investor preference for large firms new evidence on economies of size in the last several decades industrial organization literature has been replete with studies demonstrating a systematic relationship between accounting rates of return and firm size in the direction of greater and more stable accounting profits for larger firms these studies have been subject to criticism for an alarming number of statistical and conceptual problems the most important of which alleges a serious bias in accounting profit measures as proxies for economic profit 2 the criticisms have resulted in a stalemate in the interpretation of empirical evidence on firm size and performance nevertheless there is continued interest in the area ostensibly resulting from policy concerns with large firm advantages in both product and capital markets this paper provides new evidence concerning the industrial organization literature controversy of the connection between firm size and performance stock market data are used to examine the relationship between capital market returns risk and firm size the findings suggest that even if there were no advantages of large size in the product market equal rates of operating profit large firms would still have a substantial capital raising advantage over small firms this advantage is unrelated to the widely recognized floatation cost economies even after controlling for nondiversifiable risk using the capital asset pricing model capm investors still demonstrate a statistically significant and economically important preference for the securities of larger firms investors apparently place a premium on large firms which is not attributable to large firms observed lower risk as captured by the widely used measure of nondiversifiable risk beta risk this finding a fresh contribution to the

the impact of minimum trading units on stock value and price volatility we study how minimum trading unit changes on the tel aviv stock exchange impact a stock s trading activity price volatility and value the value effects are consistent with merton s 1987 model i e an increase in the investor base trading volume and a decrease in price noisiness affect stock value positively our results extend amihud mendelson and uno s 1999 tests of merton by demonstrating a clear relation between price noisiness changes and stock value changes and by showing that the response to a minimum trading unit decrease becomes less favorable and arguably even negative in the thinnest trading stocks

contagion as a wealth effect financial contagion is described as a wealth effect in a continuous time model with two risky assets and three types of traders noise traders trade randomly in one market long term investors provide liquidity using a linear rule based on fundamentals convergence traders with logarithmic utility trade optimally in both markets asset price dynamics are endogenously determined numerically as functions of endogenous wealth and exogenous noise when convergence traders lose money they liquidate positions in both markets this creates contagion in that returns become more volatile and more correlated contagion reduces benefits from portfolio diversification and raises issues for risk management during the f inancial panic associated with the default of the russian government in august 1998 and the subsequent collapse of the hedge fund long term capital management numerous hedge funds banks and securities firms tried simultaneously to reduce exposures to a variety of financial instruments such as russian bonds brazilian stocks u s mortgages spreads between on therun and off the run government securities and spreads between swaps and u s treasuries although the fundamental values of these positions would appear to have little correlation during this financial crisis the asset prices in these markets exhibited the following common empirical pattern 1 financial intermediaries suffered losses as prices moved against their positions 2 market depth and liquidity decreased simultaneously in several markets 3 the volatility of prices increased simultaneously in several markets and

review on malaysia s national energy developments key policies agencies programmes and international involvements this paper aims to present a review on malaysia s national energy developments by looking at various angles in terms of renewable energy and energy efficiency energy demand and consumption by sectors are presented as well as the fuel mix in electricity generation key energy policies implemented from the incorporation of malaysia s national oil company petronas in 1974 until the national green technology policy 2009 and a future policy will be addressed the roles of key players as well as important agencies in energy development are briefly presented key programmes in energy development such as malaysian industrial energy efficiency improvement project small renewable energy power programme and building energy efficiency programme are discussed as well as successful initiatives from the programmes malaysia s international involvements towards reduction of greenhouse gas emissions and carbon emissions especially montreal protocol and kyoto protocol are highlighted as a conclusion malaysia is aware of its role in formulating its national energy development policies sensitive towards the country s development towards the environment and utilization of energy resources as well as conscientious and responsive towards the call for sustainable development in promoting renewable energy and energy efficiency

res and risk renewable energy s contribution to energy security a portfolio based approach abstract during the first decade of the 21st century renewable energy sources res had been gaining momentum due to environmental issues concerns about pollution and climate change have raised public awareness encouraging governments to adopt policies to preserve and protect the environment regarding energy res promotion together with energy efficiency measures has been the main policy response to address such concerns as a consequence res development during the first decade of the 21st century has been remarkable although res deployment has been mainly focused on achieving environmental goals its potential contribution to energy security went not unnoticed however it is worth noting that while the trade off between environmental goals and the use of res to accomplish them and competitiveness has been widely explored the relationship between energy security and res has received less attention both at the conceptual and energy policy levels this article tries to address such a relationship the present article focuses on renewable electricity imports as illustrated by the case of the mediterranean solar plan after introducing the energy security energy risk concept and its dimensions the article focuses on the contribution of res in terms of security of supply for a given energy mix using the portfolio theory most of the analyses of the interactions between res and energy security focus on the national level with res being mainly conceived as a substitute for fuel imports to produce electricity and reduce so called energy dependence however new transmission technologies allow the import of electricity directly from neighbouring countries far out of the range of regular electricity lines therefore this article tries to broaden the analysis of energy security to international res trade flows applying the previous discussion to the main project involving significant international green electricity trade the mediterranean solar plan

the mispricing of u s treasury bonds a case study this article documents an apparent pricing anomaly involving 94 percent 30 year treasury bonds during the months of may and june 1986 during this period the price of the 94s rose sharply relative to the prices of other long term treasury bonds and created a potential arbitrage opportunity in addition owners of the 94 bonds were able to borrow at a zero interest rate bypledging their bonds detailed examination reveals that this relative pricing anomaly cannot be attributed to changes in the level or term structure of interest rates or to differences between the bonds with respect to liquidity taxation or duration

oil and gas trends and implications in malaysia abstract the trends of reserves production and consumption of oil in malaysia to meet the ever increasing demands do not seem to show that oil and gas will be depleted soon contrary to many reports malaysia s net exporter status of oil continues to expand over time for as long as the value of exports is greater than the value of imports only in physical quantities of oil that malaysia s imports exceed exports but this does not mean that malaysia will be a net importer by then given higher prices of exports the value of exports outweighs the value of imports if the current reserves are extracted based on the domestic consumption trend of 1980 2010 malaysia s reserves will last until 2027 but based on the 1998 2010 trend the reserves will be depleted by 2035 malaysia has adopted a four fuel diversification strategy comprising oil gas coal and hydro instead of heavily dependent on oil gas has a huge potential for domestic utilization as well as for exports to increase revenues malaysia is one of the few countries having many types of renewable energy sources malaysia has great potential in biomass utilization as renewable resources mostly from the existing natural forest and planned plantations

endogenous growth and the emergence of equity finance abstract this paper characterises the development of equity markets as a dynamic process that both influences and is influenced by the development of the real sector of the economy in overlapping generations economy borrowers seek funds to run risky investment projects by drawing up contracts which may take the form of either equity or debt issue in the presence of information asymmetry between borrowers and lenders the optimal contract is determined by trading off information dilution costs against bankruptcy costs significantly the equilibrium choice of contract depends on the state of the economy which in turn depends on the contracting regime based on this analysis the paper provides a theory of the joint determination of real and financial development with the ability to explain the emergence of a stock market along the path of real development

