Investment Matters Research Articles

Budget-performance simulations: A Pedagogical example

Purpose: This paper has two main purposes, the first of which is to present a simple pedagogical example of budget-performance simulations that can be used for instructional purposes. The second purpose is to formulate a research hypothesis about the effects, on the overall performance, of (i) the overall level of physical and academic-managerial human capital investments and (ii) the allocation of resources between physical capital and academic-managerial human capital. Method: We have employed a system dynamics method so as to construct a simplified setup (model) where some pedagogically illustrative components of the budget are specified and linked to an elementarily exemplified performance function. We have then simulated the investment-based performance trajectories to demonstrate the findings of the paper. We have shown how to undertake a policy-based optimization as well. The method (system dynamics) we have chosen is suitable for the modeling of complexly-interwoven optimization and simulation processes. Findings: Through simulation and policy-based performance optimization exercises, we have demonstrated that the physical and academic-managerial capital investments matter and there exists an optimal allocation of resources that maximizes the university performance. Originality: There is a need for a comprehensive and in-depth examination/inquiry of the performance optimization and simulation processes associated with the higher education institutions. This article represents a modest contribution to such an inquiry.

Does intellectual property rights protection affect UK and US outward FDI and earnings from FDI? A sectoral analysis

PurposeDespite decades of research, the relationship between intellectual property rights (IPRs) and foreign direct investment (FDI) remains ambiguous. Using a recently developed patent enforcement index (along with a broader IPR index) and a large sectoral country-to-country FDI dataset, the authors revisit the FDI-IPR relationship by testing the impact of IPRs on UK and US outward FDI (OFDI) flows as well as earnings from outward FDI (EOFDI).Design/methodology/approachThe authors use disaggregated data for up to 9 distinct sectors of economic activity from both the US and UK for OFDI flows and EOFDI, for a panel of up to 42 developed and developing countries over sample periods from 1998 to 2015. The authors employ a panel fixed effects (FE) approach that allows exploiting the longitudinal properties of the data using Driscoll and Kraay's (1998) nonparametric covariance matrix estimator.FindingsThe authors do not find any consistent evidence in support of the hypothesis that countries' strength of IPR protection or enforcement affects inward FDI, or that sector of investment matters. The results prove robust to sensitivity checks that include an alternative broader measure of IPR strength, analyses across sub-samples disaggregated according to the strength of countries' IPRs as well as developing vs developed economies and an extended specification accounting for dynamic effects of the response of FDI to both previous investment levels and IPR (patent) protection.Originality/valueThe authors make use of the largest most granular sectoral country-to-country FDI dataset employed to date in the analysis of the FDI-IPR nexus with disaggregated data for OFDI and EOFDI across up to 9 distinct sectors of economic activity from both the US and UK The authors employ a more sophisticated measure of IPR strength, the patent index proposed by Papageorgiadis et al. (2014), which places emphasis on the effectiveness of enforcement practices as perceived by managers, together with the overall administrative effectiveness and efficiency of the national patent system.

