Lock-in Period Research Articles

Employee stock ownership plans and within-firm income inequality: evidence from China

Purpose Drawing on bargaining power and the inequality aversion perspective, this study aims to probe employees’ influence on addressing income inequality between top executives and nonexecutive employees. Meanwhile, it examines the moderating role of employee-related factors and plan attributes. Design/methodology/approach This study uses a staggered difference-in-differences design with a propensity scoring match approach and verification of the parallel trend assumption to test the hypotheses. Findings The results support the hypothesis that employee stock ownership plans (ESOPs) significantly reduce within-firm income inequality. The negative effect is amplified by both the presence of trade unions and the unemployment rate at the regional level, as well as the duration of the lock-in period and the scale of participants within the stock ownership plan. Practical implications This study has implications for income inequality research and ESOP design and provides theoretical support for policymakers and corporate governance. Originality/value This study contributes to the literature on income inequality by examining the implementation of ESOPs from the employee perspective. Furthermore, it extends the current literature by investigating the strengthening effects of regional factors and ESOP attributes on the relationship between ESOPs and income inequality. The conclusions provide new empirical evidence to promote the effective implementation of ESOPs by combining internal and external factors.

A Study on Investors Awareness on ELSS Tax Saving Schemes

Abstract: Investor’s awareness is a term used in investor relation, by public companies and similar bodies, to describe how well their investors and the investment market in general, know their business. Equity-linked saving scheme is an open-ended equity diversified fund, which provides a tax benefit to investors under section 80 C of the Income Tax Act, 1961. ELSS funds invest in equity and market capitalization across different sectors to achieve attractive returns. Being an equity fund, returns are dependent on the price movements of the stocks invested in and the market as a whole. ELSS funds have a lock-in period of 3 years from the date of investment. The objective of this study is to know the investors awareness on ELSS tax saving scheme. The sample size is limited to 150 respondents. Both primary and secondary data was used for the study. Primary data was collected through a structured questionnaire and secondary data was collected from books, journals and web sites. For analysing the collected data statistical tools such frequency, percentage, ranking method were used. The study concluded that the awareness and benefits of ELSS tax saving schemes.

Priority to unemployed immigrants? A causal machine learning evaluation of training in Belgium

Based on administrative data on unemployed in Belgium, we estimate the labour market effects of three training programmes at various aggregation levels using Modified Causal Forests, a causal machine learning estimator. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity in effectiveness across programmes and unemployed. Simulations show that “black-box” reassignment rules that respect capacity constraints on average, increase, respectively decrease, the time spent in employment, respectively unemployment, by more than one month within 30 months of programme start. A shallow policy tree delivers a simple rule that realizes about 85% of this gain.

Make IT Work: The Labor Market Effects of Information Technology Retraining in the Netherlands

The aim of this paper is to evaluate the effects of an active labor market program (ALMP) for higher educated workers in the Netherlands. The one-year program is characterized by six months of full-time IT retraining followed by a six-month internship. We estimate the effects of participating on earnings per month and working days per month. The results show significant lock-in effects during the program, lasting up to five months after program start. After this lock-in period, we find significant positive effects on earnings and working days. These positive effects remain significant until the end of the 36-month evaluation period. A conservative cost–benefit analysis based on the effects on earnings shows a return of 2.53% (95% CI 2.02–3.04%), which is low compared to the returns to education in the Netherlands of around 8%. We conclude that IT retraining has positive effects on the labor market outcomes of the participants yet relatively low returns.

