Intermediary Behavior Research Articles

Access to Safe Assets and Financial Stability

How does the access to safe assets affect the fragility and lending behavior of financial intermediaries? We develop a global-game model of investor redemptions from money market funds that hold safe assets and fund risky corporate borrowers. Using the 2013 U.S. debt limit episode and the Federal Reserve's Overnight Reverse Repurchase (ONRRP) facility as our empirical laboratory, we provide evidence consistent with the model's implications. In particular, access to a safe asset---the ONRRP---attenuates investor redemption incentives and allows money market mutual funds to maintain their lending to corporate borrowers. Overall, our results suggest that the public provision of a safe asset reduces intermediary fragility and increases lending to the real economy.

Закономерности выбора российскими фирмами способов осуществления экспортных и импортных поставок в контексте встраивания в мировые цепочки добавленной стоимости (Regularities in the Choice of Russian Firms for the Implementation of Export and Import Deliveries in the Context of Embedding in the Global Value Chain)

Russian Abstract: В работе изучаются систематические отличия в поведении российских экспортеров обрабатывающей промышленности и внешнеторговых посредников. Теория указывает на то, что посредники являются важным институтом, позволяющим получать доступ на экспортные рынки малым и средним предприятиям. Российские данные в целом соотносятся с этой ролью посредников, а также с рядом прочих закономерностей относительно поведения посредников и прямых экспортеров, следующими из теории и наблюдающихся на данных других стран. К примеру, имеются систематические различия выраженности роли посредников в зависимости от различных характеристик рынка страны-импорта, характеристик экспортируемых товаров. В совокупности с мировым опытом использования посредников для продвижения экспорта, результаты настоящей работы могут быть использованы для выработки оптимальных стимулов для посредников, конечной целью применения которых является наращивание российского несырьевого экспорта. English Abstract: The paper studies the systematic differences in the behavior of Russian manufacturing exporters and intermediaries. The theory indicates that intermediaries are an important for small and medium-sized enterprises to gain access to export markets. Russian data is supportive to this prediction, as well as to a number of other regularities regarding the behavior of intermediaries and direct exporters, which follow from theory and are observed in data from other countries. For example, there are systematic differences in the role of intermediaries depending on the different characteristics of the import-country market, the characteristics of exported goods. In conjunction with international experience of using intermediaries for export promotion, the results of this work can be used to develop optimal incentives for intermediaries and, therefore, to increase Russian non-oil exports.

Brokering Orientations and Social Capital: Influencing Others’ Relationships Shapes Status and Trust

Individuals often influence others’ relationships, for better or worse. We conceptualize social influence processes that impact others’ social networks as brokering, and advance a multifaceted model that explains how brokering behaviors can create, terminate, reinforce, and modify others’ network ties. To empirically study brokering, we introduce and validate the Brokering Orientations Scale (BOS), a multidimensional measure that captures individuals’ behavioral tendencies to act as intermediaries, conciliators, and dividers. Six studies (N=1,723) explored the psychometric properties of the BOS (Studies 1a-1c) and investigated the effects of distinct forms of brokering on brokers’ social capital (Studies 2-4). The intermediary, conciliatory and divisive brokering orientations related differently to extraversion, agreeableness, perspective-taking, moral identity and Machiavellianism, among other individual differences. The effects of brokering on social capital varied as a function of the brokering orientation and the aspect of social capital. Intermediary behavior garnered status; conciliatory behavior promoted trust and prestige; and divisive behavior fueled brokers’ perceived dominance. Overall, the current paper elucidates the concept of brokering orientations, introduces a novel measure of brokering orientations, and explains how brokering behavior shapes brokers’ social capital.