Gender Impact on Personal Investment Strategies

Abstract Research purpose. This study is dedicated to investigating the peculiarities of personal investment decisions among female and male investors to analyse the gender differences that occur during personal investment strategy establishment processes. This study is based on the literature research and aims at exploring the existing knowledge on financial behaviour and gender influence on personal investment selection. The importance and originality of this study are that it assesses the collective evidence in the personal investment field and explores its processes through the prism of gender impact. The understanding of the gender bias impact on the personal investment strategy development process can play an important role in addressing the issue of gender inequality in finance and investment areas. This paper is dedicated to answering the question of how gender impacts personal investment strategies. Design/ Methodology/ Approach. The major task was to conduct the research on the male and female personal investment decision peculiarities presented in literature sources and to prepare the survey to conduct practical research while applying theoretical knowledge and presenting the findings along with the suggestions on how to improve the female situation in investment field. Findings. The most prominent finding to emerge from this study is that females lack knowledge and understanding in finance and especially investment areas; therefore, this leads to inadequacy in self-confidence in finance and investment matters and, as a result, neglect of successful personal finance management and, more significantly, poor investment strategy decisions. Originality/ Value/ Practical implications. The main goal of the current study was to determine whether the gender difference exists in personal finance and especially investment area, to refine the reasons behind this phenomenon, to analyse what could be done to improve the situation and introduce suggestions for further research. The research was done based on relevant literature, reports, surveys, statistical data used for literature analysis, and Lithuania’s case study for the practical part of the research. The primary objectives were to find out what are the main peculiarities between males and females when it comes to personal investment strategy choices and to analyse financial literacy and investment fields through the female perspective. The main points revealed during this study were that men tend to invest more often than women, as females, in general, prefer to save rather than invest; women tend to choose less risky investment strategies compared to men or save rather than invest. The main factors of this phenomena are the influence of cultural, social, or psychological factors, low financial literacy level, differences in economic status, longer life expectancy, the lack of confidence when it comes to knowledge applied to the financial decisions; males are more likely to choose a higher-risk investment strategy and to be more confident in their investment ability even if they have less knowledge on the matter. The analysis of Lithuania’s case has also confirmed the main literature review findings and reported females to lack financial and investment knowledge, spare funds and prefer to save rather than invest or invest into the low-risk tools.

Does Railway Lines Investments Matter for Economic Growth?

Abstract The $20.81 trillion U.S. economy relies on a vast infrastructure network to thrive; however, empirical studies that examined that impact of infrastructure on economic growth in the U.S. are limited. This study’s principal objective was to examine the effect of railway lines on economic growth using annual data from 1980 to 2016 and cointegration analysis. The results showed a positive and significant impact of railway lines on economic growth in the long-run and short-run. The impulse response analysis indicates that shocks to railway lines initially cause GDP growth rates to increase and decrease continuously. The variance decomposition analysis also suggests that overtime, railway lines contribute largely to the variations in economic growth followed by inflation and population. This study’s outcome has important implications not only for the U.S. economy but also for developing and emerging countries. The results suggest that railway lines investments matter for economic growth in the U.S.

Investment Literacy, Risk Tolerance and Mutual Fund Investments: An Exploratory Study of Working Adults in Kuala Lumpur

Financial literacy empowers consumers to make more informedfinancial decisions,including investing in mutual funds. In thisstudy,thesociodemographic profile of working adultswith low investment literacyvis-à-vis high investment literacyare examined first. Next, the impact of investment literacyand risk toleranceon the likelihood of investing in mutual fundsare explored. Among a sample of 260 working adults comprising mainly of Masters of Business Administration(MBA) studentsfrom a leading public higher institution in Kuala Lumpur, Malaysia, the study showsthat those withBusiness/Economics education backgroundshave the highest investment literacyand are more likely to invest in mutual funds compared to individuals from the Arts and other miscellaneous backgrounds. Although Muslims are the least literatein investment matters, they are more likely to hold mutual fundinvestments relative to those who profess Christianity and Hinduism. Individuals with relatively high income and occupational levels have relatively higher investment literacy. Risk tolerance does not influence the likelihood of investing in mutual fund investments.Policymakers should focus on females, those with Arts education background, Muslims, and those from the lower income/employment ranks to increase their investment literacythrough financial education workshops. Mutual fund companies may consider embarking an aggressive knowledge sharing videos related to mutual funds via non-mainstream mediasuch as social mediato increase the penetration of mutual fund investments, among the untapped markets.