A COMPARATIVE STUDY ON THE PERFORMANCE OF NIFTY 50 AND EQUITY FUNDS UNDER TIER-II OF NATIONAL PENSION SCHEME

The National Pension Scheme (NPS) is a defined contribution and a corporate pension fund that provides financial assistance to all Indian citizens. There are two types of accounts in the National Pension Scheme: Tier I and Tier II. Tier I is a mandatory deposit pension fund account and Tier II is a voluntary pension account. Tier I and Tier II is are consisted of different assets namely, equity, government security and alternative asset. The equity schemes are directly linked with the market. The return of all the fund managers in equity schemes are not same as the portfolio of all the fund managers are not same. Secondary data has been collected from respective websites of Pension Fund Managers and has been used to calculate mean, SD, Variance, and Correlation to predict the performance of equity funds. ANOVA and T-test have been for assessing the comparative analysis of the different fund managers under equity scheme in tier II. As per the study, LIC PF and ICICI PF are the best performer during the study period. The performance of SBI PF is poor among other equity funds under Tier-II of NPS during the study period. In term of risk, LIC PF is the higher risky equity fund and UIT PF is the lowest risky equity fund under Tier-II of NPS. It can be said that investors need to be high-risk taker to invest in that LIC PF. Through the risk analysis during said period of time, it is found that the ability to observe risk differs in equity funds under Tier-II of NPS. The main reason for this being a voluntary account of Tier -II. As there is no lock-in period in this account, the investors mostly use for a short-term purpose. In the recent decision of the government, Tier-II offers a lock-in period for 3 years with tax benefit. This decision may be affected the investment pattern of the investors. KEY WORDS: - National Pension Scheme, Performance, Equity Scheme, Nifty 50

THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY AND WORKING CAPITAL MANAGEMENT ON SMES PERFORMANCE DURING A PANDEMIC

The main purpose of the study is to examine the impact of corporate social responsibility (CSR) and working capital management practices on the performance of small and medium-sized firms (SMEs) in Kosovo during the lock-in period. In addition, the aim of the study is to investigate how employee behavior affects the relationship between corporate social responsibility, working capital management and the performance of small and medium-sized enterprises. A quantitative research method is used to obtain the necessary data. Respondents are employees of small and medium-sized businesses currently working in Kosovo, and surveys are mailed and in person. The PLS-SEM method was used to examine whether there is a statistically significant relationship between corporate social responsibility, working capital management practices, and SMEs performance. The relationship between corporate social responsibility, working capital management and financial success was investigated using a quantitative research method. The study found a significant correlation between corporate social responsibility (CSR), working capital management practices and the success of small and medium-sized enterprises (SMEs) in Kosovo. The data also showed that employee behavior plays a mediating role in the relationship between corporate social responsibility (CSR), working capital management practices and the performance of small and medium enterprises in Kosovo, according to the results. Significant gaps in the work have been identified as a result of inconsistent application of financial criteria by businesses that define sustainability. In addition, the study contributes to the preservation of enterprise valuation standards by providing guidance for small business owners and operators.

Investigation on aerodynamic force nonlinear evolution for a central-slotted box girder under torsional vortex-induced vibration

Central-slotted box girders are widely employed in long-span bridges owing to their advantageous flutter stability. However, the existence of a central slot can degrade their performance under vortex-induced vibrations (VIVs). To clarify the aerodynamic characteristics of a typical central-slotted box girder during VIVs, sectional model wind tunnel tests involving the synchronous measurement of pressure distributions and VIV responses were performed. The computational fluid dynamics (CFD) technique was also used to demonstrate the flow pattern development during VIV before qualitatively explaining the VIV mechanism of the central-slotted box girder. The surface pressure distributions at various amplitude-dependent VIV stages were measured and examined. The evolution of the aerodynamics was investigated from the perspective of the work done by the vortex-excited force (VEF). It was found that the aerodynamic effects on a central-slotted box girder during VIVs are featured with apparent nonlinear evolutionary characteristics. During the lock-in period, the wind-induced pressures at both upper and lower surfaces of the downstream box and the pressures at upper surface of the upstream box make greater contributions to the VEF, which are the main excitation sources of the torsional VIV. However, the contributions of the downstream and upstream boxes are opposite, showing positive and negative correlations with the VEF, respectively. It demonstrated that the positive contribution of the pressures at both upper and lower surfaces of the downstream box weakens the VIV performance of the central-slotted box girder as compared with a streamlined box girder. In addition, the central slot, which improves the correlating flow between the upper and lower regions around the downstream box, causes the distributed aerodynamic forces in these regions to enhance the VEF and perform positive work. This provides a reasonable explanation as to why the VIV effects of central-slotted box girders are typically stronger than those of streamlined box girders.

The effects of an education-leave program on educational attainment and labor-market outcomes

ABSTRACT I study the effect of an education-leave subsidy for the employed on labor-market outcomes and educational attainment using Finnish administrative linked employer-employee panel data and matching methods. The adult education allowance is available to employees with at least eight years of work experience and allows them to take a leave for 2–18 months to participate in an education program. I find large positive treatment effects on educational attainment and changing occupation. The treatment effects on earnings and employment are negative during the lock-in period and close to zero afterward. The effects are more positive for the less educated.