Do investors exhibit behavioral biases in investment decision making? A systematic review

PurposeThe purpose of this paper is to study and describe several biases in investment decision-making through the review of research articles in the area of behavioral finance. It also includes some of the analytical and foundational work and how this has progressed over the years to make behavioral finance an established and specific area of study. The study includes behavioral patterns of individual investors, institutional investors and financial advisors.Design/methodology/approachThe research papers are analyzed on the basis of searching the keywords related to behavioral finance on various published journals, conference proceedings, working papers and some other published books. These papers are collected over a period of year’s right from the time when the most introductory paper was published (1979) that contributed this area a basic foundation till the most recent papers (2016). These articles are segregated into biases wise, year-wise, country-wise and author wise. All research tools that have been used by authors related to primary and secondary data have also been included into our table.FindingsA new era of understanding of human emotions, behavior and sentiments has been started which was earlier dominated by the study of financial markets. Moreover, this area is not only attracting the, attention of academicians but also of the various corporates, financial intermediaries and entrepreneurs thus adding to its importance. The study is more inclined toward the study of individual and institutional investors and financial advisors’ investors but the behavior of intermediaries through which some of them invest should be focused upon, narrowing down population into various variables, targeting the expanding economies to reap some unexplained theories. This study has identified 17 different types of biases and also summarized in the form of tables.Research limitations/implicationsThe study is based on some of the most recent findings to have a quick overview of the latest work carried out in this area. So far very few extensive review papers have been published to highlight the research work in the area of behavioral finance. This study will be helpful for new researches in this field and to identify the areas where possible work can be done.Practical implicationsPractical implication of the research is that companies, policymakers and issuers of securities can watch out of investors’ interest before issuing securities into the market.Social implicationsUnder the Social Implication, investors can recognize several behavioral biases, take sound investment decisions and can also minimize their risk.Originality/valueThe essence of this paper is the identification of 17 types of biases and the literature related to them. The study is based on both, the literature on investment decisions and the biases in investment decision-making. Such study is less prevalent in the developing country like India. This paper does not only focus on the basic principles of behavioral finance but also explain some emerging concepts and theories of behavioral finance. Thus, the paper generates interest in the readers to find the solutions to minimize the effect of biases in decision-making.

Financial Cycles and Credit Growth across Countries

In Coimbra and Rey (2017) we develop a dynamic macroeconomic model with heterogeneous financial intermediaries and endogenous entry. It features time-varying endogenous macroeconomic risk that arises from the risk-shifting behavior of financial intermediaries. We test empirically in a broad panel of countries the implication that credit creation is more elastic to funding costs when the distribution of leverage in the banking system is more positively skewed.

Innovation intermediaries and performance-based incentives: A case study of regional innovation poles

A growing number of innovation policies rely on publicly funded innovation intermediaries to provide knowledge-intensive services to firms, particularly small and medium-sized ones. The performance of innovation intermediaries is often assessed using indicators that need to be closely aligned with policy objectives to be effective. However, this alignment is difficult to achieve and is often overlooked in practice. We analyse the relationship between performance indicators and the behaviour of intermediaries by examining a case study of innovation intermediaries funded with public resources in Tuscany (Italy). The intermediaries implemented actions that allowed them to achieve their performance targets rapidly. However, due to a misalignment between indicators and policy objectives, these actions were not entirely consistent with the latter. After reviewing the literature on this key issue, we build on our findings to suggest how to design performance indicators that can induce intermediaries to more effectively support the achievement of policy objectives.

An Intermediation-Based Model of Exchange Rates

We develop a general equilibrium model with intermediaries at the heart of international financial markets. In our model, intermediaries bargain with their customers and extract rents for providing access to foreign claims. The behavior of intermediaries, by tilting state prices, generates an explicit, non-linear risk structure in exchange rates. We show how this endogenous risk structure helps explain a number of anomalies in foreign exchange and international capital markets, including the safe haven properties of exchange rates and the breakdown of covered interest parity.

Assessing the Determinants of Savings Behavior of Financial Intermediaries in Ghana: A Case of Ho Municipality

Assessing the Determinants of Savings Behavior of Financial Intermediaries in Ghana: A Case of Ho Municipality

Nonlinear Intermediary Pricing in the Oil Futures Market

We study the state-dependent trading behavior of financial intermediaries in the oil futures market, using structural vector autoregressions with Markov switching in heteroskedasticity. We decompose changes in futures price volatility into changes in the slopes of traders' demand curves and in the variability of their demand shocks. We find that the downward-sloping demand curve of intermediaries steepens significantly during turbulent times. Moreover, the variance of intermediaries' own demand shocks doubles during these episodes. These findings suggest that the futures pricing of intermediaries is nonlinear and increases the hedging costs of producers and processors of oil when volatility is high.

