dualism and reform in china according to the dual economy tradition of economic development models less developed economies at an early stage of development are marked by a dichotomy between a modern sector in which workers are hired at an institutional wage in numbers that rise with the growth of the industrial capital stock and a traditional sector in which workers subsist at an income level that is somewhat below the indus

bank lending and commercial property cycles some cross country evidence abstract we investigate determination of commercial property prices and their interaction with aggregate bank lending an illustrative model suggests that lending is closely related to property prices and property markets can develop cycles given plausible assumptions cross country empirical analysis confirms its predictions property prices show particularly strong links to credit in countries that experienced banking crises linked to property losses in 1985 1995 studies of dynamic interaction suggest that variance in commercial property prices is largely explicable by lagged shocks in the variable itself while gdp and bank credit also have an important influence implications arise for risk managers and regulators

international direct real estate investment a review of the literature this paper provides a critical review of research on international direct real estate investment issues to date no review article has explored the various findings of studies completed on the benefits of international real estate diversification in the past 10 years the quantity and variety of work have increased dramatically the paper is organised by how investing in a real estate asset is analysed in a mixed asset portfolio context or a real estate only portfolio context a fourth section focuses on research that has explored currency risk one of the prevailing risks associated with international investing the last section provides conclusions about the research and offers ideas for future research in this growing area of real estate investment

earnings risk taking and capital accumulation in small and large community banks abstract we examine the relationships between ownership structure and both earnings and risk taking among community banks before during and after the us financial crisis we find that publicly held small community banks had lower earnings than privately held ones before the recession but had higher earnings during and after the recession publicly held small community banks exhibited similar risk taking to privately held ones before and during the recession but greater risk taking after we also find that publicly held small community banks de risked more slowly than privately held ones following the recession large community banks on the other hand show no consistent relationship between ownership structure and earnings and a strong cyclical relationship between ownership structure and risk taking these findings expand our understanding of how community bank performance and capital accumulation behaves through different cyclical periods and how ownership structure affects that behavior

status in markets this project tests for the effect of social status in a laboratory experimental market we consider a special box design market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices we manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures in the first a subject s score on a trivia quiz determines his or her status in another subjects are assigned randomly to a higher status or lower status group in both treatments we find that average prices are higher in markets where higher status sellers face lowerstatus buyers and lower when buyers have higher status than sellers across all sessions the higher status side of the market captures a greater share of the surplus earning significantly more than their lower status counterparts

explaining and forecasting bond risk premiums in examining the risk premiums for u s and german 10 year government bond yields the authors found that the decline in bond risk premiums since the 1980s is associated with a decrease in global output variability and an increase in the power of 10 year government bonds to diversify portfolios

u s reits as an asset class in international investment portfolios an examination of u s real estate investment trust reit efficiency as a portfolio component from the perspective of all g 7 countries for the period 1985 through 1994 indicates that u s reits offer both an inflation hedge and diversification nevertheless including reits in test portfolios did not yield statistically significant increases in risk adjusted return over the period as a whole subperiod analyses indicated large temporal differences in reit efficiency as a portfolio component

insider privatization with a tail the screening contract and performance of privatized firms in rural china abstract this paper studies insider privatization in rural china and provides an explanation of why some firms have performed well after privatization but others have not we show theoretically that the underperformance of insider privatized firms could be due to the manager cum owner s lack of incentives after privatization a screening theory predicts that the buyout price is correlated with the postprivatization incentives and a firm s postprivatization performance increases with both the buyout price and postprivatization incentives drawing on data we collected in china we find evidence supporting the theory we also find that the buyout price decreases with the degree of information asymmetry

local elites and popular support for economic reform in china and india this article analyzes why it is that china an authoritarian political system has managed to generate more popular support for the reform process than india a democracy the authors argue that when local politicians and bureaucrats are more supportive of the reform process there is likely to be greater popular support for economic reform local political elite may be more supportive of reform in an authoritarian than in a democratic system because the level of local elite support for the reform process is influenced by the incentives faced by local elite in china institutional reform changed the incentives faced by local elite whereas in india reforms have not been accompanied by institutional changes that would encourage local elite to support reform to the same extent as in china the argument is based on local elite and mass surveys conducted in china and india in 1990 and 1996 respectively a logit model controlling for a variety of alternative explanations provides evidence that local elite

issuing costs to existing shareholders in competitive and negotiated underwritten public utility equity offerings abstract this paper presents the results of an empirical investigation of whether there is any difference in the cost incurred by public utilities if they issue new equity through a negotiated or competitive underwriting we conclude that the expected cost of a competitive offer is less than the expected cost of a negotiated offer but that the variance of the cost is substantially greater with a competitive offer these results are interesting because most public utilities use negotiated underwriting unless forced by regulation to use competitive offers this paper is also an addition to the growing agency theory literature

does international diversification work better for real estate than for stocks and bonds international diversification is now an established fact for stock and bond portfolios for real estate shares however this acceptance has so far not been the case this study is an investigation of the effectiveness of international real estate diversification relative to international diversification of stock and bond portfolios tests of international correlation matrixes of real estate returns common stock returns and bond returns indicate significantly lower correlations between national real estate returns than between common stock or bond returns the implication is that international diversification reduces the risk of a real estate portfolio more than that of common stock and bond portfolios