industry window dressing we explore a new mechanism by which investors take correlated shortcuts and present evidence that managers using sales management take advantage of these shortcuts specifically we exploit a regulatory provision wherein a firm s primary industry is determined by the highest sales segment exploiting this regulation we provide evidence that investors classify operationally nearly identical firms as starkly different depending on their placement around this sales cutoff moreover managers appear to exploit this by manipulating sales to be just over the cutoff in favorable industries further evidence suggests that managers engage in activities to realize large tangible benefits from this opportunistic action

investment allocation decisions home bias and the mandatory ifrs adoption abstract we examine the familiarity hypothesis of home bias by studying how foreign ownership of swedish firms is affected by the mandatory adoption of ifrs we decompose foreign investors into institutional and non institutional investors foreign investors are further decomposed into eu ifrs adopting countries and non eu residents non ifrs adopting countries we analyse the equity investments of these foreign investor groups in sweden during the period of 2001 2007 we find that after the mandatory adoption of ifrs foreign ownership owners from countries that adopted ifrs and particularly those from the eu increased these effects are particularly strong in small firms foreign institutional investors increased their ownership stake after the mandatory ifrs adoption whereas foreign non institutional investments were not affected significantly by the ifrs adoption in contrast to ownership from non adopting countries ownership from the eu increased in firms with both more and less tangible assets similarly foreign ownership from the eu increased in firms with both concentrated ownership and dispersed ownership after the adoption because sweden has already had strict legal enforcement and a low level of earnings management prior to the adoption our results suggest that increased foreign ownership is due to better abilities to compare firms rather than an improved quality

the market reaction to international cross listings evidence from depositary receipts abstract this paper examines the stock price impact of international dual listings the sample consists of 181 firms from 35 countries that instituted their first depositary receipt program over the period 1985 1995 the market reaction to a depositary receipt program is larger in magnitude and more pervasive than previously reported the stock price reaction is related to choice of exchange geographical location i e emerging or developed markets and avenues for raising equity capital i e public versus private offerings

what is the economic cost of the investment home bias overinvesting domestically is well known as an investment home bias ihb we define an economic home bias ehb whereby the ihb measures the investment weights and the ehb measures the economic cost induced by the ihb we may have a large ihb and a negligible ehb with the increase in the average correlation between foreign markets from 0 4 for the decade ending in 1988 to about 0 9 for more recent decades the u s ehb is becoming negligible despite the domestic investment of 77 5 since 2009 the correlations have decreased indicating that the hb puzzle is emerging once again

does anticipated information impose a cost on risk averse investors a test of the hirshleifer effect this paper theoretically and empirically investigates how the risk of future adverse price changes created by the anticipated arrival of information influences risk averse investors trading decisions in institutionally imperfect capital markets specifically i examine how the selling activity of individual investors immediately following an earnings announcement is influenced by the tradeoff between risk sharing benefits of immediate trade and explicit transaction costs imposed on such trades consistent with my theoretically derived predictions i find that investors current trading decisions are less sensitive to the incremental transaction costs created by short term capital gains taxes on trading profits as both the duration and intensity of the risk of future adverse price changes increase this evidence is consistent with an incremental cost to investors that results from the revelation of precise information which is commonly referred to as the hirshleifer effect

institutional determinants of capital structure adjustment speeds abstract many authors relate a firm s performance to legal and political features and the regulatory environment in which it operates this article compares firms capital structure adjustments across countries and investigates whether institutional differences help explain the variance in estimated adjustment speeds we find that legal and financial traditions significantly correlate with firm adjustment speeds more narrowly institutional features also relate to adjustment speeds consistent with the hypothesis that better institutions lower the transaction costs associated with adjusting a firm s leverage such associations between institutional arrangements and leverage adjustment speeds are consistent with the dynamic trade off theory of capital structure choice

financial contagion and attention allocation this paper explains financial contagion between two stock markets with uncorrelated fundamentals by fluctuations in international investors attention allocation we model the process of attention allocation that underlies portfolio investment in international markets using investors who face information processing constraints investors optimally allocate more attention to a region hit by a financial crisis to the detriment of other markets the resulting endogenous increase in uncertainty causes a reduction in the capacity to bear risks by international investors that induces them to liquidate their positions in all risky assets hence there is a collapse in stock prices around the world we show that the degree of non anticipation of a crisis is crucial for the existence of contagion using data from the east asian crisis and the number of news stories about thailand in the financial times relative to news stories about argentina brazil and chile as a proxy for the relative attention allocated to the asian stock market we find evidence consistent with two key predictions of our model first the higher the volatility of the originator market the more relative attention allocated to this market and second the more relative attention allocated to the originator market the higher the volatility of the other markets our findings support the attention reallocation channel as a transmission mechanism of financial crises between regions during the period from january 1997 to july 1998

asset pricing with idiosyncratic shocks this study shows the relationship between idiosyncratic shocks and expected returns on stock regarding theoretical and empirical results the dynamic stochastic general equilibrium is derived from idiosyncratic stochastic productivity level in production function of heterogenous firms to come up with a new asset pricing model given any state the main finding states that expected stock returns depends on the rate of time preference depreciation rate capital share expected idiosyncratic productivity level at time the percentage deviation of capital from steady state at time and the percentage deviation of labor from steady state at time in fact expected idiosyncratic productivity level expected capital and expected labor are the determinant factors that affect on expected stock returns eventually expected idiosyncratic stochastic productivity level is positively related to expected stock returns similar to expected labor in contrast expected capital has a negative effect on expected stock returns

behavioral rationality in finance the case of dividends as the title suggests this paper attempts to get to the specifics of the behavioral rationality theme of this conference by focusing on an area in the main core of finance namely the demand and supply of dividends where by common consent the essentially rationalist paradigm of the field seems to be limping most noticeably important and pervasive behavior patterns on both the paying and the receiving ends have despairingly been written off as puzzles even by theorists as redoubtable as fischer black see esp his much cited 1976 article behaviorists have homed in on precisely these same dividendrelated soft spots in the current body of theory see esp shefrin and statman 1984 we seem to have in sum an ideal place to look for signs of an imminent paradigm shift in the behavioral direction of precisely the kind envisioned by some of the other contributors to this conference the dividend related difficulties and supposed anomalies at issue here are more than just the parochial concern of finance specialists the dividends seem a natural area in finance where the introduction of behavioral cognitive elements might help resolve long standing anomalies particularly the seeming failure of supply to adjust to taxinduced price penalties a closer look at the empirical record however particularly at evidence of responsiveness to major structural changes shows behavior of the aggregates to be less anomalous than conventional handwringing might suggest behavioral cognitive elements whatever they might contribute to the description of particular microdecisions do not appear to be essential adjuncts to the basic finance model in the major comparative static applications for which it was intended helpful comments on an earlier version of this paper have been received from nai fu chen jean marie gagnon gur huberman kose john james poterba and especially melvin reder

