Supply Of Capital Research Articles

Price discovery and persistent arbitrage violations in credit markets

AbstractThis paper investigates price violations in credit markets using a data sample spanning from 2002 to 2016. We find that price violations are highly persistent during the crisis period, particularly for speculative‐grade bonds. There is evidence that price distortions and market disintegration are linked to market‐wide and firm‐level impediments to arbitrage and limited capital provision. Higher firm‐level impediments to arbitrage lead to less market integration, and more severe and persistent pricing discrepancies. Moreover, we find that the negative CDS basis persists in the postcrisis period, which is attributable to dealers’ lower capital commitment and deterioration in market‐making quality.

The Determinants of Office Rents and Yields: The International Evidence

Traditional urban models predict that office rents will be higher in larger and more prosperous cities with better transport and with industries with stronger agglomeration benefits. In addition, rental yields are expected to be lower in growing cities, especially when the supply of new office space is more constrained and the supply of capital is less constrained. We present evidence on commercial office rents and rental yields from 52 large cities in 29 developed and developing countries that is generally consistent with these implications.

Apathy of Malawian Indigenous Citizens on Capital Markets

Capital markets are catalysts for economic growth and wealth creation for both investors and investees. Vibrancy of capital markets comes in when demand and supply of capital is high. That is, investors’ returns are attractive and the investees’ objectives of accessing cheaper capital are met. The free-market economy principles should therefore be basis of capital markets to dictate both and equity and debt instruments. Malawi’s capital market is still at an infancy stage despite being operational for about twenty five years. Critical evaluation reveals that this could be attributed to the fact that it is wholly owned by government and the central bank continues to roll out policies which might not be in line with the demand and supply tenets. The results of this study indicate that equity instruments market is not ideal for indigenous citizens in view of the low dividend payouts, meager capital gains and weak laws to protect insignificant numerous minority shareholders. On the other hand, the debt instruments market despite being inactive with weak secondary market, provides meaningful returns to investors and could be a good source for long-term cheap capital for companies and government agencies such as state owned entities, local authorities and other quasi bodies. There is need provide civic education to indigenous people to invest in municipal bonds for capital projects such as roads, schools, hospitals rather than borrow from development partners and other lenders.

A new measure of financial constraints applicable to private and public firms

Abstract We study managers’ self-assessment of their firm’s financial constraint status to assess the validity of commonly used indicators of financial constraints. As categorizations based on common financial constraints measures lead to high misclassifications, we derive a new measure of financial constraints which performs well in-sample and out-of-sample for private firms. Applying our new measure to a large sample of private European firms, we find consistently lower investment-cash flow sensitivities and greater distortions in response to exogenous financing frictions for constrained firms across countries. Besides private firms, our new measure can also be applied to listed U.S. firms, as it reliably identifies constrained firms as measured by the occurrence of liquidity events and the incidence of an inelastic capital supply.

Patent Races and Institutional Solutions of Health Care Policy in Developed Countries

Objectives: To identify the methods of the state’s influence on health care system through intellectual property law mechanisms. Research Design & Methods: Literature review based on the economic analysis of law. F indings: An active role of the state in innovations in the pharmaceutical branch could bring benefits in the health care system. This role does not have to be limited to being a shareholder in selected projects (as a capital supplier). Implications / Recommendations: The state is able to influence the speed, the structure, and the direction of patent races b y setting a real width of the patent (court verdicts) and patent height (patent office’s decisions) as well as the manner and the scale of compulsory licences usage. Contribution / Value Added: Making changes in the speed, the structure, and the direction of patent races has got a strong impact on health policy. Appropriate influencing of the state on innovation activity in the pharmaceutical branch allows one to generate large benefits in the health care system.