agency relationships in family firms theory and evidence does owner management necessarily eliminate the agency costs of ownership drawing on agency literature and on the economic theory of the household we argue that private ownership and owner management expose privately held owner managed firms to agency threats ignored by jensen s and meckling s 1976 agency model private ownership and owner management not only reduce the effectiveness of external control mechanisms they also expose firms to a self control problem created by incentives that cause owners to take actions which harm themselves as well as those around them jensen 1994 p 43 thus shareholders have incentive to invest resources in curbing both managerialand owner opportunism we extend this thesis to the domain of the family firm after developing hypotheses which describe how family dynamics and specifically altruism exacerbate agency problems experienced by these privately held owner managed firms we use data obtained from a large scale survey of family businesses to field test our hypotheses and find evidence which suggests support for our proposed theory finally we discuss the implications of our theory for research on family and other types of privately held owner managed firms

local versus global separability in agricultural household models the factor price equalization effect of land transfer rights commonly employed global tests for separability between production and consumption decisions are theoretically inappropriate when the market failures creating non separabilities differentially constrain some but not all households simulated maximum likelihood estimates using chinese panel data reject the restrictions implied by a global separability test in favor of regime specific or local separability tests the estimates also show that a global approach to separability obscures the significant effect that less encumbered land transfer rights would have on shadow factor price equalization across households and allocative efficiency the findings on transfer rights suggest a resolution to the debate in china on further property rights reform copyright 2002 oxford university press

partial gift exchange in an experimental labor market impact of subject population differences productivity differences and effort requests on behavior we report a gift exchange experiment firms make wage offers workers respond by determining an effort level higher effort is more costly to workers and firms have no mechanism for punishing or rewarding workers consistent with the gift exchange hypothesis workers provide more effort at higher wages but undergraduates provide substantially less effort than mbas evidence suggests this results from differences in prior work experience firms nonbinding effort requests are at least partially honored resulting in increased overall effort for undergraduates although higher wages are relatively more costly for lower productivity firms workers do not provide them with more effort

market frictions and consumption based asset pricing a fundamental equilibrium condition underlying most utility based asset pricing models is the equilibration of intertemporal marginal rates of substitution imrs previous empirical research however has found that the comovements of consumption and asset return data fail to satisfy the restrictions imposed by this equilibrium condition in this paper we examine whether market frictions can explain previous findings our results suggest that a combination of short sale borrowing solvency and trading cost frictions can drive a large enough wedge between imrs so that the apparent violations may not be inconsistent with market equilibrium

local and national determinants of office vacancies abstract a model of vacancy rate determination is estimated using over 30 years of data for 20 u s office markets the variances of individual city office vacancy rates are decomposed into common time varying components and city specific fixed effects city specific persistence terms are also included to allow for lagged adjustment toward equilibrium three striking results are obtained first we find that the level of equilibrium is predominately determined by local rather than national factors second we find that it is the random shocks causing local deviations from equilibrium which reflect the integration across markets specifically we find significant contemporaneous correlations of shocks across cities finally the results depict a dramatic level of persistence in all markets the model is then applied to determine whether the experience of the 1980 s represented a structural break in the underlying office market structure

bank lending and property prices in hong kong abstract this paper studies the relationship between residential property prices and bank lending in hong kong this is an interesting topic for three reasons first swings in property prices have been extremely large and frequent in hong kong second under the currency board regime monetary policy cannot be used to guard against asset price swings third despite the collapse in property prices since 1998 the banking sector remains sound while the contemporaneous correlation between lending and property prices is large our results suggest that the direction of influence goes from property prices to bank credit rather than conversely

a meta analysis of the international gender wage gap abstract since the early 1970s a number of authors have calculated gender wage differentials between women and men of equal productivity this meta study provides a new quantitative review of this vast amount of empirical literature on gender wage differentials as it concerns not only differences in methodology data and time periods but also different countries we place particular emphasis on a proper consideration of the quality of the underlying study which is done by a weighting with quality indicators the results show that data restrictions i e the limitation of the analysis to new entrants never marrieds or one narrow occupation only have the biggest impact on the resulting gender wage gap moreover we are able to show what effect a misspecification of the underlying wage equation like the frequent use of potential experience has on the calculated gender wage gap over time raw wage differentials worldwide have fallen substantially however most of this decrease is due to better labor market endowments of females

exports and property prices in france are they connected france has seen a marked deterioration in its export performance in the last 10 years or so previous empirical research pointed out that weak export performance was due to i vigorous domestic demand ii lower markups due to head to head competition with germany iii low non price competitiveness of french export goods iv offshoring of entire production processes especially in the automobile sector and v difficulties of french manufacturing firms to reach critical size for exporting this paper adds an additional explanation to this list we argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered france to meet world export demand vis a vis its products our econometric analysis shows that the resource reallocation argument helps explain french export performance between the early 2000s and 2007 unexplained by traditional models this result is confirmed for a set of oecd countries that experienced a marked decline in their export performance and sustained real estate boom after 2000