what determines mutual fund trading in foreign stocks abstract we examine the portfolio rebalancing measured by the equity churn rate of mutual funds from 29 countries based on annual stockholdings over the 1999 2006 period we find that funds more often trade the stocks of companies located in countries with higher degree of information asymmetry and are less familiar to fund managers after we control for the effects of stock market development and investor protection consistent with the behavioral bias fund managers more often rebalance stocks in foreign markets that perform well this bias is exacerbated when fund managers are less familiar with and less informed about those markets

corporate bond covenants and social responsibility investment this paper examines the effect of corporate social responsibility csr on the number of bond covenants we find that a high csr score has a negative association with the number of bond covenants moreover our results are more pronounced for firms with a high bid ask spread and high agency costs our analysis highlights the effect of the good stakeholder relationship on the bond contracts

the demand for information and the diffusion of a new product abstract the paper examines the implications of the ability of a consumer to learn about the characteristics of a new product on the diffusion of the product over time the demand for information by the consumer is shown to generate a sigmoid diffusion curve for total sales of the product further it is shown that over time the elasticity of demand along the diffusion curve increases

disclosure policy a discussion of leuz triantis and wang 2008 on going dark abstract ltw 2008 examine firms withdrawing from the sec reporting system but continuing to trade on pink sheets the paper finds that sarbanes oxley increased the propensity of firms to go dark but counter to conventional wisdom had no significant effect on the rate of going private transactions agency costs as well as poor growth opportunities proximity to financial distress and increased compliance costs arising from sox increase the propensity to go dark suggestions to improve the empirical implementation and interpretation involve including additional control and more suitable explanatory variables and more attention to causation issues and to the quantification of economic significance

the sweet taste of information a study of the demand for new brands in the uk confectionery industry this paper tests the hypothesis derived in tonks 1986 that the demand for a product becomes more elastic over time in the early periods of a product s life the demand curve is relatively inelastic as consumers purchase the good to learn about its unknown qualities over time as information accumulates consumers become more price conscious the study makes use of data on eight products in the uk confectionery industry produced by rowntree mackintosh plc introduced onto the market over the period 1976 81 the study tests the hypothesis in two ways first it applies a standard demand curve to two subperiods to test for parameter stability secondly it incorporates an information variable to take account of the full information demands in the later periods both tests provide tentative support for the hypothesis

do better informed investors always do better a buyback puzzle we explore the value of private investment information using data from a singular source auctions of yearling racehorses horse breeders possess superior information about their own horses and have strong financial incentives to buy the best of these back at auction however those they repurchase subsequently perform significantly worse on average earning 30 less at the racetrack than horses purchased by outsiders moreover this underperformance is concentrated in male horses despite these being purchased exclusively for racing purposes these puzzling findings cannot be explained by differences in horse risk or breeder abilities or by nonfinancial objectives or by behavioral or selection biases jel g02 g11 g14 l83 d44

a review on global wind energy policy with the increasing negative effects of fossil fuel combustion on the environment in addition to limited stock of fossil fuel have forced many countries to inquire into and change to environmentally friendly alternatives that are renewable to sustain the increasing energy demand energy policy plays a vital role to mitigate the impacts of global warming and crisis of energy availability this paper explores the wind energy industry from the point of view of the wind energy policy it is noticed that energy policy could help increasing wind power generation as well as stimulating the energy industry it may be stated that without specific energy policy a country would not be able to solve the acute problems like reducing greenhouse gases ghgs emission scarcity of energy etc this paper discussed the existing successful energy policies for few selected countries based on literatures it has been found that fit rps incentives pricing law and quota system are the most useful energy policies practiced by many countries around the world then status of wind energy policy for malaysia was investigated and compared with few selected countries around the world

environmental disclosure and stock market liquidity evidence from arab mena emerging markets abstractthe objective of this study is to examine the impact of environmental disclosure levels on the stock market liquidity of arab middle eastern and north african mena companies for that a self constructed disclosure index was applied to the annual reports for the years 2010 2011 and 2012 and the bid ask spread was used as a proxy for stock market liquidity results indicate that levels of environmental disclosure in mena companies are quite low in addition using a sample of 276 firm year observations multivariate analysis shows that the higher the level of environmental disclosure provided in the annual reports the lower the spread between the market bid and ask prices thereby indicating an increase in stock market liquidity

the rise and fall of the amex emerging company marketplace abstract in 1992 the amex launched the emerging company marketplace ecm to trade the stocks of small but growing companies bid ask spreads decreased dramatically for listing firms and news coverage increased executives of listing firms were quite satisfied yet few firms chose to list on the ecm and it closed in 1995 what went wrong most amex stakeholders had little to gain from the success of the ecm and a series of scandals damaged the reputation of the exchange similar small firm markets have also failed largely because successful firms quickly depart for traditional markets leaving only unsuccessful firms behind

the earnings announcement premium around the globe abstract u s stocks have been shown to earn higher returns during earnings announcement months than during non announcement months we document that this earnings announcement premium exists across the globe moreover it is not isolated to a few countries of the 20 countries with enough data to conduct a within country analysis nine exhibit a significantly positive premium a cross country analysis finds that the premium is strongest in countries with the greatest increase in idiosyncratic volatility around the time of their firms earnings announcements suggesting that uncertainty over the earnings information to be disclosed is a primary driver of the global announcement premium

do international investors enhance private firm value evidence from venture capital we examine the impact of international venture capital investors on private firm success spanning 81 countries over the years 1995 2010 the data examined indicate that relative to deals in which the investor base is purely domestic private firms that have an international investor base have a higher probability of exiting via an initial public offering ipo and higher ipo proceeds the evidence is consistent with the view that while the benefits of internationalization may be difficult and costly to manage for those firms that succeed in managing cross border coordination costs there is potential value for an ipo firm the benefits relative to the costs of internationalizing the investor base for private firms sold in acquisitions by contrast are much less pronounced the most important source of this benefit appears to be access to capital

