bluuebunny/crossref_metadata_2025 huggingface dataset:
Availability allocation through importance measures
Authors: Barabady Javad , Kumar Uday
Published: June 2007

Purpose

To define availability importance measures in order to calculate the criticality of each component or subsystem from the availability point of view and also to demonstrate the application of such importance measures for achieving optimal resource allocation to arrive at the best possible availability.

Design/methodology/approach

In this study the availability importance measures of a component are defined as a partial derivative of the system availability with respect to the component availability, failure rate, and repair rate. Analyses of these measures for a crushing plant are performed and the results are presented. Furthermore, a methodology aimed at improving the availability of a system using the concept of importance measures is identified and demonstrated by use of a numerical example.

Findings

The availability importance measure of a component/subsystem is an index which shows how far an individual component contributes to the overall system availability. The research study indicates that the availability importance measures could be applied in developing a strategy for availability improvement. The subsystem/component with the largest value of importance measure has the greatest effect on the system availability.

Research limitations/implications

The result of availability improvement strategy is demonstrated using only a hypothetical example.

Practical implications

Using availability importance measures will help managers and engineers to identify weaknesses and indicate modifications which will improve the system availability.

Originality/value

This paper presents the concept of availability importance measure for a component/subsystem. It also introduces some availability importance measures based on failure rate, mean time between failures (MTBF), and repair rate/mean time to repair (MTTR) of a component /subsystem. The concept of importance measures is used to prioritise the components or subsystems for the availability improvement process.
We've got to stop meeting like this
Authors: Marren Patrick
Published: June 2007

Purpose

The paper provides the author's opinions about key issues in strategy and the future to the readership.

Design/methodology/approach

The paper takes the form of an opinion column.

Findings

Different sizes of groups must be used for different business purposes.

Research limitations/implications

The paper is based not on rigorous research, but on the author's experience of planning engagements across a wide variety of private and public enterprises.

Practical implications

The paper illustrates a couple of points that are perhaps insufficiently appreciated.

Originality/value

The paper expresses opinions that the author believes have not been expressed in quite this way before.
Enhancing ICT skills: the how, who and when ‐ illustrations from the JUBILEE project
Authors: Gannon‐Leary Pat , Banwell Linda , Childs Sue
Published: June 2007

This article reports on findings from the first cycle of the three year JUBILEE (JISC User Behaviour in Information‐seeking: Longitudinal Evaluation of EIS) project, being undertaken at the Information Management Research Institute at the University of Northumbria, in respect of the degree to which students and academics in Higher Education lack the necessary skills to take full advantage of EIS. The skills are examined in subsets: IT literacy skills; information searching skills; evaluative & critical skills; and information handling skills. In addition there is discussion on how best to upskill students and at what point in their academic careers. Another debate, common at several JUBILEE case study sites, focuses on whether such upskilling is better delivered by academics or LIS personnel.
New standards or old? An issue for teachers supporting distance learners
Authors: Kennedy David
Published: June 2007

The relative recency of online, networked distance education poses a question for teachers: Do the standards that were developed for the delivery of classroom‐based education apply to this newer ‘virtual’ educational environment? The author argues that the answer is broadly ‘Yes’, but identifies a significant gap in current standards.
Security policy ‐ an individual view
Authors: Harlow John
Published: June 2007

The paper discusses the need for a security policy and how one can be drawn up and implemented. It includes a model Information Security Management Policy.
Developed nationally, delivered locally: taking forward the Resource Discovery Network
Authors: Jennings Simon , Griffiths Tessa
Published: June 2007

Following an introduction describing the history of Resource Discovery Network “RDN”, the authors look to the future, particularly the RDN’s relationship to subject librarians’ activity in developing local lists of web links. Research showing the considerable overlap in content between the RDN and such lists is presented and, in the context of a future strategy for offering RDN content through local institutional interfaces, initial developments using XML as well as future plans in this area are outlined.
What is an ANGEL?
Authors: Harris Nicole
Published: June 2007

The ANGEL (Authenticated Networked Guided Environment for Learning) project is funded under the JISC DNER 05/99 call. LITC’s involvement in the project includes responsibility for the initial formative evaluation, continuing dissemination and monitoring activities, and the summative evaluation of the system. This articled iscusses the formative evaluation process undertaken for the project by LITC between January and March 2001. The results of this process show that although users have a clear idea of the experience they wish to have within a learning environment, there are many concerns and problems that prevent institutions achieving this experience. Despite the fact that users consistently cite library resources as essential for online learning, they have no clear idea of how learning environments can be developed to improve delivery of resources. The full report of the evaluation can now be found on the ANGEL web site, together with the interview questions and results.
Building the enterprise of the future
Authors: Murray Arthur J. , Sekella Matthew E.
Published: June 2007

Purpose

The paper seeks to examine briefly the economic drivers of the past, how those drivers have changed, and how business and government leaders need to respond by transforming their organizations into knowledge‐based enterprises.

