Investment Matters Research Articles

ANOTHER VIEW OF THE J-CURVE

Most of empirical studies find evidence of the J-Curve, but recent results cast doubt over its standard explanation. By addressing the countercyclicality of the current account and its dynamic link with the terms of trade, this paper revisits the J-Curve phenomenon using a two-good dynamic optimizing small open economy model allowing for a habit-forming behavior and capital adjustment costs. While the nonmonotonic adjustment of the current account relies on the degree of habit persistence in consumption and the magnitude of capital installation costs after an unanticipated terms of trade worsening, we show that the sizes of the long-run intertemporal elasticity of substitution under time nonseparable preferences and the import content of real consumption and investment matter as well after a temporary perturbation. As a consequence of an intertemporal speculation effect and an inertia effect, the small country reaches the long-term equilibrium with higher foreign assets after a short-lived terms of trade worsening.

Asymmetries in the Social Responsible Investment Agendas: From an NGO Driven World to a Stakeholders Dialogue.

NGOs have taken a dom inant position in setting the agendas of Corporate Responsibility and Socially Responsible Investment matters, thereby skewing the efforts of corporates to limit negative externalities towards their own agendas. As the latter remain to a certain extent unpredictable, corporates must deal with an informati on asymmetry. This situation can be explained by the historically defensive nature of Corp orate Responsibility codes established by companies under pressure of the NGOs. In this paper, I contend that only a new approach to Corporate Responsibility co uld reverse this asymmetry: one where the social responsibility matters are articulated in a political debate between all stakeholders of a company and wh ere conflicting interests are addressed in a deliberative process. To this end, the corporate world and the NGOs need to understand the need for a larger debate that includes all relevant stakeholders defined as the Public in the sense of Dewey. Latour and the Actor-Network theory provide us with a workable fr amework to structure such a dialogue, where participants have the authority and legitimacy to speak for the Public.

Commodity Trading Advisors: Are They a Threat for Futures Commodity Markets?

Nowadays commodity investing is facing a tremendous interest from all kinds of investors, the surging amount invested in commodity related indices being one of the manifestations of this phenomenon. Due to their historical de-correlation with conventional securities and their hedging properties against inflation, commodity investment is being perceived as a true asset class. Therefore, the question of commodity investment is of interest for investors but also for academics. As a consequence, there had been a common statement that the commodity price rally of the last 10 years is largely due to new operators in the futures markets. The economist point of view on that issue was to question if the speculators side had affected those markets. As a matter of fact alternative investment, encompassing CTAs CPOs and Hedge Funds, had been criticized for their presumed bad impact on the commodity futures prices. This paper will not seek to find a clear-cut answer to the ancestral economic question of the financial operators increasing the risks in futures markets. The aim of this paper is to demystify one the historical actor of the futures markets whom are often misunderstood by non-financial actors. Using quantitative methods (multifactor models and rolling style analysis windows) we find that CTAs seem to have a relatively low exposure to commodities futures. We also try to define the causality relation between those whom are liquidity provider and liquidity user using the CFTC data on open interest from major futures contracts. Using Variance Decomposition and Granger causality test, on a sample of the major contracts, we find that non commercial investors seemed to enter the future market after a change in commodity prices not the other way around, playing therefore the role of liquidity provider for most of the commodity analysed in this study.

Commentary on the Doha Round: Institutional Issues

Commentary on Robert Howse's article "WTO Governance and the Doha Round." Debra Steger is Executive in Residence at the University of Ottawa Faculty of Law where she is working to establish a new institute for international law, economy and security in Canada. Previously, she was Senior Counsel with Thomas & Partners, a law firm specializing in international trade and investment matters. From 1995-2001, she served as the founding Director of the Appellate Body Secretariat of the World Trade Organization in Geneva, Switzerland, during which time she helped to establish the Appellate Body as the first appellate tribunal in international trade. She is Chair of the Trade and Customs Law Committee of the International Bar Association, and has been on the executive of the Trade Committee of the International Law Association for the past 10 years. She is also a member of the Editorial Advisory Board of the Journal for International Economic Law. She participates on the Advisory Council of the UNCTAD Project on Building Capacity through Training in Dispute Settlement in International Trade Investment and Intellectual Property as well as the Governing Council of the World Trade Law Association. During the Uruguay Round of Multilateral Trade Negotiations, she was the Senior Negotiator for Canada on Dispute Settlement and the Establishment of the World Trade Organization as well as the Principal Legal Counsel to the Government of Canada for all of the Uruguay Round agreements. From 1991—1995, she was General Counsel of the Canadian International Trade Tribunal in Ottawa, the agency responsible for administering the antidumping, countervail, safeguards, and government procurement legislation in Canada. Her most recent book is entitled: “Peace Through Trade: Building the WTO” which was published by Cameron May International Legal Publishers in 2004. Steger holds an LL.M. from the University of Michigan Law School, an LL.B. from the University of Victoria Faculty of Law, and a B.A. (Honours) in History from the University of British Columbia.

