BANK LOAN SALES: A NEW LOOK AT THE MOTIVATIONS FOR SECONDARY MARKET ACTIVITY

Bank lending traditionally involves the extension of credit that is held by the originating bank until maturity. Loan sales allow banks to deviate from this pattern by transferring loans in part or in their entirety from their own books to those of another institution. I use a new methodology to test the validity of two hypotheses regarding banks' motivations for selling and buying loans: (1) the comparative advantage hypothesis, that banks with a comparative advantage in originating loans sell and those with a comparative advantage in funding loans buy; and (2) the diversification hypothesis, that banks lacking the ability to diversify internally use loan sales and purchases to achieve diversification. I also address the possibility that information asymmetries may increase the cost of participating in secondary markets. Particular attention is paid to the importance of affiliate relationships in overcoming informational barriers to participation. The empirical evidence presented here helps clarify the benefits of an active secondary loan market and generates predictions regarding the future of that market in a world of rapid consolidation and disappearing barriers to geographical expansion.     

Is there anything real about real wages? A history of the official British cost of living index, 1914–62

This article explores the history of the cost of living index, tracing its evolution from its introduction in 1914 as a device designed to furnish an adequate evidential base for the tariff reform debate, through to the mid‐twentieth century, when it had become one of the most important measures in the British economy, influencing the wages of millions of workers. By embedding the index within the wider economic, political, and social histories of the period, the article presents a consideration of how it came to exert such influence over the economy, and why, despite its widely acknowledged inadequacies, the index remained tied to a rough estimation of a pre‐1914 pattern of working‐class expenditure until 1947. Through examining the debates surrounding its compilation and the context in which decisions were taken about its modification, it is demonstrated that, far from being a neutral statistical measure, the official cost of living index was essentially political in nature.     

“Women Home and Away”: Transnational Managerial Work and Gender Relations

This article addresses the intersections, even blurrings, of two “homes” and two “aways” – the personal, ‹private’ home and the corporate ‹public’ ‹away’, and the national home country and corporate base and the transnational work away. Drawing on 40 semi-structured interviews with women and men top and middle managers in seven multinational corporations located in Finland, we examine the complex relations among transnational managerial work, corporate careers and personal, marriage and family-type relations, and their differences for women and men managers. This shows the very different personal and social worlds inhabited by senior women and men managers, and how transnational processes can make those differences even greater.

Don't rest on your laurels: Reputational change and young technology-based ventures

We combine resource-based theory and social cognition theory to investigate the factors both limiting and related to between-period reputational change of young firms in a dynamic technology-based industry. An analysis of computer graphics chipmakers during the period 1992–2003 provides evidence that operational signals are related to reputational change. Specifically, receiving a product award in the current period is associated with positive change and gaps in product announcements are associated with negative change. We find little support for our hypothesis that the reputations of older firms are less likely to change.     

The impact of a product’s country-of-origin on compromise and attraction effects

Product information, such as country-of-origin (COO), often influences consumer choice. This research explores how valence of COO influences the magnitude of the compromise and attraction effects. The results of four experiments demonstrate that when a product’s COO denotes a negative image, the compromise and attraction effects decrease. The analysis also reveals asymmetric change of magnitude in the compromise and attraction effects.     

Anticipated regret as an explanation of uncertainty aversion

The paper provides a psychological explanation of uncertainty aversion based on the fear of regret. We capture an agent’s regret using a reference-dependent utility function in which the agent’s utility depends on the performance of his chosen option relative to the performance of the option that would have been best ex post. An uncertain option is represented as a compound lottery. The basic idea is that selecting a compound lottery reveals information, which alters the ex post assessment of what the best choice would have been, inducing regret. We provide sufficient conditions under which regret implies uncertainty aversion in the sense of quasi-concave preferences over compound lotteries.