on the past and future of china s township and village owned enterprises abstract this paper proposes an explanation of the historical success of industrial enterprises owned by township and village governments in china i argue that conditions peculiar to china s prereform economy fostered the growth of a skilled workforce and high savings created unusual market niches and encouraged entrepreneurial undertakings by local political elites especially in areas adjacent to certain cities i then discuss the allocative and technical efficiency of local public enterprises in china from a theoretical standpoint and review some relevant econometric findings finally i consider proposals for reform of town and village enterprise tve ownership and discuss the possible advantages of cooperative forms

unequal pay or unequal employment a cross country analysis of gender gaps we analyze gender wage gaps correcting for sample selection induced by nonemployment we recover wages for the nonemployed using alternative imputation techniques simply requiring assumptions on the position of imputed wages with respect to the median we obtain higher median wage gaps on imputed rather than actual wage distributions for several oecd countries however this difference is small in the united states the united kingdom and most central and northern eu countries and becomes sizable in southern eu countries where gender employment gaps are high selection correction explains nearly half of the observed negative correlation between wage and employment gaps

commercial real estate prices and stock market returns an international analysis the movement toward globalization of institutional investments requires an understanding of the historical relationship between international commercial real estate price changes and stock returns previous studies have focused on the time series of stock and real estate returns using data from a single country by necessity these studies examined returns and price changes over short intervals creating a bias when property values are smoothed from year to year this study examines the relation between stock returns and changes in property values and rents based on data from 17 countries although we find no relation between real estate values and rents and stock returns in the united states we find significant relations in a number of other countries when the data are pooled the relation between stock returns and both value changes and changes in rental rates is very strong

ownership occupation and risk a view of the city of london office market office returns in the city of london are more volatile than in other uk markets this volatility may reflect fluctuations in capital flows associated with changing patterns of ownership and the growing linkage between real estate and financial markets in the city using current and historical data patterns of ownership in the city are investigated they reveal that overseas ownership has grown markedly since 1985 that owners are predominantly fire sector firms and that there are strong links between ownership and occupation this raises concerns about future volatility and systemic risk in a market strongly influenced by the cyclical behaviour and shocks of the international financial system

land tenure choice in chinese villages the rational versus the political model the rational and political decision models are developed and tested for the land tenure choice in rural china a novelty of the test is to link the collective decision with general relative factor scarcities competing hypotheses are developed for the two models and tested with panel data collected on 83 chinese villages the results show that neither model is strongly rejected although the political model fares slightly better in more sophisticated econometric testing this suggests that popular political participation is emerging in chinese villages implications of this finding to chinese land policy are discussed

investing in international real estate stocks a review of the literature this paper summarises the various findings of studies completed on the benefits of international diversification using real estate stocks with the increased availability of data and analytical tools the quantity and variety of work over the past decade have increased dramatically in this area the first two sections of the paper chronologically review the studies focusing on how the diversification benefits are analysed in a mixed asset portfolio context or a real estate only portfolio context the third section highlights work that uses alternative analyses to the traditional mean variance framework to examine the international real estate stock as an investment alternative almost all of the studies reach the same conclusion diversification gains are possible but are often reduced if currency risk is included in the analysis

from privatization to deindustrialization implications of chinese rural industry and the ownership debate revisited summary this paper examines the evolution of chinese rural industry since the rural reform in the late 1970s and revisits the debate on the role of ownership based on a case study of w county in southern jiangsu province as well as drawing on national data the author shows that the community based market dynamic had been a key factor in the expansion of rural enterprises and that its weakening in recent years has led to the closing of village enterprises and deindustrialization of the countryside large scale land expropriation sponsored by local government is the principal factor responsible for the change

global property investment and the costs of international diversification there is a trade off between the costs and benefits of international diversification this paper shows that the costs for property investors can be reduced substantially through investments in public real estate companies which concentrate on their local domestic market we compare the performance of 18 international operating property companies over the sample period 1984 through 1995 with the performance of property companies operating on their domestic market we find that the international companies underperform the domestic companies we also find this difference is not due to factors such as transaction costs leverage and currency

rational expectations uncertainty and cyclical activity in the british office market this study presents an econometric investigation of office building development in great britain the results show that the cyclical activity in office development measured by the changes in the office building output series compiled by the department of the environment is explained by the changes in hillier parker real office rents and changes in the volume of output in services there is also strong evidence that uncertainty originating in the volatility of rents exerted a negative influence on the rate of office development in the 1990s the study advances further the existing econometric treatment of office building development by undertaking direct tests of rationality and shows that the estimated model produces forecasts which are characterised by rational expectations it is established that information contained in the past history of office building output and variables which are considered to explain its cyclical pattern is efficiently and consistently incorporated the model also suggests

china s growing influence in southeast asia monetary policy and equity markets this study analyses the potential transmission of china s monetary policy shocks to equity markets in southeast asia impulse response functions indicate that the impact of a monetary expansion in china is significant and positive for four of the five southeast asian equity markets one explanation for this result is that monetary policy shocks in china lead to an increase in demand for goods and services in both china and abroad which then shows up in the foreign equity market the results in this paper provide evidence of china s influence in southeast asia and its financial markets the transmission effect is small and very short lived but can be expected to increase if the current trends of a deepening economic integration between china and southeast asia and a maturing chinese central bank continue