Design/methodology/approach

The approach applies the principles of classical economic theory, which were grounded primarily in the valuation of tangible goods, to an economy in which intangible goods, such as information and knowledge, are the predominant forms of capital.

Findings

The perishability of intangible goods is accelerating, and is further exacerbated by increased globalization. Valuation‐based theories of money and pricing, which have been overlooked in the past, have resurfaced, and must be understood and practised by business and government leaders alike. In response to these challenges, organizations must design and implement systems which support fast learning and rapid innovation. These new systems are called “knowledge factories”.

Practical implications

The major shifts in the economy are not readily visible on the surface. In order to compete in a flat world, business and government leaders must revisit classical economic theory and understand how to apply it to today's knowledge economy. For example, in the past, talent moved to where it was treated best. Now, the knowledge workforce lives where it chooses, and much of the work comes to them. This has significant human capital and supply chain consequences.

Originality/value

There are many positive outcomes, not the least of which is a more robust economy that takes full advantage of globalization, possibly to the point of approaching a system of near‐perfect competition. With the eventuality of bringing six billion minds to bear on solving complex problems, the potential exists for a greatly improved lifestyle, continued explosive growth in human knowledge, and increased prosperity, especially for those at the bottom of the economic pyramid.
Digital social network technology and the complex organizational systems
Authors: Hasgall Alon , Shoham Snunith
Published: June 2007

Purpose

In a competitive business environment, organizations must leverage their resources efficiently in order to provide system‐wide solutions and maintain the standards all customers expect. To do so, the resources must be integrated; however, the integration of information and resources within organizations has thus far not produced satisfactory results. In contrast, it has been found that efficient, ongoing and timely transfer of information is conducted over the internet. This research seeks to examine whether the use of internet technology within organizations can indeed enhance and streamline the ability of employees to function as fractals in complex organizations.

Design/methodology/approach

The research is a qualitative study, allowing for the examination of behavior in the organizational reality as is, by analyzing interviews and observations of over 60 employees in different organizations.

Findings

It is found that the ability of a digital social network to create immediate system‐wide solutions, together with a management approach that transforms the organization into a complex adaptive system, allows employees to behave as fractals – i.e. to share applied‐knowledge, to take responsibility for performance and management of the processes, to update their superiors, and to develop self‐management abilities at the local level.

Originality/value

Social networks in organizations should be viewed as a shared “knowledge” system. Use of the network is “natural” and less rational and synchronized up front. However, it must be backed by a relevant management culture that enables all employees to serve as fractals in a complex adaptive system. In this manner, employees can contribute personally to work processes, determine their needs, and receive credit.
Commercial satellite imagery: CI, KM, and trade secret law
Authors: Gayton Cynthia M.
Published: June 2007

Purpose

The purpose of this paper is to examine the implications of remote surveillance or satellite imagery as they relate to trade secret law, knowledge management, and competitive intelligence.

Design/methodology/approach

The paper approaches legal issues from the perspective of a trade secret holder.

Findings

While conducting research for this paper, it was found that, while technological improvements relating to satellite imagery and remote sensing are increasingly more precise and ubiquitous, the laws protecting businesses that have an interest in protecting trade secrets are inconsistent. On the one hand, the US Government has given itself a powerful tool to protect trade secrets under the Economic Espionage Act. On the other hand, the Government has granted remote satellite companies licences under which they may sell satellite images to industrial competitors, consequently thwarting trade secret protection efforts

Originality/value

Trade secrets represent a valuable contribution to a nation's economy, particularly when some interventions do not meet the requirements necessary for more traditional intellectual property regime protection (e.g. copyright, trade mark, patents). A trade secret's value lies in it remaining hidden. There are few cases addressing trade secrets and satellite imagery. The stalwart case, E.I. duPont deNemours & Co., Inc. v. Rolfe Christopher, represents a tentative foray into the subject, but only suggests the rights a trade secret holder may have when a commercial satellite company collects otherwise innocuous data and sells those to a competitor. A proper plaintiff to test the boundaries surrounding trade secret law, satellite imagery, and competitive intelligence remains at large.
New epoxy resins for printed wiring board applications
Authors: Hoevel Bernd , Valette Ludovic , Gan Joseph
Published: June 2007

Purpose

This paper seeks to give an overview of problems arising with the change to lead‐free soldering and to give guidance on possible counter actions in the context of the chemical structure of the base material.

