Earning the “Write to Speak”: Sell‐Side Analysts and Their Struggle to Be Heard

This paper explores the ways in which sell‐side (SS) financial analysts seek to position themselves advantageously within the wider field of investment advice in spite of widespread skepticism over the value that their forecasts and recommendations add to investment decisions. The field of investment advice has been characterized in recent years by a number of regulatory and technological changes that have forced SS analysts to reconstitute the ways in which they influence the investment decisions of buy‐side (BS) actors. Faced with existential threats, SS analysts have responded to the disruptive impact of technology and regulation by struggling hard to ensure that their services are still valued by fund managers. Key to this ongoing process is the recalibration of professional expertise, which previous research has alluded to but not explored in detail. Central to the persistence of SS analysts in processes of investment decision making are activities revolving around the production and use of analyst reports which, our findings indicate, are less valuable for their informational content than their role as “relational devices,” ascribing legitimacy to SS analysts and earning them an entry ticket to more substantive, value‐adding interactions with companies and BS actors. We also show that economic considerations in the area of investment advice are influenced by social ties, the motivations of various actors in the field, and their relative position vis‐à‐vis other actors. More generally, we contribute to the literature on professional projects by showing how professional groups are constantly engaged in attempts to reposition themselves in the social space, but that field‐level changes can restrict the outcomes of these strategies to mitigation rather than advancement for the professionals concerned.     

Are some Indian banks too large? An examination of size efficiency in Indian banking

In this paper we use data from the years 1997–2003 to evaluate the size efficiency, as distinct from scale efficiency, of Indian banks. Following Maindiratta [Maindiratta A (1990) J Econ 46:39–56] we consider a bank to be “too large” if breaking it up into a number of smaller units would result in a larger output bundle than what could be produced from the same input by a single bank. When this is the case, the bank is not size efficient. Our analysis shows that many of the banks are, indeed, too large in various years. We also find that often a bank is operating in the region of diminishing returns to scale but is not a candidate for break up.

Chicago's water market: dynamics of demand,prices and scarcity rents

Chicago and its suburbs are experiencing an increasing demand for water from a growing population and economy and may experience water scarcity in the near future. The Chicago metropolitan area has nearly depleted its groundwater resources to a point where interstate conflicts with Wisconsin could accompany an increased reliance on those sources. Further, the withdrawals from Lake Michigan is limited by the Supreme Court decree. The growing demand and indications of possible scarcity suggest a need to reexamine the pricing policies and the dynamics of demand. The study analyses the demand for water and develops estimates of scarcity rents for water in Chicago. The price and income elasticities computed at the means are -0.002 and 0.0002 respectively. The estimated scarcity rents ranges from $0.98 to $1.17 per thousand gallons. The results indicate that the current prices do not fully account for the scarcity rents and suggest a current rate with in the range $1.53 to $1.72 per thousand gallons.     

Sources of Real Exchange Rate Volatility in Africa: The Case of ECOWAS*

Abstract: This study examines the impact of (real) demand shocks, (aggregate) supply shocks, and monetary shocks on real exchange rates in 13 West African countries. We observe that the real demand shocks explain most of the fluctuations in real exchange rates in all these countries. Accordingly, policymakers should adopt a careful demand management strategy by controlling government expenditure and taxes.     

Regularity conditions and scope estimates: The case of large-sized U.S. banks

We consider economies and diseconomies of scope for large U.S. banks by employing ordinary and hybrid translog cost functions. We examine the regularity conditions in output space where scope estimates are calculated and reject all models for which these conditions fail. The translog model always possesses violations. For the hybrid translog, violations occur in every case except one. In this one case, we find economies of scope.     

Eighteenth-Century Evolutionary Thought and its Relevance in the Age of Legislation

This essay revisits the evolutionist writingsof the eighteenth century to clarify their key ideas concerninglegal and social evolution and to assess their relevance in thepresent era of pervasive legislation. The discovery of the principleof the accumulation of design is traced to these writings andthe continuity of twentieth century spontaneous-order theoryand new institutional economics with this tradition is noted.While highlighting the contributions of other institutional theoriststo the elucidation of the role of purposive action in legal evolution,the author argues that input designing does not alter the fundamentalnature of legal emergence as postulated by the eighteenth centuryscholars. The essay supports the ideal of legal generality, freespeech, property and contractual freedom as normative implicationsof the evolutionary viewpoint.     

An Investigation of the Effects of Prices and Exchange Rates on Trade Flows in East Asia

This paper investigates the dynamic response of imports and exports to changes in domestic prices, foreign prices and real effective exchange rates for Korea, the Philippines, Singapore and Thailand. A vector autoregressive model and cointegration analysis are used to study the long-run relationships and the short-run dynamics of these variables. The vector error-correction model indicates that in almost all cases, domestic and foreign prices have a larger impact on the trade flows than the real effective exchange rates. We cannot find any significant difference in the response time of import demand to shocks in prices and exchange rates; however, the response time for export supply varies among countries.     

Do I have to go shopping again? A theory of choice with movement costs

In this model, the standard theory of the one-person household is extended into space and time. The theory is extended into space by imposition of a real trip cost on the act of purchase, separate from the money price of commodities. It is extended into time by imposition of a real cost of storage (represented by “deterioration”) on the stocks of goods held in the household between shopping trips. The necessity for storage permits the theory to include an endogenous choice of capacity to store as well as choices among consumption, leisure, and shopping trip frequency. By use of duality theory, the comparative static effects of price, wage, and trip costs are examined. Production and transformation within the household are integrated into the model and shown to be covered by the dual approach.