Mental health and climate change – a developmental life course perspective

IntroductionClimate change is a major global public health challenge that will have wide ranging effects on human psychological health and wellbeing through the increased incidence of acute (e.g., storms, floods, wildfires), sub-acute (e.g., heat stress, droughts, lost agricultural yields) and long-term stressors (e.g., changes to landscapes and ecosystems). Children and adolescents are particularly at risk because of their rapidly developing brain, vulnerability to disease and limited capacity to avoid or adapt to climate change-related threats and impacts. They are also more likely to worry about climate change impacts than any other age group.ObjectivesTo produce a new conceptual framework that describes climate change-related threats to youth mental health from a developmental life course perspective.MethodsWe critically review and synthesis literature documenting the pathways, processes and mechanisms linking climate change to increased mental health vulnerability.ResultsWe show that climate change-related threats can additively and interactively increase psychopathology risk from conception onwards, that these effects are already occurring and that they constitute an important threat to mental health and therefore human capital worldwide. We then argue that birth cohort studies are uniquely positioned to examine climate change-related threats and that incorporating relevant measures into existing and planned birth cohorts is a matter of social justice and crucial long-term investment in mental health research.ConclusionsClimate change is affecting the healthy psychological development of children and these risks are increasing worldwide. New theoretical and empirical work is urgently needed so that threats can be tracked and mitigated.

An analysis of foreign direct investment and economic growth nexus: Does domestic investment matters

This study investigates the impact of foreign direct investment and domestic investment on economic growth in Nigeria between 1981 and 2018. The properties of time series variables were examined through the application of Augmented Dickey-Fuller and Philip Perron techniques in testing the unit root property of the series and autoregressive distributed lag model approach applied in testing the long-and-short run relationships. The results of unit root results suggested that there is a mixture of I(0) and I(1) variables in the model. The results of ARDL modelling revealed that foreign investment has a positive impact on economic growth in the long and short run, domestic investment has a negative impact on economic growth in the long and short-run while trade openness impacted positively on economic growth. It is the recommendation of this study that, concerted efforts should be made by the government, policymakers and relevant authorities to formulate policies that aim at creating a conducive investment environment so that Nigerians and non-Nigerian investors alike will be encouraged to increase their propensity to invest in the country. Policymakers should also take a step up in ensuring foreign exchange stability and improve trade openness, in order to achieve meaningful economic growth.

Wpływ czynników demograficznych na rozwój ekonomiczny

In this paper, an updated approach to evaluate the contribution of demographic factors to economic development is proposed. The forecasted shifts in public production were considered with respect to the institutional framework. The relationship between the main demographic variables and the economic growth for the sample of 45 advanced and emerging market economies from 1990 to 2017 was examined, applying the unbalanced panel data method. Over the period, in the sample, an essential increase in life expectancy adversely affected the real GDP per capita growth rate. The empirical investigation pointed out that the above demographic variable was strongly linked to nominal GDP per capita. In advanced economies, the examined demographic indicator was considerably higher than in emerging ones. We found out that an increase in the working-aged stratum substantially reduced the real GDP dynamics, but that interconnection was not robust. In the long-run, the institutional framework should be taken into account to achieve favorable public performance. Demographic variables should be forecasted and calibrated, regarding the endogenous economic triggers. Both public and private investments matter.

ARE IMPACTS OF EARLY INTERVENTIONS IN THE SCANDINAVIAN WELFARE STATE CONSISTENT WITH A HECKMAN CURVE? A META‐ANALYSIS

Abstract“Early intervention” has been a mantra in recent debates about human capital investment. Strong theoretical models motivate this focus by predicting that investment in children is most cost‐effective when they are young. The “Heckman curve” summarizes this idea visually (Heckman, 2006). However, hardly any reviews scrutinize this hypothesis empirically in modern welfare states such as those in Scandinavia that already invest heavily during early childhood. Any such review is ideally based on interventions conducted as randomized controlled trials (RCTs), set in the same welfare state, and comparable across ages through cost‐standardized effects. This meta‐analysis assembles cost‐standardized effect estimates from 10 RCTs, including a total of 18 intervention arms and 30,578 participants (aged 1.5–24 years), conducted by the same research center in the Scandinavian welfare state of Denmark. These interventions show significant effects relative to their costs, despite the large baseline investment level. Interventions targeted at younger children tend to produce larger effects, consistent with the Heckman curve. However, variation in the effect size within age groups is as large as it is across age groups. This indicates that both the quality and timing of investments matter and that “early interventions” are not necessarily superior to later interventions.