The Effect of Shortening Lock-in Periods in Telecommunication Services

In this research note, we study the welfare implications of shortening the length of the lock-in period associated with triple play contracts using household level data, from a large telecommunications provider, for a period of 6 months. Using a multino

Stamp Duty Policy, Housing Speculation, and Property Market Dynamics

Imposing a property tax is a common measure that governments take to regulate speculative real estate activities; however, its effectiveness in cooling market prices is not clear. Starting in 2010, the Hong Kong government introduced a series of Special Stamp Duty (SSD) policies to curb property flippers. We find that although the SSD effectively curtailed flipping transactions from 21.1% in 2010 to 1.3% in 2013, it failed to cool the market price. Primary and secondary property prices increased by 5.7% and 1%, respectively, 1 year after the introduction of SSD. As SSD effectively increased selling costs and prolonged potential sellers’ holding period, supply from the secondary market dried up and homebuyers were crowded into the primary market. Moreover, the influx of homebuyers from mainland China further crowded out local homebuyers, especially in the primary market, in which mainland buyers’ presence increased from 5.6% in 2009 to 19.7% in 2011. Prior to the SSD, local homebuyers enjoyed a 3% discount over mainland buyers in the primary market. However, this price advantage was diminished due to more intensive competition after the SSD. We also investigate flippers’ responses to SSD policies with respect to their holding period. We find that flippers deferred sales until the stamp duty lock-in period ended, then urgently sold the properties at a discount. Further, those who sold within the lock-in period strategically reduced their selling price. Overall, our paper sheds light on the implications of stamp duty policy on speculative activities and real estate market dynamics.

Priority of Unemployed Immigrants? A Causal Machine Learning Evaluation of Training in Belgium

We investigate heterogenous employment effects of Flemish training programmes. Based on administrative individual data, we analyse programme effects at various aggregation levels using Modified Causal Forests (MCF), a causal machine learning estimator for multiple programmes. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity across programmes and types of unemployed. Simulations show that assigning unemployed to programmes that maximise individual gains as identified in our estimation can considerably improve effectiveness. Simplified rules, such as one giving priority to unemployed with low employability, mostly recent migrants, lead to about half of the gains obtained by more sophisticated rules.

Priority to Unemployed Immigrants? A Causal Machine Learning Evaluation of Training in Belgium

Based on administrative data of unemployed in Belgium, we estimate the labour market effects of three training programmes at various aggregation levels using Modified Causal Forests, a causal machine learning estimator. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity across programmes and unemployed. Simulations show that 'black-box' rules that reassign unemployed to programmes that maximise estimated individual gains can considerably improve effectiveness: up to 20 percent more (less) time spent in (un)employment within a 30 months window. A shallow policy tree delivers a simple rule that realizes about 70 percent of this gain.

The Marriage of Technology, Markets and Sustainable (and) Social Finance: Insights from ICO Markets for a New Regulatory Framework

It is generally agreed that gaps in sustainable and social finance should be met by increased marketization. However, there are significant challenges in galvanising the investment community used to conventional securities and other investment market instruments. Our article proposes using technological innovations in fund-raising, observed in the initial coin offerings (ICOs) market, to transform the asset class of sustainable and social finance in order to achieve greater marketization, creating an integrated form of social-commercial value for a variety of different investors, from conventional to crowdsourced marketplaces. Key to our proposal is the innovation of tokenisation introduced in ICOs. We argue that tokenisation holds transformative potential for restructuring investment opportunities, as assets need not be tied to the expectations and obligations of conventional financial value creation. Tokens can offer different classes of financial and non-financial rights and rewards. We propose that sustainable and social finance can be raised by corporate structures dedicated to sustainable or social purposes, as dual-class offerings. One class of tokens allows holders to commit to the sustainable or social ends and exercise governance rights as part of their investment. Such token-holders are also expected to be long-term investors and subject to lock-in periods, in order to support the ultimate fulfilment of the sustainable or social project. The other class of tokens would carry no governance rights but be immediately tradeable. This class of tokens likely attracts more transient investors but would provide an important source of finance for sustainable and social projects. The success of ICOs reflects the importance of market conditions and liquidity for this class of investors and we make some proposals as to how such markets can be made more robust by appropriate regulation.