Design/methodology/approach

The paper contains a number of correlations between different physical measurements and their impacts on real life processing conditions. The problem areas are highlighted and the corrective actions that need to be taken on the base materials are described. The impact of the choice of flame retardant on material properties is demonstrated.

Findings

Results suggest that conventional resin systems seem to be still suitable for standard FR‐4 applications with only a few reflow cycles. Higher thermally resistant products are necessary for more complex structures that require multiple reflow cycles. There are basically two ways to increase the thermal resistance. Replace dicyandiamide by a phenolic hardener or change to a bromine‐free flame retardant. Both approaches are successful in raising the decomposition temperature, with the latter having the additional advantage of achieving better electrical performance and lower density.

Originality/value

The value of the paper lies in its ability to provide guidance on the critical base material properties. It describes the change in physical properties that laminates will see when moving up in temperature to facilitate lead‐free soldering. Selection criteria for base materials are given in order to neutralize the impact of the higher temperature.
Sequential Experimental Study and Optimisation of
an Acid Copper Pattern Plating Process
Authors: Poon G.K.K.
Published: June 2007

Sequential application of fractional factorial and response
surface designs in the regression modelling and optimisation of a multi‐parameter type
manufacturing process is presented. In particular, the coating thickness variation of an acid copper
plating process was minimised with high bath acidity, high cathodic current density and large
anode‐cathode separation. Statistically designed experiments are shown to be highly effective
in studying the effects and interactions of the various process factors.
Issues Affecting Early Affordable Access to Leading Electronics Technologies by the US
Military and Government
Authors: Pecht M.G.
Published: June 2007

Military electronics have typically been isolated from mainstream developments due to military unique requirements,
specifications and procurement policies. As a consequence, military electronics systems have not
profited from many of the commercial technological advancements and the lessons learned. Based on
an understanding of this problem, DoD policy directives are now changing, although there are attempts
to resist or side‐step implementation. To understand the key issues
affecting early affordable access to leading electronics technologies by the US military and government,
it is necessary to understand those military and government policies, regulations and organisations that
have influenced both directly and indirectly, purposefully and accidentally, electronics effectiveness and
worth. This paper provides a perspective to some of the key issues and critical differentiators between
US military/government and commercial approaches to electronics.
Comparison of Methods for Characterising Soldering Fluxes and their
Interactions with Substrates and Metallisation
Authors: Turbini L.J.
Published: June 2007

The 1980s and 1990s have seen the development of new and
interesting soldering flux formulations. Many of these fluxes exhibit improved soldering
performance or are favoured because of their reduced environmental impact. In order to further
the understanding of these new fluxes and their interaction with the metallisation on the printed
wiring board, as well as the substrate itself, one needs to examine test methods carefully and
begin to correlate the data among the existing test methods. At Georgia Tech a variety of data
have been collected on a number of fluxes including water soluble, low solids and activated rosin
fluxes. Test methods for flux characterisation include surface insulation resistance testing,
corrosion test measurements and recently impedance spectroscopy at low frequencies. This paper
will review the variety of fluxes available, report on results of testing these fluxes using the
techniques mentioned above and will define the important information related to soldering flux
interactions which each test method uncovers.
Hollow Fibres in PCB, MCM‐L and PBGA Laminates May Induce Reliability Degradation
Authors: Shukla A. , Pecht M. , Jordan J. , Rogers K. , Jennings* D.
Published: June 2007