Does competition aggravate moral hazard? A Multi-Principal-Agent experiment

Abstract We conduct an experiment to determine whether market structure affects financial intermediary behavior. The intermediaries (Agents) are perfectly informed regarding project types and can recommend that their clients (Principals) either proceed or discontinue a project. Intermediaries earn revenues only when they recommend proceeding with the transaction. Thus, our design captures some of the incentives faced by financial advisers in commercial banks, where compensation depends on sales performance, and also by money-managers, whose income depends on the size of their portfolios. We find that a monopolist intermediary protects the interest of clients better than when intermediaries compete. Our results are robust to a significant fee increase and provide additional evidence on the impact of market structure on individual incentives and equilibrium outcomes.

Opportune Niches in Data Ecosystems: Open Data Intermediaries in the Agriculture Sector in Ghana

The role of open data intermediaries in an ecosystem broadly, and in the data chain specifically, is highly relevant – they may in fact be vital for a data chain to be fluid. There is a small but growing body of empirical-based research that analyzes the behaviour of open data intermediaries; empirical evidence that specifically focuses on the entrance of open data intermediaries into the ecosystem is even scarcer. The present study aims to reduce the scarcity of empirical fine-grained evidence concerning open data intermediaries and their emergence, in particular, their characteristics that enable them to enter into an ecosystem and to thrive in it. The analysis of the behavior of the two intermediaries located at the interface of open data in the agricultural and mobile-phone sectors in Ghana leads to the following conclusions: the emergence of intermediaries is primarily conditioned by the previous presence of a (broad) niche area, that is, in for order intermediaries to appear, there must be new spaces available in the ecosystem for them to occupy; a niche may be sufficiently broad to accommodate not a single specific intermediary but rather a range of similar yet distinct intermediaries that can populate different zones within the niche; each intermediary deploys the forms of the capital differently to connect to users successfully; given the extent of capitals which it possesses, each intermediary identifies a different area of the ecosystem where this capital would assure the highest return; a deficiency of certain forms of capital can also be appeased by linking to other intermediaries; the emergence and subsequent survival of the intermediaries importantly modifies the ecosystem which they have entered and populated; and open data intermediaries enhance flow of data in an ecosystem by sourcing, creating, mixing and curating data from multiple sources, both open and closed.

Competition and Credit Procyclicality in European Banking

This paper empirically assesses the effects of competition in the financial sector on credit procyclicality by estimating both an interacted panel VAR (IPVAR) model using macroeconomic data and a single-equation model with bank-level European banking data. The findings of these two empirical approaches highlight that an exogenous deviation of actual GDP from potential GDP leads to greater credit fluctuation in economies where: (i) competition among banks and, (ii) competition from non-bank financial institutions or direct finance (proxied by the financial structure) are weak. According to the financial accelerator theory, if lower competition strengthens the cyclical behavior of financial intermediaries, it follows that these endogenous developments in credit markets work to amplify and propagate shocks to the macroeconomy (Bernanke et al., 1999). Furthermore, since credit booms are closely associated with future financial crises (Laeven and Valencia, 2012), our results can also be read as evidence that greater competition in the financial sphere reduces financial instability, which is in line with the competition-stability view denying the existence of a trade-off between competition and stability.

Packing loops into annular cavities.

The continuous packing of a flexible rod in two-dimensional cavities yields a countable set of interacting domains that resembles nonequilibrium cellular systems and belongs to a new class of lightweight material. However, the link between the length of the rod and the number of domains requires investigation, especially in the case of non-simply connected cavities, where the number of avoided regions emulates an effective topological temperature. In the present article we report the results of an experiment of injection of a single flexible rod into annular cavities in order to find the total length needed to insert a given number of loops (domains of one vertex). Using an exponential model to describe the experimental data we quite minutely analyze the initial conditions, the intermediary behavior, and the tight packing limit. This method allows the observation of a new fluctuation phenomenon associated with instabilities in the dynamic evolution of the packing process. Furthermore, the fractal dimension of the global pattern enters the discussion under a novel point of view. A comparison with the classical problems of the random close packing of disks and jammed disk packings is made.