Investment Considerations under the Prudent Investor Act

In Part Two in a series on fiduciary investment matters, the author focuses on how portfolio choice interacts with trust distribution policies to produce wealth flows to current and future trust beneficiaries. The author first frames the discussion through an examination of portfolio effects on beneficiary wealth during an extended period of historical returns. Next, the author examines whether different distribution choices, from simple income-only choices to more complex unitrust methods, can significantly impact wealth flows to beneficiaries. The author finds that in terms of wealth effects to all parties, portfolio choice dominates distribution policy choice over the period examined, although distribution policy can mitigate year-to-year variations in wealth flows. This conclusion leads to a recommendation that fiduciaries should move beyond the traditional balanced portfolio to incorporate asset classes that have a higher risk-return profile to ensure long-term portfolio performance.

Trends in international business thought and literature (supplement): The transatlantic business dialogue: Business at the negotiating table

AbstractThe Transatlantic Business Dialogue (TABD) is a novel coalition of American and European business leaders who seek to influence their respective governments on transatlantic trade and investment matters. In the past year, the TABD has emerged as a powerful voice in setting the agenda for the “transatlantic marketplace.” This article examines the TABD's origins and development, and suggests that the TABD may serve as a future model for trade and investment negotiations.

The Impact of Highway Investment on New Manufacturing Employment in South Carolina: A Small Regional Spatial Analysis

A geographical information system (GIS) is used with econometric methods to develop a small region spatial model to analyze the linkage between highway investment and new manufacturing employment in South Carolina. OLS estimates of the spatial model indicate that increases in four-lane highways, as well as interstate access, and two-lane highway density stimulate new manufacturing firm employment. Regions with higher than average employment density (a proxy for agglomeration economies) consistently influence employment gains as well, however. An implication for state and local policymakers is that the location, timing, and type of highway investment matter concerning whether highway investment serves as an economic development aid. Comparison of nonspatial and spatial model results indicates that development of small region models incorporating spatial statistical concerns should be pursued further.

Une typologie des exploitations agricoles du RICA suivant la structure de leur bilan

When we question ourselves about the behaviour of the farms in the matter of investment and financing, the analysis of balance sheets is precious because in a way they provide a « summary » of the past behaviour of the farms. But this analysis is done only according to the type of farming, the size classes of holding or, more rarely, the localization. So, it has been seemed interesting to build a typology of professional farms based on the homogeneity of their balance sheet structure, using, with the sample 1 of the FADN 1981 , a methodology already used for industrial firms. The results seem to be conclusive and they were enriched by structural data and analysis of the sources and dispositions of funds, for every class so definite, always for the only year 1981. So it has been possible to built an outline describing the behaviour of farm classes in the matter of investment and financing and suggesting an overall forecast about these farms ; however this outline must be considered as a sketch intended to guide future works and not as the outcome of a research.

The Efficient Market Theory of Share Price Behaviour

Over the past fifteen years there has been a lot of research into the behaviour of share prices. This has largely involved investigating whether share prices were predictable by mechanical means and whether any class of investors has had consistent and substantial success in investment matters. The main researchers involved in these studies have been (a)academics, who were interested in determining the efficiency of stockmarkets in socio‐economic terms and (b) practising investors and investment advisory firms, who sought to derive profitable investment strategies. Perhaps not surprisingly the published results of the two categories of researchers tended to clash with investors claiming success for their methods whilst the academics have in general refuted their claims. Greater reliance can be placed on the academic investigations however as apart from their disinterested positions and their generally superior research methodologies, they have tested all the publicised “profitable” investment strategies.

Development of Automated Large Scale Mapping at the Survey Department, of “Rijkswaterstaat”

During the past four years a system for digital large scale mapping from the photogrammetric model has been developed. In the beginning only readily available equipment was used, but gradually new instruments have been acquired that are better fitted to the task. The necessary software was provided by programmers within the Department. The system has been developed, according to the special needs of the Survey Department, although it would be relatively easy to adapt to other types of mapping. Digital mapping is quite successful and now accounts for about 25 per cent of all mapping. As the principle of digital mapping has been fully accepted, extension of the method is mainly a matter of investment in equipment, training of personnel and organisation.

Development of Automated Large Scale Mapping at the Survey Department, of “Rijkswaterstaat”

AbstractDuring the past four years a system for digital large scale mapping from the photogrammetric model has been developed. In the beginning only readily available equipment was used, but gradually new instruments have been acquired that are better fitted to the task. The necessary software was provided by programmers within the Department. The system has been developed, according to the special needs of the Survey Department, although it would be relatively easy to adapt to other types of mapping. Digital mapping is quite successful and now accounts for about 25 per cent of all mapping. As the principle of digital mapping has been fully accepted, extension of the method is mainly a matter of investment in equipment, training of personnel and organisation.