the gender wage gap in experimental labor markets abstract we analyze the gender wage gap in experimental markets women receive but do not request significantly lower wages than men this hurts firms as women react with low effort additionally women tend to react differently than men to wage levels

international transmission mechanisms and contagion in housing markets this paper explores international transmission mechanism and its role in contagion effect in the housing markets across six major asian cities the analysis is based on the identification of house price diffusion effects through a global vector autoregressive gvar model estimated using quarterly data for six major asian cities hong kong tokyo seoul singapore taipei and bangkok from 1991q1 to 2011q2 the empirical results indicate that the open economies heavily relying on international trade such as singapore japan tokyo taiwan taipei and thailand bangkok show positive correlations between the economy s openness and house prices which is consistent with the balassa samuelson hypothesis interestingly some region specific conditions also appear to play important roles as determinants of house price movements which may be driven by restrictive housing policies and demand supply imbalances such as singapore and bangkok these results are reasonably robust across several model specifications the findings bear significant implications for formulation of investment strategy and public policies

filtering risk away global finance capital transcalar territorial networks and the un making of city regions an analysis of business property development in bangalore india halbert l and rouanet h filtering risk away global finance capital transcalar territorial networks and the un making of city regions an analysis of business property development in bangalore india regional studies this paper contributes to ongoing debates on the landing or anchoring of global finance capital into the urban built environment inspired by recent advances from the school of territorial economics it develops the concept of transcalar territorial networks ttns to explain the processes that result in fixing foreign financial capital into business properties the paper demonstrates that ttns contribute to filter away the risks that foreign investors associate with the complexity of local regional property markets it also highlights the potential consequences on the spatial economic and social dynamics of city regions

are mortgage lenders guilty of the housing bubble a uk perspective existing theoretical models of house prices and credit rely on continuous rationality of consumers an assumption that has been frequently questioned in recent years meanwhile empirical investigations of the relationship between prices and credit are often based on national level data which is then tested for structural breaks and asymmetric responses usually with subsamples meen 1999 argues that local markets are structurally different from one another and so the coefficients of any estimated housing market model should vary from region to region we investigate differences in the price credit relationship for 12 regions of the uk markov switching is introduced to capture asymmetric market behaviours and turning points results show that credit abundance had a large impact on house prices in greater london and nearby regions alongside a strong positive feedback effect from past house price movements this impact is even larger in greater london and the south east of england when house prices are falling which are the only instances where the credit effect is more prominent than the positive feedback effect a strong positive feedback effect from past lending activity is also present in the loan dynamics furthermore bubble probabilities extracted using a discrete kalman filter neatly capture market turning points

exchange rate uncertainty forward contracts and international portfolio selection in this paper ex ante efficient portfolio selection strategies are developed to realize potential gains from international diversification under flexible exchange rates it is shown that exchange rate uncertainty is a largely nondiversiflable factor adversely affecting the performance of international portfolios therefore it is essential to effectively control exchange rate volatility for that purpose two methods of exchange risk reduction are simultaneously employed multicurrency diversification and hedging via forward exchange contracts the empirical findings show that international portfolio selection strategies designed to control both estimation and exchange risks almost consistently outperform the u s domestic portfolio in out of sample periods since grubel 11 applied modern portfolio theory mpt to international investment various authors such as levy and sarnat 17 solnik 20 and lessard 16 have examined the gains from international diversification of investment portfolios for the purpose of establishing the gains from international diversification these studies constructed international portfolios using historical risk and return data from a period of fixed or relatively stable exchange rates and showed that internationally diversified portfolios dominated purely domestic portfolios in terms of mean variance efficiency from the standpoint of today s investors however the previous studies fail to offer operational guidance for international diversification for two important reasons first it is now questionable whether the past findings are still relevant under the current flexible exchange rate regime second by being ex post in nature the past studies ignored the issue of estimation risk or parameter uncertainty and therefore may have overstated the realizable portion of the potential gains from international diversification fluctuating exchange rates are likely to mitigate the potential gains from international diversification by making investment in foreign securities more risky as will be shown later a fluctuating exchange rate contributes to the risk of foreign investment not only through its own variance but also through its positive covariances with the local stock market returns during our sample period of 1980 through 1985 for example exchange rate volatility is found to account for about fifty percent of the volatility of dollar returns from investment in the stock markets of such major countries as germany japan and the u k furthermore the exchange rate changes vis a vis the u s dollar are found to be

a note on globalization and urban residential rents abstract we present evidence on the impact of international economic openness upon residential real estate consistent with the well known balassa samuelson effect which suggests that increasing openness raises relative prices of non tradable goods and services using a data set for 46 cities in different countries we find that urban rents are positively affected by the openness of the economy and by city size

the structure of interdependence in international stock markets abstract this study investigates the dynamic structure of nine major stock markets using an error correction model and directed acyclic graphs dag the dag representation provides a structure of causality among these markets in contemporaneous time building on this contemporaneous structure and the estimated error correction model innovation accounting techniques are applied the results show that the japanese market is among the most highly exogenous and the canadian and french markets among the least exogenous in our nine market study the us market is highly influenced by its own historical innovations but it is also influenced by market innovations from the uk switzerland hong kong france and germany the us market is the only market that has a consistently strong impact on price movements in other major stock markets in the longer run