Crystallization of Anatase TiO2 in Niobium Potassium Phosphate Glasses

In this work, the glass forming ability was studied in potassium phosphate glasses with increasing amounts of TiO2 in order to obtain a glass-ceramic with photocatalytic properties. The first studied series has been the binary system (100-x) KPO3-xTiO2. Homogeneous and transparent glasses could be obtained with x varying from 10 to 30 mole%. Since the photocatalytic anatase phase could not be precipitated in this system, the ternary system KPO3-TiO2-Nb2O5 was investigated in order to incorporate higher TiO2 contents without spontaneous crystallization under cooling. Thermal properties of all glass samples were investigated by DSC and allowed identifying an increase of glass transition temperatures with increasing TiO2. For all compositions, exothermic events related with crystallization were also observed and suitable heat-treatments resulted in specific crystalline phases identified by X-ray diffraction. Selective precipitation of the anatase titanium oxide was successfully obtained from the glass compostion 35KPO3-25Nb2O5-40TiO2 (KN25T40) after heat treatment at 720°C for 2 h, suggesting the possibility of obtaining a glass-ceramic for photocatalytic applications. Structural investigations by Raman were also performed on glasses and glass-ceramics and allowed to point out the glass intermediary behavior of TiO2 in the phosphate vitreous network where TiO4 and TiO6 octahedra are inserted inside the phosphate network with TiO6 clusters identified at higher TiO2 contents. Raman analysis also identified anatase TiO2 in the KN25T40 glass-ceramic.

The Information Environment in China: Evidence from the Split Share Structure Reform

The information environment in China has been found to be so opaque as to prevent investors from being able to formulate valuations of companies based upon firm-specific information, a situation which promotes inefficiency in the allocation of resources in an economy and stunts its growth. The Chinese government has recently enacted reforms which change the status of previously non-tradable shares and which we predict will lead to improvements in the information environment. We test our prediction using measures of the behaviour and performance of information intermediaries in the Chinese stock markets – financial analysts. Examining a set of 4479 firm years from 2003-2014 allows us to document radical changes to the ownership structure of Chinese listed companies, with drastic reductions in State ownership and the tentative entry of foreign investors into the markets. Such changes are found to encourage more analysts to follow Chinese firms, and to enhance their ability to predict company performance. Our results enable us to conclude that a new era of transparency is emerging.

Adsorption of Propylene and Propane onto Mn+X (Mn+ = Cr3+ and/or Ni2+) Zeolites and Comparison between Binary and Ternary Exchanges

Mn+X zeolites (Mn+ = Ni2+ and/or Cr3+) were prepared and characterized by various techniques. The adsorption of propylene and propane onto these zeolites was investigated, and thermodynamic properties were discussed. The objective is to establish a comparison between the binary (introduction of Ni2+ or Cr3+ instead of Na+) and ternary (introduction of Ni2+ and Cr3+ instead of Na+) exchanges. To our knowledge, there is no work in this field, in spite of a growing interest in bimetallic zeolites. Isotherms of C3H6 and C3H8 were successfully modeled using the Toth equation. A change in KH, Henry’s law slope, confirms the strong and weak characters of the interactions with propylene and propane, respectively. CrNi(39)X has an intermediary behavior between Cr(39)X and Ni(40)X. It manifests specific interaction with C3H6 molecules through the deep implication of Cr3+ cations, at low coverage. With increasing adsorbate concentration, the contribution of Ni2+ occurs.

Payments for Environmental Services in a Policymix: Spatial and Temporal Articulation in Mexico.

