Pricing the Cost of Expropriation Risk

The paper examines a firm's cost of expropriation risk in a framework that links it to the government's incentive to expropriate. The author develops a pricing model for the firm's cost of expropriation risk that includes the positions of both government and firm. The government's decision to expropriate is modeled as an American-style call option. The cost of expropriation risk is modeled as the value of an insurance policy that pays off all losses resulting from expropriation. The firm's cost of expropriation risk is determined by the government acting to optimize the value of its option to expropriate. The author identifies the parameters that link the government's option to expropriate to the firm's cost of expropriation risk, and shows how the model can be used in capital budgeting decisions and the ongoing management of expropriation risk.     

Applying a non parametric methodology to the study of corporate reputation

This study applies nonparametric methodologies to the study of corporate reputation. The study examines the reputation of the five leading Israeli banks in the aftermath of a major crisis in the industry, and compares it with the reputation of the five major insurance firms in the country across seven reputation attributes which are then correlated with “hard” measures, including corporate performance. While promotional investment was identified as the major reputation determinant in both industries, performance and size were found to be major codeterminants in the banks, while age and growth were the major co-determinants among the insurance firms. A negative relationship has been identified between performance and prestige.     

SOA架构奠定电子商务成功的基础

今天所谈的是,作为服务构建的软件。目前,作为一种服务构建的软件,先给大家一些线索。如果你买软件的话,可能需要去签一个合同,并且得到一些服务。对于公司来讲,公司有业绩,获得一定的收益,这样才可以进行公司的运作,这样的结构并     

Political Connections and Leverage: Firm‐level Evidence from Pakistan

This study investigates the impact of political connections on corporate financing decisions using a sample of listed Pakistani firms over the period 2002–2010. We find a positive and significant link between long‐term debt and political connections, which reflects greater access to credit. Such preferential treatment escalates with the strength of the connected politician. Furthermore, positive effects of political connections are seen to be stronger for large firms and those affiliated with business groups. Copyright © 2014 John Wiley & Sons, Ltd.     

Theoretical motives of corporate cash holdings and political connections: firms level evidence from a developing economy

In this paper, we revisit the theoretical motives of corporate cash holdings while concentrating on the effect of political connections. In particular, we postulate two competing hypotheses for the effects that political connections can have on cash holdings: ‘substitution effect hypothesis’ and ‘complementary effect hypothesis’. Using the data on Pakistani firms over the period 2002–2010, we find that connected firms hold significantly larger cash reserves than their non-connected counterparts, thus confirming the ‘complementary hypothesis’, which suggests that agency problems lead connected firms to accumulate large amount of cash. Further, this effect is found to be more pronounced in dictatorial as opposed to democratic regimes indicating the presence of higher degrees of political patronage in that period. Finally, we also find differences in the complementary effect based on firm characteristics. Our results suggest that the firm size and leverage have increasing effects on the cash holdings of connected firms, contrary to the mainstream literature standpoint.     

Adoption of fertiliser and hybrid seeds by smallholder maize farmers in Southern Malawi

Despite decades of agricultural policies that promoted the adoption of fertiliser and hybrid seed technologies as ways of improving productivity in maize farming, smallholder farmers in Malawi have been relatively slow to adopt the new technology. Using bivariate probit analysis and controlling for technology acquisition through grants, we found that fertiliser adoption was positively associated with higher levels of education, larger plot sizes and higher non-farm incomes, but negatively associated with households headed by women and distance from input markets. The adoption of hybrid seeds is positively associated with market-based land tenure systems and fertile soils, but negatively associated with age of the farmer and distance from input markets.     

Labor market equilibria under limited liability

This paper explores the impact of limited liability on labor market equilibria. Assuming risk-neutrality, the effect of limited liability on production decisions is neutral. It is demonstrated that neutrality of the production decision will not hold under safety-first type of risk aversion. In particular limited liability generally decreases usage of capital. The changes in the quality of labor depend on the magnitude of complementarity between capital and labor and on whether the output clasticity of labor is greater or less than unity. Hence it is possible for limited liability to decrease the usage of labor and capital and hence reduce output.     

Who trades with whom — the income pattern of international trade

Zusammenfassung Wer treibt mit wem Handel? Das Einkommensmuster im internationalen Handel. — Dieser Aufsatz zeigt für 100 L?nder das Durchschnittseinkommen der Handelspartner, und zwar sowohl für die Importals auch für die Exportseite. Diese Angaben werden mit fiktiven Durchschnittseinkommen verglichen, die sich ergeben würden, wenn die geographische Verteilung des Handels rein zuf?llig w?re. Dabei stellt sich heraus, daΒ die Abweichung der tats?chlichen von den zuf?lligen Handelspartner-Einkommen mit der geographischen Konzentration des Handels, mit dem Anteil des mit den USA geführten Handels am gesamten AuΒenhandel sowie mit dem eigenen Pro-Kopf-Einkommen des jeweils betrachteten Landes zunimmt. Der positive Einkommenseffekt zeigt, daΒ zumindest für die industrialisierten reichen L?nder das Einkommensmuster des internationalen Handels mit Linders Hypothese übereinstimmt. Sein AusmaΒ deutet allerdings darauf hin, daΒ dieser Faktor nur wenig dazu beitragen kann, die Richtung des internationalen Handels zu erkl?ren.

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Résumé Qui fait de commerce avec qui? La structure de revenu dans le commerce international. — Cet article présente des données pour cent pays sur le revenu moyen des partenaires commerciaux de chaque pays, en ce qui concerne les importations aussi bien que les exportations. Ces données sont comparées avec les revenus moyens qui résulteraient d’une structure géographique du commerce par pur hasard. Les auteurs trouvent que la divergence entre le revenu du partenaire commercial actuel et le revenu du partenaire commercial par hasard s’accroit avec la concentration géographique du commerce, avec l’importance du commerce qui est fait avec les E.U. et avec le revenu per capita du pays respectif. L’effet positif de revenu démontre que la structure de revenu en ce qui concerne le commerce des pays riches et industrialisés est conforme avec 1’ hypothése de Linder. Sa dimension, cependant, suggére aussi que ce facteur est peu important d’expliquer la direction du commerce international.

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Resumen Quièn comercia con quièn — el patron de ingresos del comercio international. — Este articulo prèsenta datos de 100 pafses sobre el ingreso promedio de los socios comerciales de un pais, tanto para importaciones como exportaciones. Estas cifras se contrastan con los ingresos promedios que se obtendrian si el patron geográfico del comercio fuera puramente al azar. Se descubrió que la divergencia entre el patron de ingresos de los socios comerciales actual y al azar aumenta con la concentracion geográfica del comercio, con la parte del comercio efectuada con los EEUU y con el ingreso per capita propio del pais. El efecto ingreso positivo muestra que el patron de ingresos del comercio, a cualquier tasa, de pafses industrializados y ricos, están de acuerdo con la hip?tesis de Linder. Su magnitud, sin embargo, sugiere tambièn que este factor es de pequena importancia para explicar la dirección del comercio international.

     

Successive retention of funds,loan profitability and marketing implications in banking

This paper analyzes potential effects of successive retention of funds, induced by portions of funds granted as loans being successively redeposited via a chain of market transactions in the same bank, on loan profitability. It identifies sets of market conditions and loan terms under which the magnitude of the fund retention phenomenon could be significant, derives formulae to measure its magnitude, and suggests loan marketing strategies potentially capable of exploiting successive retention of funds to improve loan profitability. The potential role of the loan-induced retention process as an additional explanatory factor in the relationship between market structure and market performance in banking is also discussed.