Three years of AstroSat: Indian Astronomy mission

The AstroSat is India’s first multi-wavelength satellite dedicated for astronomy. It carries five scien-tific payloads covering a wide wavelength range (from visual/ultraviolet to high energy X-rays) and an auxiliary payload for monitoring in-situ charged particles. In this paper we describe the mission, the scientific payloads and a few important results from the AstroSat. The AstroSat is a proposal driven mission open for international users. The data is made public after a lock-in period of twelve months. We give a detailed description of the procedure to access archival data of the AstroSat. AstroSat has successfully completed three years in orbit and continues to yield valuable science data.

ELSS Mutual Fund Preferences of Indian Tax Savers

Tax planning strategies are important for tax payers whose aim is to reduce their tax outgo on various types of income and capital gains. While there are several tax saving instruments that qualify under Section 80C of the Income Tax Act, 1961, Equity Linked Savings Scheme (ELSS) has a special importance. It provides the least possible lock-in period among all tax saving instruments besides providing equity asset investment exposure making it a good long-term tool for wealth creation. This paper studies the investment behaviour of a typical ELSS mutual fund investor. Primary data is used to identify preferences of tax saving instrument by Indians and to understand if diversification across multiple ELSS schemes is done. Understanding the mode of investing helps us get insight on investor behaviour. Finally, we get to know if ELSS is being used by other family members. Secondary data study allows us to understand the trends and dynamics of ELSS. Our study checks scheme Average Assets Under Management (AAUM) data to understand if investors delay and thereby hurry their investing just before closing of the financial year. These findings are of significance for Asset Management Companies (AMCs) in their product positioning and building promotional strategies. Market regulator SEBI and the Association of Mutual Fund Industry (AMFI) can use it to improve the product offering and expanding its reach. Government and Ministry of Finance can use these findings for tweaking tax laws so as to promote investment culture.

The Case for Longer Mortgages: Addressing the Mismatch between Term and Amortization

The practice of offering maximum residential mortgage maturity terms of five years, even though amortization periods generally range from 25 to 40 years, is predominant in Canada. This mismatch between mortgage term and amortization creates a need to re-finance or renew the outstanding balloon payments at each maturity of five years or less. It also creates a twofold risk: first, that the lender would choose not to renew the loan if the fair market value of the mortgaged property is less than the principal amount and accrued interest of the loan (or that the lender is unable to renew the loan if it is insolvent), and, second, that the borrower might not find a new lender. At that point, mortgage enforcement might be necessary, and investors would suffer losses. This mismatch, therefore, impedes the development of a market for Residential Mortgage-backed Securities for uninsured mortgages – often referred to as “private label RMBS.” With private label RMBS, the investor – typically an institutional investor such as a pension fund, investment fund, mutual fund and insurance company – would invest directly in a pool of uninsured mortgages without any government backing for repayment. The development of such a market would provide a funding alternative that might enable the federal government to tighten further the requirements for government support of residential mortgages through the CMHC’s securitization programs. Furthermore, it could also lead to further competition in the mortgage market by providing a funding source for mortgages that do not conform with CMHC requirements for insurance or those of the Office of the Superintendent of Financial Institutions (OSFI) applicable to federally regulated financial institutions. This Commentary argues that the best way to address the refinancing risk arising from the term and amortization mismatch would be to facilitate the introduction of a residential mortgage product that does not mature every five years, but matures when it is fully amortized. This product could include an interest rate reset and penalty-free right of redemption at least every five years. Under the current state of the law this can be achieved only by amendment to Section 10(1) of the Interest Act. If Parliament decides to amend Section 10(1), it should also consider lengthening the five-year penalty free redemption right to up to 10 years, thus making it easier for lenders to offer longer-term fixed-rate mortgages to borrowers who would prefer a longer interest rate lock-in period – a move that would also encourage the development of the private label RMBS market in Canada.