long term global market correlations the correlation structure of the world equity markets varied considerably over the past 150 years and was high during periods of economic integration we decompose diversification benefits into two parts one component due to variation in the average correlation across markets and a another component due to the variation in the investment opportunity set from this we infer that periods of globalization have both benefits and drawbacks for international investors globalization expands the opportunity set but as a result the benefits from diversification rely increasingly on investment in emerging markets

markets discrimination and the economic contribution of women in china historical evidence data from a 1935 household survey of economic activity in manchuria rural northeast china are used to examine womens economic role findings are similar to findings from bucks framework for understanding womens agricultural roles in the winter wheat kaoliang region the results should not be generalized to the rest of china in 1935 women contributed to the household about as much as males ordinary least squares estimation suggests that total male contribution to household income was direct and direct female contribution ranged between 50 and 66 of the total income direct contribution by women shows a range across villages in high 40 commercialized areas with significant opportunities for off farm sales direct female contributions were statistically indistinguishable from that for males in low 10 commercialized areas female direct contributions were small in high commercialized areas men tended to work off farm and women took on greater farming roles the patterns were suggestive of the influence of womens agricultural productivity on time allocation the findings imply an underestimation of the role of women in agriculture pre 1949 the influence of collectivization on the role of women may not have been as great after 1949 as previously determined productivity considerations influenced allocation to farming and nonmeasurable household production reforms may have contributed to greater discrimination and costs today than pre 1049 land rental regulations which are constrained by political forces and land availability were a limitation on the ability of rural households to adjust to social changes

segmented or competitive labour markets a normal roy model with four sectors is developed it allows to derive tests of several assumptions on the working of the labor market strongly or weakly competitive or segmented it shows that more important a feature of labor markets than segmentation is the presence of comparative advantages for individuals between the various economic sectors the model is applied to data on women s labor force participation in the main towns of colombia in 1980 it uses multivariate probit and tobit techniques copyright 1991 by the econometric society

serial correlation and the fixed effects model this paper generalizes the durbin watson type statistics to test the ols residuals from the fixed effects model for serial independence also generalized are the tests proposed by sargan and bhargava for the hypothesis that the residuals form a random walk a method for efficient estimation of the parameters is also developed finally an earnings function is estimated using the michigan survey of income dynamics in order to illustrate the uses of the tests and the estimation procedures developed in this paper

structural breaks and diversification the impact of the 1997 asian financial crisis on the integration of asia pacific real estate markets abstract currently there exists relatively little research on the influence that the 1997 asian financial crisis has had upon capital flows within the property market and the associated long run implications of it this paper examines the impact that the crisis has had upon the integration and dynamic links between a number of asia pacific real estate markets the results show that asia pacific property markets are integrated despite a structural shift occurring at the time of the crisis these results are a particularly important finding for fund managers concerned with the impact of globalization on the performance of their real estate portfolios showing that in the asia pacific region diversification benefits are actually less than that suggested by an analysis incorrectly ignoring the crisis

land and stock prices in japan in late 1991 the total land value in japan was estimated at nearly 20 trillion this was more than 20 percent of the world s wealth or to put it in some other contexts about double the world s equity markets or half again as large as the world s bond markets japanese land was then valued at about five times that of the united states the land under the emperor s palace which is about three quarters of a square mile was estimated to be worth about the same as all the land in california or in canada real estate assets of japanese corporations grew by 2 8 trillion from 1986 to 1988 an increase in valuation roughly equal to the size of the japanese gross national product an equally dramatic rise in stock prices accompanied the rise in land prices at its peak in december 1989 the japanese stock market had a value of about 4 trillion which was about 44 percent of the world s equity market capitalization to put that figure in perspective the value of the equity on all the stock exchanges in the united states in august 1992 was less than 5 trillion but then from its peak in december 1989 to august 1992 the japanese stock market fell by over 60 percent various indices of speculative land values fell a similar amount meanwhile other land prices industrial commercial residential as measured by various indices fell 15 20 percent this paper discusses the rise of japanese stock and land prices in the past four decades and their dramatic decline in the early 1990s to what extent can

savings and loan ownership structure and expense preference abstract this paper studies the influence of ownership structure on managerial expense preference behavior the hypothesis is that the greater the diffusion of ownership the weaker is the monitoring by owners and the greater is the degree of expense preference behavior whereas expense preference behavior affects inputs particularly on the job consumption of managers well functioning managerial labor markets should resolve the problem by equating the total compensation of managers across firms of different ownership structures a more serious problem however is the potential impact of expense preference behavior on output evidence from the savings and loan industry is adduced indicating that the more diffuse ownership structures associated with mutuality exhibit greater agency costs through the expansion of inputs and outputs beyond profit maximizing levels

international diversification with securitized real estate and the veiling glare from currency risk this paper analyzes diversification benefits from international securitized real estate in a mixed asset context we apply regression based mean variance efficiency tests conditional on currency unhedged and fully hedged portfolios to account for foreign exchange risk exposure from the perspective of a us investor it is shown that first international diversification is superior to a us mixed asset portfolio second adding international real estate to an already internationally diversified stock and bond portfolio results in a further significant improvement of the risk return trade off and third considering unhedged international assets could lead to biased asset allocation decisions not realizing the true diversification benefits from international assets our in sample results are quite robust in out of sample analysis and when investment frictions like short selling constraints are introduced