continuous time methods in finance a review and an assessment i survey and assess the development of continuous time methods in finance during the last 30 years the subperiod 1969 to 1980 saw a dizzying pace of development with seminal ideas in derivatives securities pricing term structure theory asset pricing and optimal consumption and portfolio choices during the period 1981 to 1999 the theory has been extended and modified to better explain empirical regularities in various subfields of finance this latter subperiod has seen significant progress in econometric theory computational and estimation methods to test and implement continuous time models capital market frictions and bargaining issues are being increasingly incorporated in continuous time theory the roots of modern continuous time methods in finance can be traced back to the seminal contributions of merton 1969 1971 1973b in the late 1960s and early 1970s merton 1969 pioneered the use of continuous time modeling in financial economics by formulating the intertemporal consumption and portfolio choice problem of an investor in a stochastic dynamic programming setting merton 1973b also showed how such a framework can be used to develop equilibrium asset pricing implications thereby significantly extending the asset pricing theory to richer dynamic settings and expanding the scope of applications of continuous time methods to study problems in financial economics 1 within a span of about 30 years from the publication of merton s inf luential papers continuous time methods have become an integral part of financial economics indeed in certain core areas in finance such as e g asset pricing derivatives valuation term structure theory and portfolio selection continuoustime methods have proved to be the most attractive way to conduct research and gain economic intuition the continuous time approach in these areas has produced models with a rich variety of testable implications the econometric theory for testing continuous time models has made rapid strides in the last decade and has thus kept pace with the impressive progress on the theoretical front one hopes that the actual empirical investigations and estimation using the new procedures will follow suit soon

a vision on the opportunities policies and coping strategies for the energy security and green energy development in malaysia abstract energy security management remains a complex and fragmented interplay between the population growth urbanization economical development and the living environment today green technology application has been the prime contributor and an indispensable factor to preserve the long term reliability of energy supply this agenda has called for an integrated adaptive coordinated environmentally oriented and participatory approach to the protection of renewable resources malaysia endowed with its rich natural resources and diversity recognizes the need to adopt a sound developmental framework to transform the country s energy management landscape into a high quality and excellent level parallel to this development both government and non governmental organizations continue to advocate national efforts to explore alternative energy and improve the dynamic energy growth in a cost effective manner the plan espouses the establishment of ocean energy geothermal power hydropower wind power hydrogen fuel cell nuclear energy biodiesel and bioethanol processing industries the impetus is accompanied by the integration of environmental protection rules and boosted by the implementation of new energy policies the present work attempts to address the opportunities dynamic pressure and coping strategies of energy security and green energy development in malaysia the present and future outlooks of renewable and non renewable energy are elucidated besides the research breakthroughs and joint co operations for the promotion of green energy management are outlined

misspecification of capital asset pricing this study documents empirical anomalies which suggest that either the simple one period capital asset pricing model capm is misspecified or that capital markets are inefficient in particular portfolios based on firm size or earnings price e p ratios experience average returns systematically different from those predicted by the capm furthermore the abnormal returns persist for at least two years this persistence reduces the likelihood that these results are being generated by a market inefficiency rather the evidence seems to indicate that the equilibrium pricing model is misspecified however the data also reveals that an e p effect does not emerge after returns are controlled for the firm size effect the firm size effect largely subsumes the e p effect thus while the e p anomaly and value anomaly exist when each variable is considered separately the two anomalies seem to be related to the same set of missing factors and these factors appear to be more closely associated with firm size than e p ratios

indicators of security of natural gas supply in asia natural gas has become an increasingly valuable resource and a global commodity the demand for it has significantly increased japan korea and taiwan heavily rely on liquefied natural gas lng imports for their gas supplies from malaysia brunei indonesia australia and the middle east on the other hand countries like thailand and singapore import gas via trans border pipelines gas supply interruptions volatile gas prices transportation and distribution bottlenecks and a growing reliance on imports over longer distances have renewed interest on gas security in asia this paper examines the relative vulnerability to natural gas supply disruptions of seven gas importing countries in asia for year 2008 based on four indicators of security of gas supply a composite gas supply security index is estimated as an overall indication of gas vulnerability for our sample countries the results demonstrate that there are differences in the values of the overall indicator of gas vulnerability among countries and the assessment is useful in developing an effective strategy of natural gas supply security in countries in the asian region

stress testing the equity home bias a turnover analysis of eurozone markets abstract shifts in equity turnover happen on and around holidays because rationally bounded investors become distracted their pattern reveals a persistent equity home bias even in the eurozone a stress test case for the survival of this bias given the high level of economic and financial development and integration in this area the bias is greater for small caps because investors are reluctant to hold this class of foreign asset our study corroborates calendar anomalies in trading volumes but refutes the hypothesis regarding turnover sensitivity to stock returns common in the empirical and theoretical literature based on investor heterogeneity and short sale constraints our results reveal vanishing cost asymmetries in taking long rather than short positions

energy efficiency and carbon trading potential in malaysia abstract the damage inflicted by global warming is happening far faster than any experts have predicted or anticipated since the kyoto protocol was signed in 1997 to fight global warming through reducing global greenhouse gases ghgs emission the world climate pattern has worsened at an accelerated rate beyond expectation while developed countries sanctioned by the protocol are committed to achieve their ghg emission targets developing nations play similar roles on a voluntary basis since almost all of the ghgs emissions come from energy sector it is obvious that energy policy and related regulatory frameworks play imperative roles in realizing the kyoto protocol objectives with carbon dioxide co 2 touted as the main remedy in the ghgs emissions it is only reasonable that carbon trading becomes the essential element in the protocol recently a milestone is marked in the kyoto protocol with the 2009 climate summit in copenhagen denmark with all participating countries further committed themselves in fulfilling the protocol s obligations before the commitment period due in 2012 it is worthwhile to review the various energy efficiency efforts and carbon trading potential in malaysia a country which although does not bear any obligation has ratified and lauded the cause of the protocol malaysia as a developing nation is seen as a direct beneficiary from carbon trading and in this paper how the country energy policies have evolved over the years with concerted efforts from the government to minimize its carbon footprint through numerous energy efficiency implementations are discussed in length the impact from the 2009 climate summit on malaysia is also briefed

the impact of global equity offerings this article examines the impact of u s firms issuing equity in multiple markets we compare the stock price reactions to announcements of global equity offers to a control group of issues offered exclusively in the domestic u s market all else equal the adverse price reaction that typically accompanies equity issuance is reduced by 0 8 percent when some shares are sold abroad the overall evidence suggests global offers are effective in expanding demand and reducing the price pressure effects associated with share issuance the benefits of global offers appear to be associated with an increase in the number of foreign shareholders the search for new capital markets and lower costs of capital is an ongoing search for most firms in recent years the number of u s firms issuing common equity in international markets has increased significantly in 1985 u s firms raised 89 million through follow on equity offers in foreign markets and this amount increased to 18 915 million in 1995 a greater than 200 fold increase in nominal terms this paper focuses on follow on global equity issues by u s firms and attempts to assess why firms widely acknowledged to have access to broad and deep domestic capital markets increasingly seek to raise equity abroad the global equity offerings we examine involve a simultaneous sale of common equity at the same offer price in the u s market and one or more international markets we examine the characteristics of the issuers and issues and investigate to what extent the wider distribution of shares affects the pricing and costs of these issues our main line of inquiry examines whether the distribution of shares to multiple markets results in a higher offer price for equity shares than would be obtained had the shares been sold exclusively in the u s market domes