The presence of hollow fibres in laminates used in printed circuit boards, multichip module
laminated substrates, and plastic ball grid arrays has a potentially significant impact on reliability.
Hollow fibres are vacuous glass filaments in E‐glass laminate reinforcements and are
seen as a reliability problem since they can provide paths for failure mechanisms such as
conductive filament formation. This paper discusses the manufacture of woven fabric laminates
and the cause of hollow fibres. Experiments conducted to assess the occurrence of hollow fibres
in laminates are then presented along with the key reliability issues.
6. Nobel Laureate: Sir John R. Hicks (1904‐1989)
Authors: Rugina Anghel N.
Published: June 2007

Introduces Hicks, from the UK, and his classical upbringing, including his mathematical scholarships and Oxford. Looks at his early career as a lecturer at the London School of Economics and his development in the economics field. Concludes that Hicks was an original thinker, giving thanks to his immense contributions.
Human resource management and Native people: a checklist of concerns and responses
Authors: Walle Alf H.
Published: June 2007

Purpose

The paper aims to show that human resource management professionals need to consider the uniqueness of Native, indigenous, and traditional people.

Design/methodology/approach

A number of key issues demanding attention are analyzed in a non‐exhaustive discussion of relevant topics.

Findings

The paper finds that organizations may lack the perspectives, insights, and skills they need to effectively respond to the needs and demands of employees/potential employees who are members of Native, indigenous, and traditional cultures.

Originality/value

This paper provides a timely discussion of this important topic in ways that have immediate practitioner application as well as suggesting additional research, dialogue, and thought.
Why do we ignore the best solution for improving unequal income distribution?
Authors: Nissim Ben‐David
Published: June 2007

Purpose

This paper aims to propose a tax reform that would reduce income taxes and other indirect taxes while at the same time increasing inheritance and estate taxes. Such a reform is economically very efficient and would certainly equalize income distribution.

Design/methodology/approach

A wide review of the death and inheritance taxes in the USA and Europe is presented.

Findings

Government's revenue from inheritance and gifts is lower than 1 percent of GDP. This is due mainly to a combination of considerable tax‐free allowances for the closest relatives and high thresholds where the top rates apply. No empirical examination of the effect of inheritance tax on economic growth or economic efficiency could be found.

Practical implications

Because inheritance taxes are economically efficient, they improve the immoral unequal income distribution drastically. Therefore, it should be concluded that inheritance tax must be implemented.

Originality/value

This paper discusses the various economic aspects of the proposed tax reform.
On the hospital as commons
Authors: O’Boyle Edward J. , O’Boyle Meade P.
Published: June 2007

Draws parallels between the contemporary community hospital and the
traditional agricultural commons. Identifies four principal attributes
of common field agriculture and matches them to contemporary
arrangements in the management of the facilities of the community
hospital. Points to several notable parallels between the modern
workplace and the contemporary, natural resource commons. Hypothesizes
that, as the post‐medieval sea change of social values transformed
agriculture – most dramatically by the enclosure of the commons
– so a sea change in values today is changing health care,
inviting the recent wave of mergers and acquisitions reminiscent of the
enclosing of the commons.
Reason in economics versus ethics
Authors: Machan Tibor R.
Published: June 2007

Examines how the different concepts of rationality have been used
(and confused) by economists who have followed modern philosophers′
understanding of human reason. Offers a philosophical discussion as a
means to understanding rationality and its incumbent problems of
interpretation.
Apec’s evolving role as a regional economic agreement
Authors: Shooshtari Nader H. , Fleming Maureen J. , Radighieri Jeffrey P. , Nitzsche Carl‐Christian
Published: June 2007

Outlines the development of the Asia Pacific Economic Co‐operation Forum (APEC), which began as a deliberately informal discussion group in 1989, and traces the evolution of its membership and organizational structure. Summarizes the research and planning work undertaken to date, pointing out that decisions are consensus‐based and not binding on members. Lists the issues identified as crucial to the Asian economic crisis by the 1998 APEC meeting and discusses its role in Asia and in the global economy. Admits that significant, tangible results have been few so far and considers the reasons why; but believes it has the potential to “establish itself as a viable force in dealing with the economic problems of its members”.
Emerging trading blocs and their impact on the strategic evolution of multinationals
Authors: Pearce Robert , Tavares Ana Teresa
Published: June 2007

Identifies the similarities and differences between the concepts of regionalism, multilateralism, globalization and localization; and their effects on multinational enterprises (MNEs). Suggests that the responses of MNEs to the emergence of trade blocs are more complex than generally supposed and uses White and Paynter’s (1984) scope typology to analyse the various roles of subsidiaries in MNE strategy. Discusses three types of subsidiary (truncated miniature replica, rationalized product and world/regional product mandate), their strategic application in different economic situations and the effect on host countries.
An empirical study of Asian financial crisis by debt service capacity comparison
Authors: Liu Weiping
Published: June 2007