currency hedging for international portfolios this paper examines the benefits from currency hedging both for speculative and risk minimization motives in international bond and equity portfolios the riskreturn performances of globally diversified portfolios are compared with and without forward contracts over the period 1974 to 1990 inclusion of forward contracts results in statistically significant improvements in the performance of unconditional portfolios containing bonds conditional strategies are also implemented both in sample and out of sample and are shown to both significantly improve the risk return tradeoff of global portfolios and to outperform unconditional hedging strategies whether international portfolios should be hedged against currency risks is the subject of an active debate the theoretical side of the debate has been closely associated with two strands in the academic literature international asset pricing and optimal hedging in the futures markets in the international asset pricing model iapm of solnik 1974 optimal portfolios contain positions in forward contracts or equivalently foreign currency denominated bills these positions which can differ from the positions in foreign stocks have since been termed hedges black 1990 shows that under additional assumptions the hedge ratios should be identical for all investors regardless of their nationality universality and that investors should never fully hedge their foreign currency exposures similarly theoretical models from the futures literature produce demands for hedging instruments that contain both speculative and hedging components the empirical issue unanswered so far is whether adding forward contracts to international portfolios significantly improves the risk return profile of global investments empirical research has barely begun to respond to the challenges of theoretical models there exists little empirical evidence on either the relevance of black s universal hedge ratios or the optimality of hedge ratios less than one instead researchers have concentrated on the benefits of fully hedging exchange risk for example eun and resnick 1988 indicate that stock portfolios perform better when fully hedged but offer no statistical tests

owner managers and firm performance during the asian and global financial crises evidence from korea abstractwe examine the performance of the korean owner managers during the 1997 1998 asian financial crisis and the 2008 2009 global financial crisis to establish whether they overcome the unexpected exterior shocks better than employed managers we find that the owner managers record a significantly greater performance during the crises and especially during the latter period moreover our results suggest that such a tendency comes from the owner managers superior investment decisions our paper thus highlights the role of owner managers by studying their performance during the korean economic crisis periods jel g01 g32 g34

efficiency and the bear short sales and markets around the world we analyze cross sectional and time series information from 46 equity markets around the world to consider whether short sales restrictions affect the efficiency of the market and the distributional characteristics of returns to individual stocks and market indices we find some evidence that prices incorporate negative information faster in countries where short sales are allowed and practiced a common conjecture by regulators is that short sales restrictions can reduce the relative severity of a market panic we find strong evidence that in markets where short selling is either prohibited or not practiced market returns display significantly less negative skewness

a test of dual labor market theory despite substantial differences in their views of the appropriate policy response to the existence of poverty neither the proponents of dual market theory nor its critics have proposed potentially conclusive tests of the dual market hypothesis this paper presents a test of the two central propositions of dual market theory 1 the existence of two distinct labor markets with different wage setting mechanisms and 2 the existence of barriers to mobility between the labor markets we find considerable support for both hypothesis estimation of a switching model of wage determination with unknown regimes yields two distinct wage equations the one which most workers are associated with closely resembles the standard human capital regression with significant returns to education and experience the other equation is flat with no returns to human capital these two equations resemble the predictions of dual market theory for the primary and secondary markets respectively further we present evidence that at least some non white workers are involuntarily confined to the secondary market this crowding of minority workers into the low wage labor market accounts for a substantial portion of white non white wage differences we interpret these results as providing empirical support for the dual market hypothesis and for recent theoretical work on efficiency wagemodels in addition combining the efficiency wage argument with the observation that much of the white non white wage difference is explained by the exclusion of non whites from the primary sector suggests an explanation for the persistance of wage differences this abstract was borrowed from another version of this item

the development of the land lease market in rural china this paper examines the development of the land lease market in rural china special attention is paid to productive heterogeneity among farmers and the openness of the labor market in activating the land lease market a theoretical model is employed to explore the underlying connections an econometric model is implemented using a two period panel data set gathered in three counties of china s zhejiang province the results show that productive heterogeneity and a freer labor market do promote more land leases the implications for the institutional change literature are discussed

the impact of regional and institutional factors on labor productive performance evidence from the township and village enterprise sector in china this paper investigates the determinants of township and village enterprise tve labour productivity in china examining behaviour at both the national and regional levels the results suggest that human capital the real wage level foreign intensity export intensity capital investment and firm size are the most important factors affecting labour productivity at the national level but their relative importance varies significantly between the regions the results also indicate that government privatization reforms had a major impact on labour productivity in the tve sector across the regions

conjoint analysis of industry location preferences evidence from the softwood lumber industry in the us conjoint analysis ca was used to study location preferences among members of the softwood lumber industry in the southern and western regions of the us this industry was selected as an example of a resource based industry to test several hypotheses derived from location theory decision makers owners and managers identified price of logs and distance to sources for logs as the most important location factors a secondary category included wages and energy costs other variables such as cost of land quality of access roads and distance to markets are less important there were statistically significant differences in the part worth estimates of raw materials and wage costs among decision makers but not between regions in an ordered model for site preference marginal analysis of the price of logs stressed its importance as the major location factor in the softwood lumber industry