the role of renewable energy to validate dynamic interaction between co2 emissions and gdp toward sustainable development in malaysia abstract closing the gap between economy activity and environmental quality is one of the solutions for reaching sustainable development in malaysia to do so the cubic polynomial functional form of ekc is utilized by accommodating renewable energy into the base of the ekc model and validating its hypothesis between co 2 emissions and gdp growth for the 1971 2015 period the f bounds vecm granger causality cusum and cusumsq tests are utilized the estimated results consistently show that the inverted n shaped ekc hypothesis holds in malaysia ceteris paribus the co 2 emissions will be declined when the gdp reach rm2841 9 billion in 2030 which is beyond the sample period the renewable energy has a negative significant effect on co 2 emissions and the direction of causality is running from co 2 emissions to renewable energy also the gdp growth will be the remedy for environmental pollution problems and that renewable energy is one of important elements to be considered for improving environmental quality a tighter and concentrated environmental policy is needed to direct the environment economic growth nexus toward a downward trend consequently these results may help malaysian policymakers to establish an energy policy that guarantees a balance between economic growth and environmental prosperity

equity home bias and corporate disclosure abstract i show that more comprehensive corporate disclosure reduces investors uncertainty about domestic companies payoffs at no cost thereby decreasing investors equity home bias toward a country since investors should base their investment decisions on valid and easily interpretable company information only more comprehensive disclosure will reduce the home bias only if domestic securities law is sufficiently stratified and domestic companies use international accounting standards using panel data for 38 countries from 2003 to 2008 i find that more comprehensive disclosure reduces investors home bias though significantly only for countries that sufficiently enforce their securities law and implement international accounting standards

investment analysis and the adjustment of stock prices to common information in this article we are concerned with the effect of the number of investment analysts following a firm on the speed of adjustment of the firm s stock price to new information that has common effects across firms it is found that returns on portfolios of firms that are followed by many analysts tend to lead those of firms that are followed by fewer analysts even when the firms are of approximately the same size many analyst firms also tend to respond more rapidly to market returns than do few analyst firms adjusting for firm size this relation however is nonlinear and the marginal effect of the number of analysts on the speed of price adjustment increases with the number of analysts article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

foreign institutional investment is governance quality at home important abstract this paper examines the investment preferences of foreign institutional investors investing in the u s market we analyse both firm and country level determinants that influence the foreign institutional investors allocation choices at the country level we find that the governance quality in a foreign institutional investor s home country is a determinant of their decision to invest in the u s market our findings indicate that investors who come from countries with governance setups similar to that of the u s invest more in the united states the investment levels though are more pronounced for countries with governance setups just below that of the u s our results are consistent with both the flight to quality and familiarity arguments and help reconcile prior contradictory empirical evidence at the firm level we present unequivocal evidence in favour of the familiarity argument foreign institutional investors domiciled in countries with high governance quality prefer to invest in u s firms with high corporate governance quality this effect is primarily driven by grey non monitoring institutional investors

specialization versus diversification as a venture capital investment strategy abstract much important work has informed us of rates of return earned by venture capitalists the importance of venture capitalists to the going public process and the criteria venture capitalists use to evaluate deals this paper seeks to add to the literature by testing hypotheses based upon both the finance and strategic management literature regarding certain venture capitalist investment practices venture capitalists seek to control or manage risk driscoll 1974 macmillan siegel and subbanarasimha 1985 financing structure and investment strategy provide several means for venture capitalists to do this tools available to the venture capitalist include portfolio diversification to spread risk across different industries firms or hot cold ipo markets to minimize unsystematic or investment specific risk information sharing networking and specialization can also be used to control unsystematic risk several hypotheses are developed from these conflicting perspectives data used to test the hypotheses are derived from responses to a survey of venture capitalists three hundred surveys were mailed to venture capitalists 98 or 32 7 returned usable responses portfolio diversification is a well known means to control risk exposure by reducing unsystematic or specific risks however bygrave 1987 1988 as well as financial intermediation theorists argues that maintaining a high degree of specialization is useful for controlling risk as well as for gaining access to networks information and deal flow from other venture investors the analyses of this paper build upon bygrave s work we construct more rigorous tests to resolve the conflict between the diversification and information sharing hypotheses our hypothesis tests were usually resolved in favor of the information sharing view for example venture capitalists in the sample that were heavily involved in seed round financing were diversified across fewer numbers of firms and industries further evidence in favor of information sharing is seen in investment patterns across different financing stages diversification would imply maintaining a portfolio of investments across the different investment stages the information sharing specialization view would argue that it is best to stay focused on a single stage or several connected stages the empirical evidence from the sample once again favors the specialization perspective this research provides information of use to venture capitalists as they seek information on how best to control risk to entrepreneurs as they learn of the factors venture capitalists consider in determining their investment strategy and to academicians as such studies provide insight to general industry practice and thus help to form the basis of classroom discussion and future research endeavors

the ability of global stock exchange mechanisms to mitigate home bias evidence from euronext this paper examines the effects on equity home bias of two mechanisms adopted by euronext when it was formed by the merger of four european countries stock exchanges in 2002 the two structural mechanisms are the integration of trading platforms across the four predecessor exchanges and the creation of named segments of the integrated exchange on which firms could voluntarily list by precommitting to enhanced disclosure and transparency employing a difference in differences research design using other european union companies as a control group we document that the integration of the euronext market was associated with a reduction in home bias for firms listed on the named segments of the euronext exchange but not for the nonsegment euronext firms our results suggest that the reduction in transaction costs from the integration of the trading platforms did not make the nonsegment euronext firms more attractive to the specific investors for whom the transaction costs were reduced on the other hand the decrease in information costs due to the precommitments to enhanced transparency made the segment firms more attractive to all categories of foreign investors consistent with the information costs hypothesis this paper was accepted by mary barth accounting

more possessions more worry abstract a common wisdom asserts that the wider the universe of assets to choose from the greater the investor s welfare we show that this is not the case in practice where parameters have to be estimated even when the estimates are unbiased surprisingly risk aversion plays a crucial role corresponding to the desirability of asset expansion by dividing investors in three groups investors with very low risk tolerance and investors with very high risk tolerance are better off with asset expansion and investors with moderate risk tolerance are worse off despite the option to refrain from investing in the additional asset

capital market equilibrium with externalities production and heterogeneous agents abstract the paper studies general equilibrium in an economy with externalities production and heterogeneous agents the model developed builds on brock brock w a 1982 asset prices in a production economy in mccall j j ed the economics of information and uncertainty university of chicago press chicago pp 1 43 and merton merton r c 1987 a simple model of capital market equilibrium with incomplete information journal of finance 42 483 510 it involves both a stock market and a market for loans together with negative externalities produced by a subset of firms importantly the technological production structure of the firms is reflected in the properties of the shares traded in the stock market agents are heterogeneous in their financial choices potentially discriminating against the firms producing a negative externality the model sheds light on the utility costs of the discriminating behavior and on the impact on the price of the stock issued by the firm which is responsible for the externality the model is used to study the factors which may magnify or reduce the impact of discrimination a set of discriminated firms may be seriously affected only if the discriminating investors command a large portion of overall wealth and or they do not represent important diversification instruments the model can be applied to understanding the effects of socially responsible investment whereby investors discriminate against companies belonging to some sectors which are perceived as socially dangerous or unethical

