Banking relationships and access to equity capital markets: Evidence from Japan’s main bank system

We study the role of banking relationships in IPO underwriting. When a firm in Japan goes public, it can engage an investment bank that is related through a common main bank, or can select an alternative investment bank. The main bank relationship can be an efficient way for the investment bank to acquire information generated by the main bank, but may give rise to conflicts of interest. We find that main bank relationships give small issuers increased access to equity capital markets, but that issuers of large IPOs often switch to non-related investment banks that are capable of managing large offerings. While investment banks seek to exploit bargaining power with related issuers, issuers respond to expected high issue cost by switching to non-related investment banks. The net result is that total issue costs through related and non-related investment banks are similar. With respect to aftermarket performance and use of proceeds, we find no evidence of conflict of interest or self-dealing for either the main bank or the investment bank.     

Increasing Charitable Giving: What Can We Learn from Economics?*

There is growing policy interest in charitable giving in the UK. As part of its Big Society agenda, the current government is keen to encourage a higher level of donations, highlighting new technologies, new social norms and tax incentives as potential mechanisms for raising giving. In the 2012 Budget, however, the Chancellor also proposed limiting tax relief on donations to £50,000, sparking an intense discussion about the effectiveness and desirability of tax incentives for major donors. This paper brings together recent evidence relevant to the ongoing policy debates.     

Introduction: Globalization and the Workplace in Pacific Asia

Hong Kong's economic successes are evident. As ever, the interpretation of this phenomenon at the level of politics, culture, human capital and business organization is less obvious, though a familiar list of the ‘usual suspects’ of ‘explanations’ has emerged. Hong Kong now faces new and renewed challenges which are linked to shifts in the industrial structure, emerging market demands and the interconnected upgrading of both production and human resources, in addition to the implications of reunification. Key themes of national competitiveness, deindustrialization and the upgrading of production facilities and human resources are all shown to be important, but also multi-layered and hazy concepts.     

Deane–Draper stores: employee empowerment in a retail environment

This case focuses on the application of employee empowerment principles to a large retail group. It provides the opportunity to analyse the manner of the strategy implementation and the consequent impact on both individuals and the organization. The case establishes significant financial underperformance in one part of a retail group and investigates the use of ‘employee empowerment’ techniques - following Carlzon (1987) - to provide a solution. The case illustrates the dysfunctional activity associated with implementing empowerment without either appropriate management control or staff training, together with the dire financial implications. The Teaching Resource Note discusses alternative approaches that might have been adopted.     

政党与政权的生命

本文提出了一套关于一党制下的政权巩固理论，并试图利用该理论来解释一党制国家政权寿命长短不一的原因。文章作者认为，在政党建设过程中，政治精英们思忖如何建立强有力的政治支柱时，不得不考虑的两个因素就是反对派势力的强弱和寻租的难易程度。如果反对派势力越弱小，且寻租越容易，那么政权建设的成本就越低，但同时这又将不利于建立一个强大的政党联盟或政党组织，并最终导致一党制政权脆弱而不堪一击，一遇危机就陷入分崩离析的境地。相反，如果执政精英起初就面临强大的反对势力并且寻租的可能性很小，那么他们就会给潜在的盟友提供话语权和决策权，从而推动政党建设。事实也证明诸如此类的执政党在危机来临的时候有更强的柔韧性和生命力。为了证实该理论，作者以几内亚比绍和坦桑尼亚，印尼和菲律宾这两对国家为例进行了详细的阐述。     

An Introduction to the Symposium on the Use of Simulation in Applied Industrial Organization

Simulation offers a rigorous methodology for addressing policy or litigation issues that require a comparison of an observed state of the world with an unobserved one. Simulation employs a calibrated, structural oligopoly model to describe the unobserved state of the world. Calibration involves reliance on real-world observations to set the key parameter values in the model. Simulation is an increasingly important tool of the industrial organization economist, particularly in analyzing the competitive effects of mergers. Papers in this symposium illustrate merger simulations in a variety of contexts and one other application of simulation.