moving toward markets labor allocation in rural china abstract china s economic reforms have brought rapid growth in rural off farm employment raising questions about the assumption that rural china is labor surplus and has poorly functioning factor markets we investigate this by testing for separability between household labor demand and supply using panel data we find that separability is rejected overall indicating that factor markets remain underdeveloped nonseparability however is associated with labor surplus in some areas and labor shortage in others moreover separability holds where substantial employment opportunities exist in the wider township suggesting that such employment promotes competitive allocation within villages as well as the inter village movement of resources

middle class without a net savings financial fragility and preferences over social insurance in this article we show that it is crucial to distinguish between liquid and illiquid wealth to understand how voters form preferences toward social insurance many households are financially frag

self selection and the distribution of hourly wages this article formulates and estimates alternative equilibrium models of industrial wage determination and self selection in explaining industrial wage differentials we find that it is important to account for heterogeneous sector specific skills and self selection decisions by agents concerning their sector of employment the classical roy model is rejected so is an efficiency units model of the labor market a revised roy model that accounts for comparative advantage in the choice of industrial sectors and choice between market and nonmarket work is much more successful in explaining cross section wage distributions and their evolution over time

trade openness and economic growth a cross country empirical investigation abstract this paper demonstrates that trade liberalization does not have a simple and straightforward relationship with growth using a large number of openness measures for a cross section of countries over the last three decades we use two groups of trade openness measures the regression results for numerous trade intensity ratios are mostly consistent with the existing literature however contrary to the conventional view on the growth effects of trade barriers our estimation results show that trade barriers are positively and in most specifications significantly associated with growth especially for developing countries and they are consistent with the findings of theoretical growth and development literature

an investigation of the labor market earnings of panamanian males evaluating sources of inequality this paper presents empirical evidence on the determinants of labor market earnings and inequality for males in panama using newly available microdata we estimate earnings equations based on the measurement framework of mincer 1974 and compare them with those for other countries at various stages of economic development we present evidence on two aspects of inequality in less developed economies labor market segmentation and social stratification we present tests of the segmentation hypothesis including several of the dual labor market hypotheses and discuss their inherent ambiguity we also present evidence on the importance of family background for earnings determination and educational attainment

rural industry and labor market integration in eastern china abstract this paper tests the competitiveness of the labor market in a semi industrialized county located in eastern china labor market segmentation is linked to the degree of government interventions and the management structures of the local enterprises and two forms of rationing labeled entrance and time rationing are identified a test based on income maximizing behavior is developed to find the form of rationing that is consistent with the data the results show that the labor market is not competitive and time rationing prevails in the county in addition industrial wages are not responsive to experience and education but strongly biased against women and varying to government interventions

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

long and short term dynamic causal transmission amongst international stock markets abstract this paper investigates the dynamic causal linkages amongst nine major international stock price indexes in order to gauge the causal transmission patterns we employ very recent methods of i vector error correction modeling and ii level var modeling with possibly integrated and cointegrated processes advocated by i toda and phillips econometrica 61 1993 1367 and ii toda and yamamoto j econometrics 66 1995 225 respectively the paper illustrates how such methods may be appropriately augmented in a compatible fashion to unearth previously unfounded linkage properties inherent amongst a system of stock price indexes in particular we demonstrate that previous research by using ordinary difference vars ignored an important component of linkages displayed purely over the long run this untapped evidence essentially provides robust and very useful information to international financial analysts and investors at a substantive level results of this study tend to support the contention offered by several studies in the literature of significant interdependencies between the established oecd and the asian markets and also the leadership of the us and uk markets over the short and long run the levels var however illustrate the japanese market s influence as an additional long run leader findings seem to be plausible given that these three markets us uk and japan have consistently contributed over 75 of global stock market capitalization over the major part of the sample under consideration at a methodological level this analysis also provides a primer for the wealth of applied financial econometric research focusing on dynamic causal inference which involve systems containing possibly integrated and cointegrated processes

education and off farm work an investigation is presented of the determinants of educational selectivity in a framework that emphasizes the coordination of household members sectoral time allocation is based on members comparative advantage which in turn depends on the utilization and returns to schooling in the farm and nonfarm sectors central to the model is a knowledge spillover hypothesis that workers who participate in off farm work may still contribute knowledge to farm management estimation of the model is based on cross sectional chinese farm household data collected in 1990 from 204 households in sichuan province it is concluded that schooling does not enhance labour productivity when carrying out routine tasks that the contribution to farm efficiency by the most educated members is not affected by their non farm participation and that schooling increases labour market wage rates these empirical results give comparative advantage for the better educated farmers to work off the farm