global and local information asymmetries illiquidity and sec rule 144a regulation s the case of indian gdrs abstract between 1992 and 1997 indian firms were the most frequent issuers of equity backed global depositary receipts gdrs governed by the sec s rule 144a and regulation s they also accounted for the highest dollar volume home market stock price responses to these issues are consistent with the hypotheses that gdrs enable firms to resolve two forms of information asymmetry 1 an asymmetry between issuing firms and international investors that results from market segmentation and 2 an asymmetry between indian firms and home market investors that resembles asymmetries that help explain abnormal returns in equity private placements by us firms our evidence suggests that gdr issuance can increase investors recognition of underlying shares even if there are no liquidity enhancements and even if disclosure requirements are not as demanding as those imposed on foreign firms whose depositary receipts trade in public us markets

the impact of cross listing in the united states on the precision of public and private information our study explores the source of improvement in the information environment from cross listing shares on us stock exchanges are the improvements from cross listing in the united states achieved more through public or private information channels while we find evidence that us cross listing is significantly associated with improvements in both public and private information precision the association is stronger between cross listing and improvements in private information precision this suggests that the improvement in the information environment for cross listed firms is largely due to analysts expending more effort on firm specific information discovery as opposed to broader improvements in overall public disclosure this research should influence international business scholars that improvements in the information environment do not occur solely through public information channels they also occur through investors private information search activities

optimal stock trading with personal taxes implications for prices and the abnormal january returns abstract the tax law confers upon the investor a timing option to realize capital losses and defer capital gains with the tax rate on long term gains and losses being about half the short term rate the law provides a second timing option to realize losses short term and gains long term if at all our theory and simulation over the 1962 1977 period establish that taxable investors should realize long term gains in high variance stocks and repurchase stock in order to realize potential future losses short term tax trading does not explain the small firm anomaly but predicts a seasonal pattern in trading volume which maps into a seasonal pattern in stock prices the january anomaly only if investors are irrational or ignorant of the price seasonality

the only game in town stock price consequences of local bias abstract theory suggests that in the presence of local bias the price of a stock should be decreasing in the ratio of the aggregate book value of firms in its region to the aggregate risk tolerance of investors in its region using data on u s states and census regions we find clear cut support for this proposition most of the variation in the ratio of interest comes from differences across regions in aggregate book value per capita regions with low population density e g the deep south are home to relatively few firms per capita which leads to higher stock prices via an only game in town effect

environmental disclosures regulatory costs and changes in firm value abstract union carbide s chemical leak in bhopal india during december 1984 resulted in approximately 4 000 deaths and 200 000 injuries this study examines the market reaction of chemical firms other than union carbide to this catastrophe evidence indicates that a significant negative intra industry reaction occurred however firms with more extensive environmental disclosures in their financial report prior to the chemical leak experienced a less negative reaction than firms with less extensive disclosures this result suggests that investors interpreted such disclosures as a positive sign of the firm managing its exposure to future regulatory costs

green energy market development in germany effective public policy and emerging customer demand this paper reviews the development of renewable energy in germany from 1973 to 2003 it investigates the relative importance of energy policy and green power marketing in shaping the renewable energy market more than a decade of consistent policy support for renewables under the feed in law streg and its successor eeg has been an important driver for increasing renewable electricity generation to date putting the country in a better position than most of its peers when it comes to achieving european union targets for renewable energy green power marketing driven by customer demand on the other hand is growing but has had limited measurable impact so far we discuss potential intangible benefits of green power marketing and scenarios for future market development the paper concludes with lessons that can be learned from the german case for policy design and market development in other countries

csr disclosure and sustainable supplier management a small to medium sized enterprises perspective the respective literatures on corporate social responsibility csr disclosure and sustainable supplier management have grown in recent years but little scholarly attention has been paid to the li

price convexity and skewness this paper develops a model in which investors who are prohibited from short selling agree to disagree on the precision of a publicly observed signal the model implies that the equilibrium price is a convex function of the public signal the model predicts that 1 the stock price reacts more to good news than to bad news 2 the skewness of stock returns is positively correlated with contemporaneous returns but negatively correlated with lagged returns 3 short sale constraints increase rather than decrease skewness and 4 disagreement about information precision increases skewness empirical tests conducted find supportive evidence for all these predictions

a review on existing and future energy sources for electrical power generation in malaysia abstract as the electricity demand is affected by population growth malaysia towards an industrialized nation is considering the options for future energy sources for its power generation besides the conventional four fuel mix the five fuel mix strategy under several national policies are introduced to diversify and expanding the resources to incorporate renewable energy and nuclear in view of malaysia will become a net energy importer by 2020 the increase in alternative energy shares at least will provide stable energy security more economical and greener environment in this paper present and future energy sources are discussed to emphasis on the constraints and barriers facing malaysia towards energy security and sustainability several preferences on future energy sources are under serious consideration where renewable energy re is becoming one of the popular choices as malaysia recognizes the potential of re as sustainable and greener option

changes in systematic risk following global equity issuance abstract this paper examines changes in systematic risk following global equity issues by us firms models of market segmentation show that if international capital markets are not fully integrated and demand curves for securities are downward sloping firms issue equity at higher prices by issuing in multiple markets compared to issuance on a single domestic market this would imply a reduction in the firm s cost of capital and an increase in firm value using a sample of global equity offers during 1986 1993 we find that us firms that issue equity abroad experience a decline in systematic risk subsequent to issuance after controlling for size volume and leverage effects we find that this decline in systematic risk is larger in magnitude for global compared to a control sample of domestic equity issues the larger the proportion of the offer sold abroad and the larger the increase in trading volume the bigger the decline in systematic risk using a two factor global risk model we find that while firms issuing equity abroad experience a decline in the domestic component of systematic risk the foreign component increases overall however the net effect is a decline in the cost of capital

does idiosyncratic risk really matter goyal and santa clara 2003 find a significantly positive relation between the equalweighted average stock volatility and the value weighted portfolio returns on the nyse amex nasdaq stocks for the period of 1963 08 to 1999 12 we show that this result is driven by small stocks traded on the nasdaq and is in part due to a liquidity premium in addition their result does not hold for the extended sample of 1963 08 to 2001 12 and for the nyse amex and nyse stocks more importantly we find no evidence of a significant link between the value weighted portfolio returns and the median and value weighted average stock volatility the intertemporal relation between risk and return has long been an important topic in asset pricing literature most asset pricing models postulate a positive relationship between a stock portfolio s expected returns and risk which is often modeled by the variance or standard deviation of the portfolio s returns however there is no agreement about the existence of such a trade off for stock market indices 1 while return volatility is an intuitively appealing measure of risk different approaches used by previous researchers suggest that no clear consensus has emerged regarding its relevance 2 whether or not investors require a larger risk premium on average for investing in a security during times when the security is more risky remains an open question