The Nurture of Nature and the Nature of Nurture: How Genes and Investments Interact in the Formation of Skills

It is widely recognised that genetics and family investments both matter for children's development. However, the two are often treated as separate factors where the higher importance of one implies a lesser role of the other. In this paper, we challenge this view and show that genes and family resources are closely interrelated in the process of skill formation. We incorporate genetic endowments into a dynamic latent factor model, as in Cunha and Heckman (2008). The model allows us to identify different genetic mechanisms and control for measurement error in skills and investments. To identify the independent effect of a child's genes, we explicitly control for parental genes. We exploit the fact that conditional on parental genes, variation in children's genes is random. Using a longitudinal British data set, the Avon Longitudinal Study of Parents and Children (ALSPAC), we document the importance of three distinct genetic mechanisms: the direct effect of child genes on skills, the indirect effect of child genes via parental investments (nurture of nature), and the effect of parental genes on parental investments (nature of nurture). Using two counterfactual simulations, we argue that the existence of genetic effects is not at odds with the value of social policies in reducing inequality in skills. In fact, we show that the relative importance of genes depends on how parental (or public) investments are allocated across children. Thus, skill disparities due to genetic differences may be mitigated via social policy.

Fiscal Rule in Africa

Abstract Fiscal policy has recently been encouraged to increase competition, monitor Africa’s debt to GDP and improve its economic growth. Importantly, the present fiscal situation in most African countries will seem to have significant consequences for both public and private investments. This paper examines whether fiscal policy and investment matters for GDP growth in a panel of forty-eight (48) African countries for the period 1970-2017. The empirical evidence explored is based on the Fixed Effect (FE) and System Generalised Method of Moment (GMM) estimators. The results suggest that public and private investment among selected African countries has a positive impact on GDP growth. The findings further indicate that fiscal policies must play a more prominent role in sustaining potential private and public investments, especially as debt servicing among the African’ countries examined may have serious shortcomings on sustainable economic growth

A Priority-Based Multistage PMU Installation Approach for Direct Observability of All Network Buses

The highly precise synchrophasor measurements obtained from the phasor measurement unit (PMU) are important for an effective implementation of a wide-area monitoring, protection, control, and self-healing (WAMPCAS) power system. The overall performance of the WAMPCAS power system can be improved if the PMUs are installed at all the buses in a transmission network. However, the multistage PMU installation is obligatory as PMU installation at all network buses is a matter of large-scale investment. Priority should be given to the important buses during the initial and intermediate stages to obtain relatively better observability. The optimal PMU installation (OPI) should be determined at the preliminary stage to measure the voltage phasors of all buses with the least number of PMUs. To evaluate the OPI problem, an improved binary shuffled frog leaping algorithm (IBSFLA) was proposed for the IEEE 118-bus test system. To enhance the overall performance of the IBSFLA and to obtain possible multiple optimal solutions (MOSs), an improved initialization and similarity-checking assessment were developed. A bus-observability maximization was mathematically modeled to select the best solution from MOSs, and the efficacy of the proposed algorithm was verified by comparing its performance with other algorithms.

Song sung true: performing the nation

ABSTRACTThis article examines the public life of Indian classical music before and after independence. It grounds the articulation of a classical music tradition – style and repertoire – within the nationalist cultural project and identifies important changes in the project after independence. These changes were largely tied to the assertion of regional identities and aspirations that occasionally disrupted the dominant nationalist imagination but by and large conformed to the same. This article tracks the formation of the nationalist cultural project spearheaded by new elites in colonial cities for whom the preservation and redefinition of the classical arts became a matter of serious investment. Music and performance formed an integral element in this as a result of which music appreciation societies came into being and grappled with the challenges of relocating traditional music practices associated with courts and salons in a new public setting. The process of relocation was tied up with the assemblage of new icons intended for performing the nation, a task that the independent Indian state continued with through its new mediums of information and communication.