Traces China’s foreign debt policy from 1978 to the present and compares its short and long term debt structure with Indonesia, Korea, Malaysia, the Phillippines and Thailand (i.e. five countries suffering from the Asian economic crisis). Points out that in the 1980s, when all six had high growth rates, China had a severe financial crisis while the others did not: a situation reversed in the 1990s. Compares four debt service capacity indicators for the six, using data from 1983‐1990 and 1991‐1997 to explore the factors causing financial crisis and shows that the ratio of short‐term to total debt is the most important indicator. Discusses the implications for the policies of developing countries and warns that “the hot‐bed for...financial crises still exists”.
Auditing framework in the People’s Republic of China and the international auditing guidelines: some comparisons
Authors: Chong Gin
Published: June 2007

Outlines the history of auditing in China and the auditing standards and guidelines issued in 1997 to improve consistency in the audit of government departments and state‐run enterprises under the responsibility of the National Audit Office (NAO). Explains that they focus on auditing processes rather than more subjective areas but are used by the NAO’s audit bureaux and by private accounting firms, including those with international connections. Compares them with international auditing guidelines, which cover subjective issues but are aimed at commercial organizations. Recognizes some concern in China over the money spent on the NAO and calls for public education on the nature and purpose of audit, for parameters to be set to narrow the scope of auditors subjective judgements and for harmonization with international standards.
Changes in corporate management: do they have an impact on share prices and company earnings?
Authors: Dahyaa J. , Lonie A.A. , Power D.M.
Published: June 2007

Reviews previous research on share price response to annoucements of changes in top management and the accounting policies/reported earnings around such changes. Uses 1989‐1992 UK data for a sample of 420 announcements of changes in top management, divided into routine departures, non‐routine departures and appointments, to analyse share price reaction and accounting performance. Finds insignificant price reactions but identifies consistent patterns in operating profit in the years before and after the change, according to the type of change involved. Considers consistency with other research, the underlying reasons for the findings and the limitations of the study. Promises further research to explore changes in industry‐adjusted gearing, liquidity and activity ratios when senior executives come and go.
New Zealand takeover evidence: firm characteristics and payment method
Authors: Mackenzie Rebecca , Kelleher Ben , Vos Ed
Published: June 2007

Refers to previous research on the reasons for takeovers, the characteristics of bidders/targets and methods of payment. Uses 1987‐1998 New Zealand data on a sample of 28 successful bidder/target pairs to analyse their growth/value relationships and methods of payment. Shows that target firms have significantly higher book‐to‐market ratios and lower price‐earnings and price to cash flow ratios than bidders, who appeared to overpay for targets’ shares. Finds bidders with the highest growth and market value tend to use shares or mixed payments while those with lower growth use cash. Describes some less conclusive results and considers consistency with other research and theories.
IPO performance in business to business “B2B” e‐commerce firms: effects of strategy and industry
Authors: Galbraith Craig S. , Merrill Gregory B.
Published: June 2007

Outlines previous research on the pricing of initial public offerings (IPOs), the particular characteristics of e‐commerce firms and the ways in which internet operations differ from traditional business contexts. Uses data from a sample of 28 US business‐to‐business, internet‐based e‐commerce firms to explore the links between industry‐specific and firm‐specific variables, IPO price and subsequent share price performance. Shows generally very high initial returns (115.2 per cent for the run‐up on the first day’s trading!) but negative long‐term returns; and the pricing is significantly positively affected by firm size, commercial strategies and management experience. Finds firms with the highest first day run‐ups were not necessarily the ones with long term underperformance and concludes that investors do actually use information on firm strategy.
Serial correlation, non‐stationarity and dynamic performance of business failures prediction
Authors: Kahya Emel , Ouandlous Arav S. , Theodossiou Panayiotis
Published: June 2007