household portfolio diversification a case for rank dependent preferences the proliferation of novel preference theories in financial economics is hampered by a lack of non experimental evidence and by the theories additional complexity which has not been shown to be critical in applications in this article i present arguments in support of preferences with rank dependency using the survey of consumer finances data i document two widespread patterns inconsistent with expected utility i many households simultaneously invest in well deversified funds and in poorly diversified portfolios of stocks and ii some households with substantial savings do not invest anything in equities i show that portfolio choice models with rank dependent preferences plausibly parameterized and under fully rational assumptions are quantitatively consistent with the observed diversification these results call for further efforts to integrate the models of rank dependent preferences in portfolio theory and asset pricing the decision theoretic literature has long acknowledged the shortcomings of the expected utility theory of von neumann and morgenstern 1944 several generalizations of the theory are inspired by the experimental evidence and aimed at improving its descriptive accuracy however there are few applications of new models of preferences in finance and expected utility continues to dominate the field 1 two principal hurdles slow the proliferation of novel preferences in financial economics first the lack of empirical non experimental or field data confirming that the behavior motivating non expected utilities is widespread outside the laboratory settings second the additional and often significant complexity of the alternative preferences which has not been shown to be critical in applications where the models based on expected utility fall short of reasonable predictions this article presents empirical and theoretical this paper was previously circulated under the title household portfolio diversification the paper has benefited from the comments of shlomo benartzi luca benzoni markus brunnermeier john dickhaut maria perozek raj singh hersh shefrin and workshop participants at minnesota finance bag lunch 2003 wharton conference household financial decision making and portfolio choice and 2003 summer meetings of econometric society i would like to thank cam harvey the editor and an anonymous referee for many helpful comments and suggestions a special thanks to jack kareken for comments and editorial help on an earlier draft i am grateful to donna zerwitz for editorial assistance the views expressed herein are those of the author and not necessarily of the federal reserve bank of minneapolis or the federal reserve system all errors and omissions are the sole responsibility of the author address correspondence to valery polkovnichenko finance 3 122 csom 319 19 th

financial system design and liquidity provision by banks and markets in a dynamic economy this paper contributes to the literature on financial system design by comparing markets and banks in a dynamic economy investors trade off their liquidity needs against the high returns on illiquid investments both the banking system and the market can provide partial liquidity insurance to investors we consider full market participation as well as limited market participation we demonstrate that the full participation market with intergenerational trading can provide more liquidity than one without insurance is provided through wealth transfer across generations instead of cross subsidization across contemporaneous types as is the case in the finite economy given a full participation market that allows trading across generations only banks with initial capital can provide additional liquidity in a limited participation market with uncertainty about trading types an intergenerational bank with or without initial capital provides additional insurance to investors the need for trade is eliminated finally if there is no uncertainty about trading types then an intergenerational bank with initial capital eliminates the need for trading and improves welfare for all an intergenerational bank without initial capital improves welfare for people who do not trade

financial asset holdings and political attitudes evidence from revolutionary england the english parliament s struggle for supremacy against monarchical dictatorship during the civil war 1642 1648 was crucial for the establishment of representative government yet its lessons continue to be debated i exploit novel data on individual mps drawn from 1 842 biographies to show that the conflict was over overseas interests and other factors over which the executive enjoyed broad constitutional discretion rather than over domestic property rights i further exploit the coincidence of individual mps ability to sign legally binding share contracts with novel share offerings by overseas companies to measure the effect of overseas share investment on their political attitudes i show that overseas shareholding pushed moderates lacking prior mercantile interests to support reform i interpret the effect of financial assetholding as allowing new investors to exploit emerging economic opportunities overseas aligning their interests with traders by consolidating a broad parliamentary majority that favored reform the introduction of financial assets also broadened support for the institutionalization of parliamentary supremacy over dictatorial rule jel codes o10 g11 f10 k00 n23 p10

differential information and security market equilibrium we propose a simple model of equilibrium asset pricing in which there are differences in the amounts of information available for developing inferences about the returns parame ters of alternative securities in contrast with earlier work we show that parameter uncer tainty or estimation risk can have an effect upon market equilibrium under reasonable conditions securities for which there is relatively little information are shown to have relatively higher systematic risk when that risk is properly measured ceteris paribus the initially very limited model is shown to be robust with respect to relaxation of a number of its principal assumptions we provide theoretical support for the empirical examination of at least three proxies for relative information period of listing number of security returns observations available and divergence of analyst opinion

does home bias affect firm value evidence from holdings of mutual funds worldwide this study finds strong evidence that home bias affects firm valuation at both country and firm levels at the country level increasing the bias of domestic investors toward home equity lowers the market valuation of home equity at the firm level firm value increases as the compositions of local equities held by domestic and foreign investors tend toward the firms global market capitalization weights but decreases as their weights deviate from global weights overall the evidence is consistent with the optimal global risk sharing hypothesis that the greater risk sharing between domestic and foreign investors in international capital markets reduces the cost of capital and hence enhances market valuation

the effects of market segmentation and investor recognition on asset prices evidence from foreign stocks listing in the united states non u s firms cross listing shares on u s exchanges as american depositary receipts earn cumulative abnormal returns of 19 percent during the year before listing and an additional 1 20 percent during the listing week but incur a loss of 14 percent during the year following listing we show how these unusual share price changes are robust to changing market risk exposures and are related to an expansion of the shareholder base and to the amount of capital raised at the time of listing our tests provide support for the market segmentation hypothesis and merton s 1987 investor recognition hypothesis the globalization of u s capital markets has accelerated dramatically in the past decade increasing numbers of companies from overseas have chosen to either raise capital through global equity issues or prepare for future capital raising by way of cross listings on u s exchanges as of 1997 about 1 300 non u s companies have listed their shares for trading on the new york stock exchange nyse the american exchange amex the national association of securities dealers automation quotation nasdaq system or

