An appropriate model for joint regional action in southern Africa after apartheid

Market‐based integration is not appropriate to the joint development of the southern African region; the region's political, technical and institutional immaturity requires instead loose, function‐based economic cooperation. This will also facilitate intraregional trade. Subregions in the meantime could progress to higher levels of integration: international experience has shown that successful integration is most likely when it takes place on the basis of ‘regions within regions’. Cooperative development of the subcontinent is likely to be best achieved through the ‘concentric circles’ approach to regional cooperation, in which a revised Southern African Customs Union‐Common Monetary Area forms the highly integrated core of a loose, function‐based cooperative arrangement covering the whole of southern Africa.     

Contract modifications and the basis behavior of live cattle futures

The purpose of this study was to assess the basis behavior of the Live Cattle Futures contract at the Chicago Mercantile Exchange (CME) before and after the 1995 contract changes. Additionally, an alternative method of basis calculation utilizing weighted mean futures prices versus settlement futures prices was compared to determine which method provides a better representation of the basis level. Within a regression model with heteroskedascity error framework, we found that the level of nearby basis in the period after June 1995 has shifted lower and the average monthly open interest of net commercial long positions has substantially increased after the contract modifications. These empirical results are consistent with the notion that more long activity entered the market in response to the contract modifications. Additionally, an alternative (new) measure of basis calculation (cash price minus weighted mean futures price) produced similar results to two other commonly used measures. In conclusion, the 1995 contract changes have neither increased nor decreased the volatility of live cattle basis. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:557–590, 2004     

Got milk? The rapid rise of China’s dairy sector and its future prospects

This paper synthesizes recent research and new empirical findings to build a more comprehensive understanding of developments in China’s dairy sector. China’s tremendous rise in dairy demand has been driven by several mutually reinforcing factors: including rapid income growth, promotion by the government and dairy industry, changes in urban lifestyles, and the development of new, more sophisticated marketing channels. Domestic milk output has grown to satisfy rising demand largely by increasing the dairy herd. Substantial increases in productivity have been achieved through technology adoption, but there is evidence that the torrid growth has created inefficiencies because adaptations to marketing rules, infrastructure, and institutions have not kept pace with the changing environment. These results suggest there is ample room for future growth in both domestic milk production and dairy demand, but multinational firms and imported products will likely play and increasing role as China’s dairy market continues to develop.     

E-Consulting in Virtual Negotiations

In the e-world where many of us live and work, virtual work arrangements will become increasingly commonplace. This paper reports on an exploratory study into the way in which consultants can ply their trade virtually with clients whom they never meet. US-located e-consultants provided advice to Hong Kong-located web site developers on the interface and content aspects of a website that was being developed for an international audience. Extensive analyses of the communication between the consultants and developers is undertaken, in parallel with an analysis of survey data obtained from the two sets of stakeholders. Lessons are drawn for future research and practice.     

Using proxies for the short rate: when are three months like an instant?

The dynamics of the unobservable short rate are frequently estimateddirectly using a proxy. We examine the biases resulting fromthis practice (the 'proxy problem'). Analytic results show thatthe proxy problem is not economically significant for single-factoraffine models. In the two-factor affine model of Longstaff andSchwartz (1992), the proxy problem is only economically significantfor pricing discount bonds with maturities of more than fiveyears. We also describe two different numerical procedures forassessing the magnitude of the proxy problem in a general interestrate model. When applied to a nonlinear single-factor model,they suggest that the proxy problem can be economically significant.     

How law,politics and transnational networks affect technology entrepreneurship: Explaining divergent venture capital investing strategies in China

This article identifies three distinct patterns of investment behavior by venture capital firms investing in technology sector start-ups in China. The first pattern is the service-oriented, technology-light investment behavior exhibited by the foreign venture capitalist firms not founded by ethnic Chinese. The second pattern is the technology creation investment pattern exhibited by foreign firms founded by ethnic Chinese and embedded in ethnic Chinese communities. The third pattern consists of local state-funded Chinese venture capital firms that choose either to invest in state-directed projects or opt out of investing in technology start-ups entirely. What explains the differences in behavior between the strictly foreign and the ethnic Chinese-embedded foreign firms are the different legal environments in which these firms honed their skills. The different learned experience gained from operating in different environments explains why the foreign firms avoid investing in technology-generating activities in China whereas the ethnic Chinese firms are willing to do so despite China’s notorious weak intellectual property rights regime. The political factors influencing the distribution of finance in China explain the behavior and essential failure of the local state-run venture capital firms. These findings demonstrate that several distinct, separate and non-clashing institutional arrangements are concurrently operating within China and shaping the behavior of venture capital firms there.     

Is Beta Dead or Alive?

The debate about whether beta is dead or alive has heated up once again. We believe the empirical work supporting either side of the argument is limited because market frictions are not adequately addressed. This study clarifies the controversy about the issue by creating a new moving-average beta and analyzing two market anomalies: the turn-of-the-year and the Monday effects. What is discovered in this research is (1) that a fundamental source of the problem underlying the two types of market anomalies is the persistence of market frictions that retard the arbitrage process; (2) that beta is seriously ill if the effects of market frictions are ignored; and (3) that beta is alive and well if the effects of market frictions are accommodated. Also, we show, by using an optimal lead/lag structure, the moving-average beta provides significantly higher explanatory power for the turn-of the-year and the Monday effects than betas created from ordinary least squares regression and Scholes-Williams and Fama-French methods because the moving-average beta accommodates the effects of market frictions into the body of beta itself. This new type of beta, a moving-average beta, is demonstrated to be robust.     

Recycling consumer solid waste: A commentary on selected channel alternatives

The recycling of consumer solid waste presents special problems for reverse marketing channels. Specifically, the accumulation of bulk quantities of homogenous materials from consumer-generated sources that are highly heterogenous in nature represents a major functional problem that must be overcome through the development of appropriate reverse marketing channels. In this article, factors influencing reverse channels development are outlined, and specific marketing implications concerning the three basic channel types that primarily handle consumer solid waste are discussed.