Modern Growth in Perspective: Relative Performance Since the Global Financial Crisis

This paper evaluates the growth performance of more than 200 economies. It identifies instances of relatively strong economic performance after the 2008-09 global financial crisis, and asks if determinants of sustained strong (and weak) performance have changed in recent years. It finds that investment matters more for growth post-crisis; that the negative impact of debt-based financial development predates the crisis; and that economic openness and democracy now play a greater role in ensuring “average” growth outcomes.

Political participation in European welfare states: does social investment matter?

ABSTRACTThe role of the welfare state has expanded beyond passive assistance and decommodificaton. In many countries, social investment policies now actively encourage (re)integration into the labour market. While the effectiveness of these policies is debated, we know even less about their broader social and political effects. In this contribution, we explore the impact of social investment policies on one key aspect of social life: political participation. Combining insights from social psychology with institutional analysis, we investigate the impact of three social investment policies (early childhood education, secondary education, active labour market policies) on two disadvantaged groups: young individuals from low-skill backgrounds; and single parents. Combining the European Social Survey with data on social investment, we find that these risk groups have reduced political efficacy and political participation. Social investment policies can alleviate these participation gaps in some cases, but not all.

Corporate governance failures and the role of institutional investors in Pakistan

PurposeThis paper aims to analyse a current theme of international interest regarding the increasing role of institutional investors in corporate governance. The role of institutional investors is getting elevated in world’s corporate market day by day due to their large shareholdings and having expertise in investment matters. However, their role and importance has not yet been accepted and explored in Pakistan. Therefore, this paper fills this gap and explores their role in Pakistan’s corporate governance by using a comparative study as to the role of institutional investors in the UK’s corporate governance. This paper identifies the failures of corporate governance in Pakistan and explores how institutional investors can help to overcome these issues.Design/methodology/approachThis research paper uses a comparative approach based on documentary analysis. It conducts a comparative study of the role of institutional investors and the related code of corporate governance in Pakistan with that of the UK. It analyses the existing studies and the data relating to the role of institutional investors in Pakistan’s corporate governance and formulate recommendations to enhance the role of institutional investors for the betterment of corporate governance practices in Pakistan.FindingsThis paper finds that the role of institutional investors in Pakistan’s corporate governance is under-developed and the fund industry is immature. Though there is a considerable scope for them to work in Pakistan’s business market and play their role in the development of corporate governance in the listed companies of Pakistan. For this purpose, the guidance can be taken form the “Combined Code of the UK”. A number of recommendations have been formulated through which the role of institutional investors can be enhanced for the development of corporate governance practices in the business market of Pakistan.Originality/valueThis paper analyses the role of institutional investors in Pakistan to formulate recommendations through which this role may be enhanced for the development of corporate governance principles and practices in Pakistan. This paper fills a gap in the existing literature relating to the role of institutional investors in Pakistan, as there is a dearth of research in Pakistan concerning this issue. Further, it contributes to the on-going debate on the increasing role of institutional investors in corporate governance more widely.

A Forgotten Chapter in the History of International Commercial Arbitration: The Slave Trade's Dispute Settlement System

AbstractThis article is part of the ongoing efforts to write a critical history of international arbitration in commercial and investment matters. It examines the ways in which the Spanish crown and its concessionaries set up a mechanism to settle legal disputes pertaining to the transatlantic slave trade. The transformation ofasientos de negrosfrom limited royal contracts to large-scale monopolies awarded to foreign chartered companies during the sixteenth, seventeenth and early eighteenth centuries was accompanied by the creation of an international commercial arbitration system. Why was this system set up, how did it work, and what was its faith? The overall aim of the article is to invite international lawyers to rethink the history of international arbitration and pay closer attention to the ‘private’ dimensions of formal and informal imperialism. It also attempts to bridge the historical investigation and contemporary commentary. In the conclusion, I argue that this study allows us, in a mirroring effect, to question the idea that today's dispute settlement mechanism was conceived as a means to ‘depoliticize’ international investment law. What the introduction of arbitration achieves is to place some fundamental questions out of sight. Today, as in the past, arbitrators work from within the system; their work rests on a series of unspoken – and yet highly political – premises about the organization of economic life and the distribution of values.