Real Estate Investment Trends in Unauthorised Colonies: A Case Study of Sangam Vihar, New Delhi

In recent years, Delhi has had an explosive growth in terms of economic development and population growth. Major contributor being In-Migration of poorer sections of society coming to Delhi for better employment opportunities. Hence there is a growing shortage of housing in the city. The apex body DDA, has not been able to provide planned and legal housing options for the people, especially the poorer section. This study is an investigation to unravel the Real estate market in the colonies wherein such sections of society has opted to build their houses, however it being in an illegal manner. The study is based on the parameters of investment, such as, Size of investment, plot sizes, Liquidity of buying and selling period, Lock-in period for the investment, the FAR built-up in these colonies. Other parameters include Net Annual income (rental) Type of accommodation available for rent, duration of stay of the tenants, size of investment- post purchase. The Average rate of return based on the lock-in period and the size of investment. These parameters along with the advantages have pronounced these UACs as a very good investment option among small and medium investors, besides being a good housing option.

An innovative approach to mitigating horizon mismatch

Purpose This paper aims to propose an innovative approach to risk measurement for the abolition of selection bias arising from the specious selection of different horizons for investment and risk computation of equity-linked-saving schemes (ELSS). Design/methodology/approach ELSS has a lock-in period of three years, but shorter horizons’ (daily/weekly/monthly) return data are preferred, in practice, for risk computation. This results in horizon mismatch. This paper studies the consequences of this mismatch and provides a noble solution to diminish its effect on investors’ decision-making. To accomplish this objective, the paper uses an innovative methodology, maximal overlap discrete wavelet transformation, to segregate the price movements across different horizons. Risk across all horizons is measured using Cornish-Fisher expected shortfall and Cornish-Fisher value-at-risk methods. Findings The degree of consistency of risk-based rankings across horizons is examined by means of the Spearman and Kendall’s rank correlation tests. The risk-based ranking of ELSS is found to vary significantly with the change in investor’s horizon. Precisely, the rankings formulated using daily net asset values are significantly different from the rankings developed using fluctuations over longer horizons (two-four and four-eight years). Originality/value This finding indicates that the ranking exercise may mislead investors if horizon correction is not done while developing such rankings.

Compensation and Penalty Imposed on Debt Settlement of Islamic Products

As the conventional system has been established ever since, the concept of penalty plays an important role in the conventional system at least to secure the financiers from being manipulated by the financees. However, the classical Muslim jurists prohibited such a type of penalty to be imposed on any Islamic debtbased transaction since it would involve an element of usury (riba). The purpose of this paper is to extend the examination on debt settlement compensation and penalty, and their compliancy with shariah law. The study was then conducted within the ambit of two sacred revelations and the rest of reasoning principles in usulfiqh as well as Islamic legal maxims. The findings show that the compensation (ta’widh) and penalty (gharamah) might be imposed by Islamic financial institutions on early settlement within lock-in period and on delayed payment. In addition, discretional rebate (ibra’) might be given to the early settlement after the lock-in period. The limitation of this study is that it just focuses oncompensation and penalty, and concentrates only on Islamic financial system.

Warrants in Underwritten IPOs

We examine the use of warrants as part of the brokers’ Initial Public Offerings (IPOs) compensation package in a regulatory environment that is very different from that of the United States (US). While, in the US, the use of warrants is constrained by regulatory requirements regarding the exercise price, the lock-in period and a minimum value for the warrant, the London Stock Exchange (LSE) carries none of these regulatory constraints. The LSE therefore, offers a perfect laboratory in which to study the unfettered use of non-cash compensation (i.e. warrants) to IPO brokers. Our results show that UK IPO firms that issue warrants to their brokers are riskier and are underwritten by reputable brokers. Interestingly, warrant issuers do not minimise their total costs of going public. They incur an underpricing and a total broker compensation of 23.3% and 5.6% respectively. These costs would have been 5.4% and 3.4% had warrants not been used. The results also show that, on average, brokers enhance their underwriting fees by about 75% as a result of the warrants being part of the compensation package. These findings contradict that of Dunbar (1995), who reports that riskier companies can minimise their costs of going public through the use of warrants. Dunbar (1995) argues that the Financial Industry Regulatory Authority (formerly known as National Association of Securities Dealers) in the US should relax the regulations underlying warrants compensation as they are unnecessarily restrictive. In contrast, our findings suggest that underwriters operating in an environment with no regulatory constraints regarding the use of warrants appear to misuse their monopoly power and overcharge IPO firms for their services.