Government based Payments for Ecosystem Services (PES) have been criticized for not maximizing environmental effectiveness through appropriate targeting, while instead prioritizing social side-objectives. In Mexico, existing literature on how the Payments for Ecosystem Services-Hydrological program (PSA-H) has targeted deforestation and forest degradation shows that both the process of identifying the eligible areas and the choice of the selection criteria for enrolling forest parcels have been under the influence of competing agendas. In the present paper we study the influence of the PSA-H multi-level governance on the environmental effectiveness of the program–the degree to which forest at high risk of deforestation is enrolled- building from a “policyscape” framework. In particular, we combine governance analysis with two distinct applications of the policyscape framework: First, at national level we assess the functional overlap between the PSA-H and other environmental and rural programs with regard to the risk of deforestation. Second, at regional level in the states of Chiapas and Yucatan, we describe the changing policy agenda and the role of technical intermediaries in defining the temporal spatialization of the PSA-H eligible and enrolled areas with regard to key socio-economic criteria. We find that, although at national level the PSA-H program has been described as coping with both social and environmental indicators thanks to successful adaptive management, our analysis show that PSA-H is mainly found in communities where deforestation risk is low and in combination with other environmental programs (protected areas and forest management programs). Such inertia is reinforced at regional level as a result of the eligible areas’ characteristics and the behaviour of technical intermediaries, which seek to minimise transaction costs and sources of uncertainty. Our project-specific analysis shows the importance of integrating the governance of a program in the policyscape framework as a way to better systematize complex interactions at different spatial and institutional scales between policies and landscape characteristics.

AIRLINE FARES: A COMPARISON BETWEEN SPANISH AND FRENCH TRAVEL AGENCIES

The existence of different types of intermediaries - e-tailers, traditional or offline retailers and multichannel retailers - engaged in the sale of airline tickets has enabled consumers to find different prices if they spend time searching for information. This has prompted internet marketing research to increasingly focus on the issue of pricing, analyzing the differences between these retailers with respects to price levels, price dispersion, pricing strategies, etc. Moreover, there are also studies examining the effects of culture on prices. However, there is no literature on the effects of the culture from the supplier point of view. This paper attempts to fill in the gap by studying whether the geographical locations of the travel agencies affect airline ticket prices. In particular, the study compares the price behavior of French and Spanish intermediaries operating exclusively online and those operating simultaneously in travel agencies and on the internet (offline and online). To this end, we consider three routes that connect Madrid, Paris and New York, with data starting four months prior to the departure date (December 16, 2013). The results show several differences in the price levels and price dispersion between intermediaries in relation to the type of retailer and their geographical locations.

Theoretical Paradigm on Bank Capital Regulation and its Impact on Bank-Borrower Behavior

Bank equity plays an important role in the credit allocation process of financial intermediaries. Financial institutions with higher level of equity are in better position to absorb losses and repay deposits in a timely manner. This relates to the bank capital channel of monetary policy transmission mechanism stating that banks having sound financial health could contribute significantly in transmitting monetary impulses to the real sector. Considering the important role that bank equity plays in shaping the risk taking behavior of financial intermediaries, central banks set the minimum paid-up capital requirement for banks and financial institutions. Though this regulatory requirement is aimed at ensuring the smooth financial intermediation, this could become costlier in extending loans particularly in the times of business cycle fluctuations. A higher capital requirement might also constrain the lending capacity of a bank. Given the conflicting theoretical assumptions on the role of equity capital on financial stability and economic growth, this paper develops a theoretical model examining the relationship between bank equity and its effect on bank-borrower behavior. The theoretical model recommends that higher level of bank equity might be helpful in ensuring financial stability by altering the behavior of the bank and borrower.

Effect of Zirconia Morphology on Hydrodeoxygenation of Phenol over Pd/ZrO2

This work studies the effect of zirconia structure on the performance of Pd/ZrO2 catalysts for hydrodeoxygenation of phenol at 300 °C and 1 atm using a fixed bed reactor. Benzene was the major product over Pd/t-ZrO2, while significant formation of cyclohexanone was observed over Pd/m-ZrO2. On the other hand, Pd/m,t-ZrO2 exhibited intermediary behavior. DRIFTS of adsorbed pyridine, NH3-TPD, and the dehydration of the cyclohexanol reaction revealed that the Pd/t-ZrO2 catalyst exhibits a higher density of oxophilic sites than Pd/m-ZrO2 and Pd/m,t-ZrO2. This promoted the formation of deoxygenated products. However, a mechanism involving dehydration of cyclohexanol to cyclohexene, followed by dehydrogenation to benzene, may not be ruled out. Pd/ZrO2 catalysts significantly deactivated as a function of time on stream. Results of dehydrogenation of cyclohexane and dehydration of cyclohexanol indicate that the Pd particle size increased and the density of oxophilic sites decreased during the hydrodeoxygenation of...