Outlines previous research on business failure prediction models and investigates the impact of serial correlation and non‐stationarity in financial variables on models based on linear discriminant analysis, logit and cumulative sums using 1974‐1991 data from a sample of failed and non‐failed US firms, plus a similar 1992 sample. Presents and discusses the time series behaviour of the explanatory variables, the estimation of the three types of models and their error rates over time. Concludes that models based on variables with strong positive serial correlation deteriorate over time in their forecasting power; and calls for research to develop stationary models.
The euro and capital market integration: are we there yet?
Authors: Holder Mark , Sinha Amit K. , Severiens Jacobus T.
Published: June 2007

Assesses the effect of the introduction of the euro on capital markets, noting “explosive growth” in the corporate bond market and a rising demand for junk bonds. Believes that equities are funamentally strong, although foreign investors have suffered from falling euro values, and sees some signs that investors within the eurozone are diversifying away from their home markets. Gives statistics on the growth in derivatives trading, splitting it by types of contract; and considers why the consolidation of stock and futures exchanges has been slower than expected. Discusses the implications of capital m arket unification for investment allocation and expects an increasing emphasis on sector analysis as national stock indices coverage; but points out that country factors, e.g. fiscal reforms, still remain.
Depositary receipts from the East Asian region
Authors: Samant Ajay , Tourani Rad Alireza , Yi Wang Chun
Published: June 2007

Notes rapid growth in the number of depositary receipt (DR) listings on US exchanges and presents a study of those from East Asia. Explains how they allow US investors to trade in the equity or debt of non‐US companies through US institutions and reviews the relevant literature. Classifies 605 East Asian DRs at March 2000 by country, year of issue, sponsorship status, exchange, depositary bank and industry; and discusses reasons for the differences found. Tests the relationship between exchange rates and the issuance of DRs and presents the results, which show that firms may be more likely to issue DRs when their home currency is strong relative to the US dollar, i.e. when they can obtain the best listing price in US markets.
A review of the literature on the market valuation of multinational firms
Authors: Saudagaran Shahrokh M.
Published: June 2007

Summarizes three theories on the value of multinational companies: internalization, imperfect capital markets and managerial objectives (agency costs); and reviews a comprehensive selection of previous studies of the effects of multinationality and international diversification on firm value. Believes that globalization makes this an important area and suggests some avenues for further research.
Creditor strategy in individual insolvency
Authors: Pond Keith
Published: June 2007

Explains the option of individual voluntary arrangements (IVAs) when formal insolvency proceedings are taken against a UK individual, noting their rapid growth since they were introduced by the Insolvency Act 1986. Applies games theory (the prisoner’s dilemma) to previously published research data (Pond 1988) on the choices made by debtors and creditors for IVAs in order to analyse and discuss their srrategies. Shows that creditors can do better by assessing the risk of IVA failure, using it to discount the projected dividend and comparing the result with the returns from bankruptcy. Considers the implications for policy makers and others involved.
China’s financial system: two decades of gradual reforms
Authors: Neveda DaCosta Maria Manuela , Ping Ngoh Foo Jennifer
Published: June 2007

Describes the efforts made since 1979 by China to reform its financial system to support its emerging market economy; and the associated problems. Cites research evidence that the reforms have been inadequate and analyses 1986‐2000 national statistics to calculate three macro‐indicators of financial crisis, three measures of government permeability and some other ratios for the Chinese financial system. Identifies many weaknesses, concludes that it remains vulnerable to crisis and points out the potential dangers inherent in plans to allow foreign banks to engage in local currency businesses within the next five years.
The global economy and Japanese bank performance
Authors: Weber William L. , Devaney Michael
Published: June 2007

Outlines the characteristics of Japanese keiretsu (vertically integrated firms interlinked through industrial groups) and reviews the history of financial keiretsu and associated research. Compares the performance of Japanese and US banks 1989‐2000; and examines Japanese bank profit inefficiency by developing a mathematical model and applying it to 1992‐1999 bank data. Shows a “zig‐zag” pattern of profitability change over the period and concludes that the Japanese banking industry is “barely holding its own in profitability”. Points out the particular importance of this to the real economy in Japan and briefly considers the implications for government policy.
Real options: valuing flexibility in strategic mergers and acquisitions as an exchange ratio swap
Authors: Herath Hemantha S.B. , Jahera John S.
Published: June 2007