Propulsion Systems for Space Operations: A Forward Look

Spacecraft propulsion is the area needing expansion of capabilities over the next several years. The capability for lofting large payloads (up to one-quarter million pounds) into space is virtually in hand. The ability to transport payloads and men in the space arena, to conduct rendezvous maneuvers, and to orbit and land on the planets, as well as the moon, now needs implementation in better and more efficient machinery. Transporting men to the planets is feasible with systems already demonstrated. Their development is a matter of decision, investment, and time.

Special Problems in Public Relations

PERHAPS one of the special investment problems of the state university is to become more like the successful endowed colleges in its attitude and operations. I shall not limit my remarks to this one statement, but I think it may be central. The problems of a state university in investment matters differ from those of the endowed colleges in several respects, which are intermingled in their effect. These may be briefly stated as the size of the fund, amount of legislative control, federal obligation, and obligations to a different ownership. It is quite possible that the general form of legislative control or the activities of the university itself in its investment matters may stem from the first Morrill Act, sometimes called the Land Grant Act, of I862. By that Act, each state, or through each state the university designated as a state university in each state, was given 3o,ooo acres of public land for each senator and representative, and the provisions of the sale of this land were set forth. Quite probably this was the first endowment of many of the state universities. Indeed, many of the state universities did not exist in I862, and those which did exist were small in size. The endowment created by this grant was required to be invested in bonds of the United States or of the states, or in some other safe bonds. If the state had no bonds, the legislature could direct the investment in any manner which would yield a fair and reasonable return on investments, and the principal thereof was to be forever unimpaired. It is quite apparent that this set the general pattern for the investment of state university funds, and state governments which had legislative control over all the affairs of the university have been slow to release this restriction. And, in general, they have not released the restriction insofar as it affects the money received from this particular grant. As time goes along this ceases to be a significant matter with the larger state universities. For example, in the case of the University of California, the socalled Federal Endowment Fund of the proceeds of this land, together with the proceeds from two other smaller grants, now represents only a little over i per cent of the total book value of the permanent endowment fund. Whether or not these funds are kept invested in bonds does not have a significant effect on our university, but it does have a very significant effect for many of the other universities. The annual report by Vance, Sanders & Company entitled Brevits, which lists college endowment funds, lists only ten state universities. Provided Cornell University, which is the state university in agriculture and a few other departments, and the University of Pennsylvania, which receives some support from the state, are not regarded as state universities, the number falls to eight. Another which should be eliminated is the University of Texas, which has benefited so much from its west Texas oil lands that it has a fund larger than any other state fund. The University of Illinois should be omitted, since it does not have a large fund compared to the funds represented here. Finally, Rutgers was mentioned, but it was formerly a private university and probably has not had the influences that have been brought to bear upon the investments of the other state universities. With these eliminations, the information presently at hand would indicate that there are perhaps only six state institutions of higher education that have endowment funds exceeding $io million. The pattern of state fund investments is therefore controlled in large measure by size. The small size of most funds is probably chiefly responsible for the control exercised by state authorities and the historical limitation to the investment in fixed income securities, and then largely in governmental securities of national and state origin. This in turn points back to the influence of the grant from the government in support of the Morrill Act. State control of investments is diminishing in institutions with $5 million or more of investment assets. It seems that the smaller funds are inclined to hold a smaller percentage of equity investments, and in these cases real

A Broad Analysis of the Problem of the Investment of Life Funds

The general impression gained from a broad review of the earlier activities of the Institute is that the actuary of those days appears to have been less concerned with the question of the investment of funds than the actuary is to-day. There are several factors which lend support to this impression. First, in those earlier years the actuary, probably being preoccupied with the purely actuarial side of life assurance, friendly society and pension fund business, may have been content to leave the matter of investment to others and to accept their advice regarding the rates of interest to be assumed in his actuarial calculations. Secondly, both the field of investment and the volume of funds requiring investment being very much smaller, the problem may not have appeared to justify much greater attention than was paid to it. Perhaps the most likely reason, however, was that the practice of investment may have been regarded more as an art than a science and as a subject therefore which did not readily lend itself to an actuarial approach.

The stock exchange in practice

This paper is submitted in the hope that it will assist members who are not actively concerned with investment matters to obtain a reasonably clear picture of the Stock Exchange and how it works.The main object of the Stock Exchange, as an institution, is simply to provide a market for stocks and shares, i.e. rights to interest or dividends. Such a market has been in existence in one form and another since the latter part of the seventeenth century, and is virtually a necessity in the modern capital structure. Without it the investor would be loth to lock up his money in a joint-stock undertaking, and, if he did, would have difficulty in assessing the value of his holding at any time. Moreover, he would have little to guide him in making the best use of his capital and, on the other hand, companies requiring funds (to say nothing of the Government) would find it hard to guess the best terms for a new issue.

IN THE MATTER OF THE FREEHOLD INVESTMENT AND BANKING COMPANY OF AUSTRALIA LIMITED

IN THE MATTER OF THE FREEHOLD INVESTMENT AND BANKING COMPANY OF AUSTRALIA LIMITED