An Exploration of Strategies for Facilitating Graduates’ Transition to the World of Work: A Case of Technical, Vocational Education and Training Graduates in Uganda

The major role of Technical, Vocational Education and Training (TVET) is to equip young persons with skills for the world of work. However, studies have shown that TVET graduates in Uganda experience difficulty in their transition to the world of work, implying major labor market entry problems. The study, we set out to identify different strategies for facilitating TVET graduates’ transition to the world of work in Uganda. A qualitative approach was used to collect data, analyze and present findings. Thirty respondents, comprising of employers of TVET graduates, trainers and officials from: skilling Uganda, Uganda employers’ union, Ministry of education officials, and TVET graduates in formal employment were randomly selected and interviewed. The various strategies identified were: <i>use of employment agencies, income generating units at the institutions, institutional-industrial linkages, provision of start-up capital, tools and materials for self-employment, training with production and internship/ industrial attachments programs</i>. It is recommended that an active labour market information system be established at TVET institutions to analyze, collect, evaluate and provide labour market information to identify evolving occupations, skills shortages and areas of skills oversupply and redundancy; that there should be an increase in apprenticeship programs and that TVET institutions adopt approaches such as case studies, project-based learning, real life problem-based learning, and teamwork learning activities.

Foreign Capital

A number of studies have looked into local annuity markets, mainly focusing on local conditions. This article explores capital networks for urban debt by analyzing the external relations of the Brunswick annuity market in the 15^th and 16^th centuries. Our study is based on an examination of data on foreign buyers of Brunswick (Braunschweig) annuities from the unpublished ‘Weddeschatbücher’ that registered sales of redeemable annuities. The analysis takes into account different groups of buyers and reveals spatial patterns corresponding with those of commodity trade and political cooperation within and beyond the region. A closer look at the chronology of sales indicates that political crises were the main cause of urban debt and foreign investment. In particular, the Reformation led to structural changes to the supply of foreign capital. Although interest rates provided economic incentives for foreign buyers, political support was the predominant reason for both individuals and other communes to supply capital in times of need.

Integrated Reporting and Sustainable Corporate Governance from European Perspective

According to the Cadbury Committee (1992) classical definition, corporate governance is ‘the system by which companies are directed and controlled.’ In the Cadbury Report and in other mainstream corporate governance codes, ‘system’ refers only to the ‘financial aspects of corporate governance’, that is, shareholder value and emphasis on the board’s and the management’s accountability to providers of financial capital only. During the last few years however, sustainability has been included through ‘integrated reporting’ in corporate governance codes especially in Africa (South Africa) and Asia (Malaysia, Philippines). For example, the South African King reports on corporate governance connect the use of integrated reporting to report on an organisation’s corporate governance practices and economic-social-environmental triple-bottom-line performance. The leading normative framework for integrated reporting, the International Integrated Reporting Council’s International Integrated Reporting Framework, is based on an idea of ‘shared value creation’ by providers of the ‘six capitals’ (financial, manufactured, intellectual, human, societal and environmental capitals). As such integrated reporting represents a stakeholder management model already integrated - at least on the text level - in many corporate governance codes, just enlarging the concept of capital providers from shareholders only to other internal stakeholders, and the goal of capital efficiency and profit maximisation from financial capital only to other five forms of internal capital provisions. It is also a new step in the development of social and environmental accounting and reporting, rooting from the 1970s and sustainability reporting from the 1990s. The concept of a ‘business model’ used in the Framework represents the way how an organisation creates value, comprising all its activities, its relationships with stakeholders and its tangible and intangible assets and liabilities, and finally the boards responsibilities, as for the board, ‘corporate governance’ and sustaining and developing the company’s business model are essentially the same thing. In the end of the day, it is a question what kind of ‘business model’ integrated reporting based corporate governance really reflects, and how it possible varies from shareholder-centred business model. The purpose of this paper is to test (1) what kind of stakeholder model, if any, integrated reporting and especially International Integrated Reporting Framework represents, (2) what is the impact, if any, of integrated reporting to material corporate governance in the codes it is included in, and (3) if yes, does an integrated view and especially the ‘integrated thinking’ behind the Framework represent a genuine sustainable value creation driven business model based on the boundaries of the planet and social foundation for the humanity, or is it only a view to encourage organisations to take care of the profits of the specific capital providers.

