize decisions is a critical strategic necessity, yet studies show that such rational behavior is sometimes elusive. This paper examines mixed strategy play in a natural setting, by looking at a pitcher’s decision to throw the ball to home plate or to throw it to first base in a pickoff play. In the absence of significant pressure, we find that pitchers can effectively randomize their sequence of choices to remain unpredictable, as mixed strategy Nash equilibriums require. However, in the face of pressure, some pitchers are less able to randomize their choices. Our paper is the first empirical study in the English language literature to find that decision makers are unable to randomize their strategic decisions when they face an increased cognitive load due to pressure.

     

Educational mismatches versus skill mismatches: effects on wages, job satisfaction, and on-the-job search

Education-job mismatches are reported to have serious effectson wages and other labour market outcomes. Such results areoften cited in support of assignment theory, but can also beexplained by institutional and human capital models. To testthe assignment explanation, we examine the relation betweeneducational mismatches and skill mismatches. In line with earlierresearch, educational mismatches affect wages strongly. Contraryto the assumptions of assignment theory, this effect is notexplained by skill mismatches. Conversely, skill mismatchesare much better predictors of job satisfaction and on-the-jobsearch than are educational mismatches.     

Conflict Evolution: Tracking the Middle East Conflict with Drama Theory

The situation in the Middle East has developed through an episodic process in which the protagonists have periodically changed the ‘game’ that they are playing by inventing new options, seeking to eliminate the options available to others, or by raising or eliminating doubts in the minds of others about their intentions. Such conflict evolution is readily captured by the framework of drama theory which goes some way to explaining the pressures motivating such actions. This paper traces the recent development of relations between the Israelis and the Palestinians through a succession of drama theoretic models. The importance of taking note of interactions at several levels is highlighted: stalemate at one level may be dislodged by actions taken in others. It is concluded that any resolution of the confrontations in the Middle East is likely to require the active involvement of the international community but may be destabilised by pressure from internal factions within the key parties.     

What is professional attire today? A conjoint analysis of personal presentation attributes

Personal presentation attributes have long been understood to affect perceptions of competence and capabilities. To that end, this study investigates seven attributes associated with favorable interview presentation, including overall physical attractiveness, neatness and grooming, clothing color, conservative versus trendy attire, professional versus casual attire, and body modification (including tattoos and piercings). Participants (n = 108), including students, faculty, and hospitality industry professionals, sorted an orthogonal array of 16 full-color, laminated cards that contained photos so that respondents could see levels of clothing color, clothing conservativeness, and degree of professional attire. The remaining attributes and their corresponding levels were shown on respective analog indicators. The conjoint analysis results indicate that grooming and professional attire are the most important attributes in shaping favorable perceptions. Furthermore, faculty perceived conservative clothing to be better while students and industry professionals indicated that trendy clothing creates a more favorable presentation on the part of a job candidate.