Estimation of global systematic risk for securities listed in multiple markets

In this era of rapid globalization of financial markets there has been a substantial increase in cross-listings of stocks in foreign and regional capital markets. As many as a third to a half of the stocks in some major exchanges are foreign listed. The multiple listings of stocks has major implications for the concept of systematic risk. This paper demonstrates that the estimator for systematic risk and the methodology itself changes when stocks are listed in multiple markets. The paper suggests general procedures, using maximum information from the multiple markets, to obtain the estimator of beta under a variety of assumptions about the error terms of the market models in the different capital markets. The assumptions pertain both to the volatilities of the abnormal returns in each market, and to the relationship between the markets.     

On the Design and Pareto-Optimality of Participating Mortgages

This paper develops a micro-economic model and proceeds with numerical simulation to demonstrate that participating mortgages can improve social welfare when the real estate ownership is shared among the different taxable entities. The optimal distribution of real estate ownership and lending will tend to be concentrated in taxable and nontaxable hands, respectively, with lending conducted via participating mortgages. This paper also demonstrates the violation of the well-known, risk-neutral valuation argument of the Black and Scholes (1973) model because of the lack of a riskless hedge due to the uniqueness of real estate.     

Meeting basic needs: An overview

This paper summarizes some of the main issues related to the World Bank's basic-needs oriented lending programme. In particular, based on country experience it discusses the lessons learned with regard to sectoral policies and programming for their basic needs and their implications for future lending.     

Anatomy of Corruption: An Approach to the Political Economy of Underdevelopment

Abstract . An examination and critique of the functionalist literature on corruption in the political administration of Less Developed Countries (LDCs) indicate that its claims are without empirical foundation. Its theses with regard to the political, economic and administrative effects in most LDCs contrast with the facts. No benefits for development from corruption are found; market corruption, for example, does not appear to improve allocative efficiency. The erosion in a government's capacity to formulate and implement policies making for economic growth is an obstacle to economic progress.     

An integrated approach to control system design

Existing approaches to the problem of designing management control systems may be described as primarily structural or behavioral. The first approach is characteristic of the accounting literature. It takes a rational and mechanistic view of control and treats the control system design problem as one of designing an effective information structure. The behavioral approach, exemplified by the socio-psychological literature on performance, views control as a problem of designing social relationships which lead to high performance.     

Regulation and the Promotion of Audit Ethics: Analysis of the Content of the EU’s Policy

Accounting literature has commonly judged the impact of regulation on auditors’ ethical commitment by studying daily audit practice. We argue that the content of the regulations themselves is an important determinant of such an impact. This paper evaluates the capacity of the content of regulation to promote audit ethics by reference to the European Union’s (EU) audit policy. Anchored in the extant conceptual perspectives on ethics, our analysis of relevant policy documents shows that the EU’s approach to audit ethics relates most strongly to the deontological perspectives on ethics and leaves largely unexplored other means of promoting auditors’ ethical stance, such as by stimulating virtue ethics. We find that it is the EU regulators’ restricted view of the conceptual foundations of audit ethics that limits the capacity of their policy to effectively stimulate auditors’ ethical commitment. The paper also discusses the potential implications of our analysis for the design of future audit policy.     

Some notes on work ethos and economic development

These notes suggest a methodology that may lead to an ordinal ranking of societies, economies and ethic groups, either in the past or in the present, on the basis of their work ethos. These rankings may then be employed to test my thesis that work ethos has had an important influence on the pace of economic development in LDCs. As a suggestive exercise, I have presented some evidence to compare the work ethos in Colombia with some Far Eastern economies.     

Mentoring in supervisor-subordinate dyads: Antecedents, consequences, and test of a mediation model of mentorship

We develop a framework to look at mentoring as a consequence of employees' values and beliefs, as well as to explore its role in determining the employees' attitudes towards their organizations. Based on social exchange theory, we hypothesize that employees' levels of individualism, collectivism, and trust in supervisor influence the level of supervisory mentoring received. Moreover, mentoring influences employees' affective commitment and intention to quit, as well as mediates the relationships between the proposed antecedents and outcomes. Using structural equation modeling to examine these relationships, we find that within supervisor-subordinate dyads, subordinates report more mentoring when they have collectivist personal values and trust their supervisor. Additionally, more mentoring is positively related to subordinates' affective commitment towards the organizations and negatively related to their intention to quit. We also find that mentoring mediate the relationship between both collectivism values and trust in supervisors and both organizational commitment and intention to quit.     

Exchange rate fluctuations,firm size,and export behavior: an empirical investigation

In this paper, we examine how changes in the exchange rate and its volatility affect the export behavior of manufacturing firms. We also investigate whether both exchange rate changes and exchange rate volatility affect firms of different sizes differently. Applying the two-step system generalized method of moment estimator on our data for a sample of 221 Pakistani manufacturing firms, we find that the real exchange rate depreciation has positive impacts, whereas the exchange rate volatility has negative impacts on firms’ exports. We also find that compared to large-sized firms, small- and medium-sized exporting firms are more likely to benefit from currency depreciations. Yet, regarding the effect of exchange rate volatility, we find that the adverse impact of exchange rate volatility is weaker for large-sized firms as compared to small- and medium-sized firms. Our findings confirm the presence of nonlinearity in export-deterring (favoring) effects of exchange rate volatility (depreciation) on exporting behavior depending on firm size. Pakistan should design and implement export-favoring preferential policies by emphasizing on real exchange rate stabilization and providing incentives to large firms to come into being. Small- and medium-sized enterprises should develop such export strategies that help reduce their size disadvantages, particularly in managing exchange rate risks.