Трансформація HR-технологій під впливом цифровізації бізнес-процесів.

The article discusses global trends towards significant technological changes in HR management, analyzes the depth of penetration of advanced technologies into the main business processes, reflects the positive and negative effects of professional transformation. Advanced drivers of labour sphere development in the context of acceleration of the rate of digitalization of the economy and their influence on quantitative and qualitative characteristics of human capital supply are identified, which lead to the need to revise existing HR-technologies and their improvement on the basis of artificial intelligence technologies, augmented reality, cloud services. The revolutionary emphasis of HR-manager activity transformation caused by the possibilities of application of new digital platforms, applications, systems and methods of HR process control automation, as well as competence and professional challenges of HR-sphere specialists related to the need to adapt to fast-flowing digital solutions, intelligence and robotics of business processes are formulated. The opportunities and drawbacks of introducing advanced HR-technologies into the practice of Ukrainian enterprises as an integral component of business and HR-strategies are justified.

Tonuity: A Novel Individual-Oriented Retirement Plan

For insurance companies in Europe, the introduction of Solvency II leads to a tightening of rules for solvency capital provision. In life insurance, this especially affects retirement products that contain a significant portion of longevity risk (for example conventional annuities). Insurance companies might react by price increases for those products, and, at the same time, might think of alternatives that shift longevity risk (at least partially) to policyholders. In the extreme case, this leads to so-called tontine products where the insurance company's role is merely administrative and longevity risk is shared within a pool of policyholders. From the policyholder's viewpoint, such products are, however, not desirable as they lead to a high uncertainty of retirement income at old ages. In this article, we alternatively suggest a so-called tonuity that combines the appealing features of tontine and conventional annuity. Until some fixed age (the switching time), a tonuity's payoff is tontine-like, afterwards the policyholder receives a secure payment of a (deferred) annuity. A tonuity is attractive for both the retiree (who benefits from a secure income at old ages) and the insurance company (whose capital requirements are reduced compared to conventional annuities). The tonuity is a possibility to offer tailor-made retirement products: using risk capital charges linked to Solvency II, we show that retirees with very low or very high risk aversion prefer a tontine or conventional annuity, respectively. Retirees with medium risk aversion, however, prefer a tonuity. In a utility-based framework, we therefore determine the optimal tonuity characterized by the critical switching time that maximizes the policyholder's lifetime utility.

TONUITY: A NOVEL INDIVIDUAL-ORIENTED RETIREMENT PLAN

AbstractFor insurance companies in Europe, the introduction of Solvency II leads to a tightening of rules for solvency capital provision. In life insurance, this especially affects retirement products that contain a significant portion of longevity risk (e.g., conventional annuities). Insurance companies might react by price increases for those products, and, at the same time, might think of alternatives that shift longevity risk (at least partially) to policyholders. In the extreme case, this leads to so-called tontine products where the insurance company’s role is merely administrative and longevity risk is shared within a pool of policyholders. From the policyholder’s viewpoint, such products are, however, not desirable as they lead to a high uncertainty of retirement income at old ages. In this article, we alternatively suggest a so-called tonuity that combines the appealing features of tontine and conventional annuity. Until some fixed age (the switching time), a tonuity’s payoff is tontine-like, afterwards the policyholder receives a secure payment of a (deferred) annuity. A tonuity is attractive for both the retiree (who benefits from a secure income at old ages) and the insurance company (whose capital requirements are reduced compared to conventional annuities). The tonuity is a possibility to offer tailor-made retirement products: using risk capital charges linked to Solvency II, we show that retirees with very low or very high risk aversion prefer a tontine or conventional annuity, respectively. Retirees with medium risk aversion, however, prefer a tonuity. In a utility-based framework, we therefore determine the optimal tonuity characterized by the critical switching time that maximizes the policyholder’s lifetime utility.

Development of a social capital scale for constructed families of gay, bisexual, and other men who have sex with men.