estimates of the variance of u s inflation based upon the arch model it is generally agreed that the unpredictability of future inflation is a major component of the welfare loss associated with inflation perfectly predicted inflation might induce some costs through institutional rigidities governmental interference and transaction costs but in the long run these should be rather minimal as these institutions adopt various forms of indexing when inflation is unpredictable risk averse economic agents will incur a loss even if prices and quantities are perfectly flexible in all markets inflation is a measure of the relative price of goods today and goods tomorrow thus uncertainty in tomorrow s price impairs the efficiency of today s allocation decisions friedman in his nobel lecture 8 argues convincingly that higher variability of inflation would lead to decreased output ceteris paribus he then conjectures that higher rates of inflation are generally associated with higher variability of inflation and presumably greater uncertainty about future rates if this is true then higher rates of inflation would also be associated with low levels of output which implies a positively sloped phillips curve this paper uses a new statistical technique arch to estimate the conditional mean and variance of inflation from u s time series data the main finding is that the variance of inflation in the seventies was only slightly greater than in the sixties

labor migration and returns to rural education in china this paper provides an answer to the following question why do empirical studies find low returns to schooling in rural china and yet the schooling rates are high i find that schooling played a significant role in raising the accessibility of urban formal employment to rural people in the late 1970s and early 1980s in the face of the government s restrictive policy on labor migration from rural to urban areas the large urban rural income difference provided a strong incentive for senior high school education the theory also explains the drop in the senior high school attendance in the mid 1980s

currency hedging for international stock portfolios the usefulness of mean variance analysis abstract we test whether hedging currency risk improves the performance of international stock portfolios we show that an auxiliary regression provides a wealth of information about the optimal portfolio holdings for non mean variance investors analogous to the information provided by the jensen regression about optimal portfolio holdings for the mean variance case we find that static hedging with currency forwards does not lead to significant improvements in portfolio performance for a us dollar based stock portfolio from the g5 countries whereas dynamic hedges that are conditional on the interest rate spread do these conclusions hold for both mean variance and power utility investors and show up both in sample and out of sample however the optimal forward positions can differ significantly for both types of investors

education and allocative efficiency household income growth during rural reforms in china this paper studies the contribution of schooling to rural income in china during factor market liberalization between 1986 and 1995 the relaxation of controls permitted farm households to reallocate productive inputs from agriculture to nonagricultural activities it is hypothesized that education facilitates this adjustment panel data from sichuan province suggest that schooling enhanced the ability of farmers to devote labor and capital to nonfarm production given the evidence that less than optimum levels of these inputs were allocated to nonagricultural uses during the transition the expansion of nonfarm activities contributed significantly to household income growth

who is afraid of political risk multinational firms and their choice of capital structure this paper investigates how multinational firms choose the capital structure of their foreign affiliates in response to political risk we focus on two choice variables the leverage and the ownership structure of the foreign affiliate and we distinguish different types of political risk such as expropriation unreliable intellectual property rights and confiscatory taxation in our theoretical analysis we find that as political risk increases the ownership share tends to decrease whereas leverage can both increase or decrease depending on the type of political risk using the microdatabase direct investment of the deutsche bundesbank we find supportive evidence for these different effects

mean variance convergence around the world abstract in this paper we show i that the risk return characteristics of our sample of 17 developed stock markets of the world have converged significantly toward each other during our study period 1974 2007 and ii that this international convergence in risk return characteristics is driven mainly by the declining country effect rather than the rising industry effect suggesting that the convergence is associated with international market integration specifically we first compute the risk return distance among international stock markets based on the euclidean distance and find that the distance thus computed has been decreasing significantly over time implying a mean variance convergence in particular the average risk return distance has decreased by about 50 over our sample period we also document that the risk return characteristics of our sample of 14 emerging markets have been converging rapidly toward those of developed markets in recent years this development notwithstanding emerging markets still remain as a distinct asset class lastly we show that the convergence in risk return characteristics has exerted a negative impact on the efficiency of international investment during our sample period

gains from international diversification 1968 85 returns on portfolios of stocks and bonds this paper applies the multi period investment model to a universe of international securities on the basis of the simple probability assessment approach our principal findings are 1 the gains from including non u s asset categories in the universe were remarkably large in some cases statistically significant especially for the highly risk averse strategies 2 the gains from removing the no leverage constraint were more substantial than they were in the absence of non u s securities and 3 there is strong evidence of market segmentation in that the optimal levels of investment in u s securities were mostly zero in the presence of the non u s asset categories

why do entrepreneurs enter politics evidence from china this article examines the determinants of the entrepreneur s political participation by employing a unique matched firm institution data set from china we find that the likelihood of an entrepreneur s participation can be explained by the underdevelopment of markets and market supporting institutions according to our estimates the probability of entering politics decreases by 8 20 from the mean when the institutional indices improve by one standard deviation our findings support the view that the institutional environment shapes the private entrepreneur s motivation to participate in politics they also provide an example of how private entrepreneurs respond to state market failure in developing and transition countries jel g1 h00 o10 p2 p3

public versus private ownership of firms evidence from rural china why are many of china s successful rural enterprises publically owned by local communities using a set of provincial data we find that the share of community public firms township village enterprises or tves relative to private enterprises is higher where the central government s influence is greater the community government s power is stronger and the level of market development is lower we also find that tves help achieve the community government s goals of increasing government revenue rural nonfarm employment and rural income however tves do not increase rural income given the levels of nonfarm employment and local public goods provision indicating possible inefficiency as compared with private enterprises