PROCUREMENT OF LAND IN LEGAL SOCIOLOGICAL PERSPECTIVE

If all stakeholders of land provision adhere to the principles governed by the Constitution and the State Controlling Right, then the issue of the regulation of land will not be a national dilemma inheriting a prolonged conflict and not less as a result of the loss of life. Land is something sacred (magical) for people who have historical and spiritual value is not just a matter of investment and business commodities that have been going on, but the land is the right of the nation that has the value of the struggle that becomes the object of the interests of all parties, the people, government, and speculators. This research is expected to be an input to stakeholders to support the birth of Land Bank as an institution in charge of providing land for public interest. The research was conducted by using Sociological Juridical Method combined with Normative Juridical with a Qualitative Approach. It concerns the problem of access to the rule of law which cannot run properly, and legal culture is still low so that with the sociological and juridical approach. Those can be found the nature of the primary cause problematic of land supply in Indonesia, especially for the public interest and more specifically for the benefit of providing housing for low-income people.Keywords : Procurement of Land, Legal Culture, State Right Controlling, Land Bank

Why does the productivity of investment vary across countries

In ‘new growth theory’ equations that include the investment ratio, all other variables included are determinants of the productivity of investment. We convert a ‘new growth theory’ equation into a productivity of investment equation by dividing the equation through by the investment ratio. We take a sample of 84 developed and developing countries over the period 1980 to 2011, and examine the importance of 19 potential variables that might affect the productivity of investment, using a general-to-specific model selection algorithm. Education, export growth, macroeconomic stability, political rights, geography and government expenditure turn out to be the most important determinants. There is no evidence of diminishing returns to investment, so that investment matters for long run growth. JEL Classification: 011; 033; 047

Parental investment matters for maternal and offspring immune defense in the mouthbrooding cichlid Astatotilapia burtoni

BackgroundParental care, while increasing parental fitness through offspring survival, also bears cost to the care-giving parent. Consequentially, trade offs between parental care and other vitally important traits, such as the immune system seem evident. In co-occurring phases of parental care and immunological challenges negative consequences through a resource allocation trade off on both the parental and the offspring conditions can be predicted. While the immune system reflects parental stress conditions, parental immunological investments also boost offspring survival via the transfer of immunological substances (trans-generational immune priming).We investigated this relationship in the mouthbrooding East African cichlid Astotatilapia burtoni. Prior to mating, females were exposed to an immunological activation, while others remained immunologically naïve. Correspondingly, the immunological status of females was either examined directly after reproduction or after mouthbrooding had ceased. Offspring from both groups were exposed to immunological challenges to assess the extent of trans-generational immune priming. As proxy for immune status, cellular immunological activity and gene expression were determined.ResultsBoth reproducing and mouthbrooding females allocate their resources towards reproduction. While upon reproduction the innate immune system was impeded, mouthbrooding females showed an attenuation of inflammatory components. Juveniles from immune challenged mouthbrooding females showed downregulation of immune and life history candidate genes, implying a limitation of trans-generational plasticity when parents experience stress during the costly reproductive phase.ConclusionOur results provide evidence that both parental investment via mouthbrooding and the rise of the immunological activity upon an immune challenge are costly traits. If applied simultaneously, not only mothers seem to be impacted in their performance, but also offspring are impeded in their ability to react upon a potentially virulent pathogen exposure.