Despite previous empirical studies which have linked social capital to a number of health outcomes, few studies have investigated sub-group specific social capital among populations at increased risk for HIV infection such as gay, bisexual and other men who have sex with men (GBM). Many GBM of color belong to constructed families in which friends refer to each other with kinship terms such as parents and children. No studies have measured social capital provisions within constructed family networks. This study developed a preliminary instrument for assessing social capital among constructed families. The network level social capital scale incorporated the following theoretical domains hypothesized to define social capital derived from network membership: social influence, multiplex ties, heterogeneity, social cohesion, trust, quality of support, and compositional quality. A cross-sectional survey administered an eight-item scale to 131 GBM who belonged to constructed families. The factor structure and confirmatory factor analysis were assessed. Reliability was evaluated using Cronbach’s alpha to measure internal consistency. A final single factor solution was obtained which was comprised of six items with high factor loadings. The resulting measures were highly correlated with an alpha of 0.84 and each factor loading was well above 0.3. This study assessed the psychometric properties of a preliminary network level social capital instrument among GBM in constructed families. Future studies may utilize or adopt this scale to measure network-level social capital within other populations.

Governance capacity, state policy and the rise of the Chongqing notebook computer cluster

ABSTRACTThe ability of a local development-oriented state to make their localities nodes in global production networks (GPNs) depends on the policy instruments available to it and the capacity of various actors to exploit this policy envelope fully and effectively. The post-2008 relocation and expansion in Chongqing of a coastal Chinese notebook computer manufacturing cluster is a compelling example of an activist state relocating and expanding parts of a GPN, and exporting globally from an inland location. Functional roles and governance capacity are examined through a study of the ways in which the Chongqing Municipal Government drew on government–industry relations, economic infrastructure, and social overhead capital provision, labour market organization and preferential policies, including measures to support chain logistics in and after industrial transfer, to couple its ambitions of lead companies, original equipment manufacturers (OEMs) and local enterprises with its own strategic goals.

The Emergence of a Parallel World: The Misperception Problem for Bank Balance Sheet Risk and Lending Behavior

We examine the reason why two opposing views on distressed banks' lending behavior in Japan's postbubble period have coexisted: one is stagnant lending in a capital crunch and the other is forbearance lending to low-quality borrowers. To this end, we address the measurement problem for bank balance sheet risk. We identify the credit supply and allocation effects of bank capital in the bank loan equation specified at the loan level, thereby finding that the parallel worlds, or the two opposing views, emerge because the regulatory capital does not reflect the actual condition of increased risk on bank balance sheets, while the market value of capital does. By uncovering banks' efforts to increase regulatory capital in Japan's postbubble period, we show that banks with low market capitalization, and which had difficulty in building up adequate equity capital for their risk exposure, decreased the overall supply of credit. Parallel worlds can emerge whenever banks are allowed to overvalue assets at their discretion, as in Japan' postbubble period.

Disclosure Quality and Dividend Payout in Saudi Firms

This study examines how disclosure quality influences the dividend payouts of firms, and provides further evidence concerning the outcome hypothesis and substitution hypothesis. Using a sample of non-financial Saudi Arabian listed firms during 2012-2014, our results provide support for the substitution hypothesis in which outsiders demand higher dividends in a low-quality disclosure environment as a &amp;ldquo;substitute&amp;rdquo; for opacity. Further analysis shows that managers pay a higher dividend in an opaque environment not only to establish a reputation among outside capital suppliers but also because they have to disgorge excess cash to circumvent free cash flow problems.