disclosure decisions by firms and the competition for price efficiency this paper develops a model of the relationship between investment decisions by firms and the efficiency of the market prices of their securities it is shown that more efficient security prices can lead to more efficient investment decisions this provides firms with the incentive to increase price efficiency by voluntarily disclosing information about the firm disclosure decisions are studied it is shown that firms may expend more resources on disclosure than is socially optimal this is in contrast to the concern implicit in mandatory disclosure rules that firms will expend too few resources on disclosure this paper develops a model of the relationship between firms investment decisions and the efficiency of the market prices of their securities it is shown that more efficient security prices can lead to more efficient investment decisions this provides firms with the incentive to increase price efficiency by voluntarily disclosing information about the firm disclosure decisions are studied the costs of disclosure are twofold first there are costs of producing and disseminating the information included here are opportunity costs of firms employees auditing and legal expenses costs of printing and distribution and costs associated with the release of any proprietary information second there are traders costs of assimilating the information for instance while it is not very costly to obtain a firm s 8 k and 10 k once produced it is quite costly to understand the implications of their contents while the former costs have been recognized in the literature on disclosure the latter costs have not that is while traders are sometimes viewed as having access to some costly information the information contained in firms disclosures is typically taken to be costlessly observed by all see for instance diamond 1985 and dye 1987 1 taking traders costs of learning the information content of firms disclosures into account leads to new conclusions regarding incentives to expend resources on disclosure in particular it is shown that firms may spend more on disclosure than is socially optimal this overdisclosure results from firms competing for the attention of traders this is an interesting result given the public policy concern that firms on their own will spend less on disclosure than is socially optimal

management of natural gas resources and search for alternative renewable energy resources a case study of pakistan abstract energy usage in pakistan has increased rapidly in past few years due to increase in economic growth inadequate and inconsistent supply of energy has created pressure on the industrial and commercial sectors of pakistan and has also affected environment demand has already exceeded supply and load shedding has become common phenomenon due to excessive consumption of energy resources it would become difficult to meet future energy demands this necessitates proper management of existing and exploration of new energy resources energy resource management is highly dependent on the supply and demand pattern this paper highlights the future demands production and supply of energy produced from natural gas based on economic and environmental constraints in pakistan with special emphasis on management of natural gas an attempt has been made by proposing a suitable course of action to meet the rising gas demand a mechanism has been proposed to evaluate pakistan s future gas demand through quantitative analysis of base worst and best chosen option co 2 emission for all cases has also been evaluated the potential constraints and possible solutions to develop alternative renewable energy resources in the country have also been discussed this work will be fruitful for the decision makers responsible for energy planning of the country this work is not only helpful for pakistan but is equally important to other developing countries to manage their energy resources

chapter 9 econometric and time series market response models publisher summary marketing has seen a rapid expansion in the widespread use of quantitative methods correlation and regression analysis were among the first techniques used as marketing research emerged as a discipline after world war ii in the early 1970s regression analysis became econometrics simultaneous equation systems could be estimated almost as easily as single regression equations while econometrics as a whole continues to flourish as new and more sophisticated estimation techniques and associated computer software have become available simultaneous equation systems have not become widely prevalent the dynamic structure of marketing variables themselves is addressed in the chapter followed by discussions of leads and lags among marketing variables and the assessment of the direction of causality dynamic properties of sales response functions have been discussed in more detail marketing generalizations that have been uncovered as well as empirical evidence on the shape of the sales response function is reported

natural gas in asia trade markets and regional institutions natural gas trade in asia has been dominated by long established market structures under which liquefied natural gas lng has remained indexed based on the price of crude oil high transaction costs in the region in recent years imply that the regional market is sub optimally organized since 2010 the continued prevalence of oil indexation has had the most adverse effect on japan the world s largest lng importer in response japan implemented several strategies to challenge traditional lng pricing mechanisms in the region and ultimately reduce transaction costs japan s efforts include an increase in the share of spot and short term purchases sourcing new supplies from the united states under alternative pricing arrangements and driving regional buyer cooperation this paper evaluates the potential effect of japan s lng strategy on regional pricing in the broader institutional context arguing that lng pricing in the region will only partially shift away from oil indexation by the end of the decade while recent cooperation among regional lng importers indicates that there may be scope for change in the regional institutional setting the degree of cooperation is insufficient to have a profound effect on regional pricing

why do retired workers claim their social security benefits so early a potential explanation based on the cumulative prospect theory abstractsocial security provides longevity insurance for older americans according to expected utility theory models rational households who are not liquidity constrained should delay claiming th

malaysian biofuels industry experience a socio political analysis of the commercial environment this study examines the jatropha adoption process in sarawak malaysia a land rich in biological and ethnic diversity but highly impoverished attempts to alleviate poverty through oil palm plantation development resulted in internationally condemned destruction of peat lands sarawak subsequently turned to the inedible low input exportable biodiesel feedstock jatropha this case study argues that jatropha is unlikely to make more significant socio economic contributions than oil palm or other cash crops the analysis suggests that companies use social capital to aggressively expand their jatropha business among the native population in order to gain access to native customary lands which are often underproductive peat lands global biofuels sector development dynamics are examined through the lenses of political economics and social agricultural and energy studies the research finds that farmers 39 decisions to participate in the biofuels global value chain may result in negative income effects household food security reduction and biodiversity loss from peat land destruction the paper concludes with a proposal for an alternative approach to evaluate both social and financial drivers in order to prevent the negative effects of biofuel based agribusiness on human and environmental systems c 2012 elsevier ltd all rights reserved

reit industry liquidity valuation and ownership reactions to etf inceptions we examine the impact of real estate investment trust reit exchange traded fund etf inceptions on the valuation ownership structure and liquidity of the u s reit market we posit that the re

the japanese energy sector current situation and future paths abstract as the world s third leading economy and a major importer of fuels the choice of future energy paths and policies that japan makes in the next few years will have a significant influence on the energy security of the world as a whole and of the northeast asia region in particular in this article we describe the current status of and recent trends in the japanese energy sector including energy demand and supply by fuel and by sector we then discuss the current energy policy situation in japan focusing on policies related to climate change targets renewable energy development and deployment liberalization of energy markets and the evolution of the japanese nuclear power sector the final section of the article presents the structure of the japan leap long range energy alternatives planning software system dataset describes several alternative energy paths for japan with an emphasis on alternative paths for nuclear power development and ghg emission abatement and touches upon key current issues of energy policy facing japan as reflected in the modeling inputs and results

microstructure and ambiguity a goal for stock exchanges is to increase participation by firms and investors we show how specific features of the microstructure can reduce perceived ambiguity and induce participation by both investors and issuers we develop a model with sophisticated traders who we view as expected utility maximizers with rational expectations and unsophisticated traders who we view as rational traders facing ambiguity about the payoffs to participating in the market we show how designing markets to reduce ambiguity can benefit investors through greater liquidity exchanges through greater volume and issuing firms through a lower cost of capital

why does financial strength forecast stock returns evidence from subsequent demand by institutional investors using institutional investor demand as a proxy for revisions in sophisticated investors expectations we test whether financial strength information is gradually impounded over time consistent with the gradual incorporation of information financial strength predicts both future returns and future institutional investor demand further consistent with the gradual incorporation of information more sophisticated transient high turnover institutions respond to financial strength signals prior to less sophisticated nontransient institutions a number of additional tests suggest that financial strength forecasts stock returns at least in part because it forecasts institutional demand and institutional demand drives prices the author 2012 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press