Lending Corruption and Bank Loan Contracting: Cross-Country Evidence

Lending corruption is an important agency problem for banks. Using data from the World Bank Business Environmental Survey, we find that in countries with more lending corruption, banks give more favorable loan terms to borrowers. This relation is stronger when firms are under more financing constraints, consistent with corruption being important to obtaining favorable loan terms when the supply of debt capital is tighter. In line with the expectation that monitoring constrains agency problems, this relation is weaker in countries with higher foreign ownership of banks or where Protestantism is the primary religion. In the syndicated loan market, participant banks are inclined to lend less in countries where lending corruption is more prevalent. Firms in countries with greater corruption prefer private bank debt over public bonds and are more leveraged. Banks in countries with more lending corruption have poor loan quality, worse earnings performance, and are more susceptible to trouble during a financial crisis. Overall, our findings suggest that corruption greases the wheels for borrowers but is detrimental to bank shareholders.

STRATEGI PENGEMBANGAN MATA PENCAHARIAN ALTERNATIF UNTUK MENINGKATKAN PENDAPATAN RUMAH TANGGA NELAYAN DI PULAU KODINGARENG KOTA MAKASSAR

This study aims to: (1) To indentify socio-economic characteristicsof fishing communities in Kodingareng island; (2) Formulate alternative livelihoodsto increase the income of fisherman households in kodingareng village; (3)Develop alternative livelihoodsto increase the income of fisherman households in kodingareng village of Makassar. The research was conducted on 01 September to 31 October 2018 on the Kodingareng Island of Makassar City. The method used in this study is: descriptive analysis, business feasibility analysis, and SWOT analysis. The results of the study indicate that alternative livelihoods that are feasible to develop are fiberglass manufacturing business, abon fish processing business, and fish cracker processing business. Suggestions and strategies that need to be considered include : (1) Conduct socialization, counseling and technical training in the hope that that the community, especially fisherman when not fishing, will continue to increase economic income but not conduct destructive activities; (2) Reactivate processing groups with guidance and supervision starting from raw material preparation, production, distribution, and marketing processes; (3) Need to get support and facilitation from the government, related to alterntive livelihoods that will be developed such as technical assistance and building business partnership patterns to obtain capital provision and broader market access.

Month-of-the-Year Effect Analysis on Taiwan’s 28 Major Industry Stocks

In modern society, the stock market plays an essential role among different investment tools. It matches capital supply and demand so that the idle capital existing in the community is employed effectively. That is, the capital supplier can get the dividend and capital gain, and capital demander can grow production and daily business operation activity. Most domestic scholars focused on investigating the influence of seasonal effects on the stock market. This study researches the month-of-the-year impact on the stock market. Regression analysis is used to determine if there is a month-of-the-year significance for 28 major industry stocks in Taiwan between 2008 to 2016.

The coordination mechanism of supply chain finance based on block chain

Recently, supply chain finance (SCF) through block chain platforms has gained its popularity. The modern supply chain has extremely extended, which leads to the nontransparency of the supply chain opacity, resulting in high cost of communication between upstream and downstream enterprises. In addition, the block chain, as the most ideal tool for rebuilding trust, can improve the enterprise’s ability to control the supply chain, making efficient and accurate product traceability become a reality. We study an SCF system based on block chain platforms over a single period. Suppose that the supplier faces a capital supply restrict and must borrow capital through an online block chain platform. The block chain platform avoid risks through set service rate, guarantee fee, loan fee for the loan. We find that the optimal strategy of the participants in the SCF system is stackelberg. For a SCF system with a capital-supply-restrict supplier, we find that the Block chain platform service rate provided to the suppliers is related to the Supplier default rate and the loan amount of Block chain platform service to the supplier. Our analysis suggests that it is important for the supplier to take the online block chain platform’s financial decisions (such as the service rate) into account when making their operational decisions.

Regulation and Bankers\u2019 Incentives

We study the effects of minimum capital requirements, capital buffers, liquidity regulation and loan loss provisions on the incentives of bankers to exert effort and take excessive risk. These regulations impact differently the behavior of bankers. Capital regulation, liquidity requirements and traditional loan loss provisions for expected losses provide adequate incentives to bankers. Capital requirements are the most powerful instrument. Counter-cyclical (so-called dynamic) loan loss provisions may provide bankers with incentives to gamble. The results help informing the ongoing debate about the harmonization of banking regulation and the implementation of Basel III.