In recent years, practitioners and academics have argued that traditional discounted cash flow (DCF) valuation models do not adequately capture the value of managerial flexibility to delay, grow, scale down or abandon projects. The insight is that a business investment opportunity can be conceptually compared to a financial option. The purpose of this paper is to develop a theoretical model based on option pricing theory to value managerial flexibility arising in stock for stock exchanges. The paper shows how a mergers and acquisition (M&A) deal may be optimally structured as a real options swap by including managerial flexibility of both the acquiring and target firms when stock prices are volatile. Using a recent acquisition case example from US banking industry the paper illustrates how the proposed exchange ratio swap optimize deal value and avoids earnings per share (EPS) dilution to both parties. Appropriate valuation of managerial flexibility is important given the historical premiums paid in takeovers. While the fact that such premiums exist lends some credibility to the idea that at least implicitly managerial flexibility is valued, the real options approach allows for more explicit valuation of such flexibility.
Performance evaluation: a case study of the Greek balanced mutual funds
Authors: Artikis George P.
Published: June 2007

The present article aims to evaluate the performance of ten domestic balanced mutual funds operating in the Greek financial market over the period 1/1/1995‐31/12/1998. In doing so, the sample mutual funds were ranked on the basis of their return, total risk, coefficient of variation, systematic risk, and the techniques of Treynor, Sharpe and Jensen. The ten mutual funds achieved lower return than the General Index of the Athens Stock Exchange (ASE). However, the mutual funds achieved satisfactory return in relation to the total and systematic risk undertaken. The sample mutual funds followed defensive investment policy that was in line with their objectives. The General Index of the ASE appeared to be a close approximation of the market portfolio. To some extent the ranking of the mutual funds varied among the techniques of Treynor, Sharpe and Jensen, although certain mutual funds were ranked in the same order regardless of the technique used. According to Jensen, seven mutual funds had superior performance, while the remaining three demonstrated poor performance.
The value premium: rational, irrational or random
Authors: Black Angela J. , Fraser Patricia
Published: June 2007

Using data from the stock markets of Japan, the UK and the US, this paper examines the
time series properties of a price index derived from a zero net investment strategy of buying
value stocks and short selling growth stocks. We use the results of this analysis to
consider implications for the validity of competing hypotheses on the source of the value
premium. Overall, the results from this study indicate that the US value premium displays
different characteristics to the value premiums for the UK and Japan. This has farreaching
implications for financial modelling and for the success, or otherwise, of investment
strategies based on the existence of a value premium.
Process or behaviour: which is the risk and which is to be managed?
Authors: Navare Jyoti
Published: June 2007

Based on the belief that it is behaviour which constitutes risk rather than procedures, the paper focuses on the awareness of behavioural aspects in risk management techniques and the consequences that arise out of this awareness. It questions the traditional thinking that risk management is predominantly a set of procedures in the control of risk. The paper also considers the part played by public policy in managing risk and changing behaviour. The paper concludes that it is behaviour, and not the set of procedures, which is the risky factor; therefore in risk management there is need to focus on developing human behaviour that is capable of being flexible in an event.
Can the private finance initiative be used in emerging economies? – lessons from the UK’s successes and failures
Authors: Handley‐Schachler Morrison , Gao Simon S.
Published: June 2007

The Private Finance Initiative (PFI) introduced in the UK in 1992 has provided the framework for the completion of a large number of capital projects managed by public sector bodies. The objectives of the PFI included the promotion of greater efficiency and cost control in the management of large‐scale projects, the transfer of risks to the sector or organisation best able to manage them and the use of management skills available in different sectors of the economy to improve the effectiveness of publicly funded projects. Success and failure cases of the PFI discussed in this paper give some implications to policy‐makers in emerging economies in various areas including risk management, cost of capital measurement and transfer of risks. Overall, there is a need for a greater focus on long term budgets in making decisions about PFI and other methods of public service provision. The question of long term planning is likely to be more complicated in emerging economies with rapid growth rates. For many emerging economies, PFI is a new premise with fundamental differences from conventional public finance, not only in principles, but also in the contract process, risk consideration and decision making.
Menger’s theory of monopoly price in the years of high theory: the contribution of Vernon A. Mund
Authors: Salerno Joseph T.
Published: June 2007

The theory of monopoly price was originally formulated by Carl Menger at the inception of the marginalist revolution in 1871 and represented the dominant theoretical approach to monopoly until the 1930s. Despite its impeccable doctrinal pedigree and lengthy dominance, the theory abruptly disappeared from the mainstream neoclassical literature after the Monopolistic Competition Revolution, to be revived and reformulated after World War II by Ludwig von Mises. The present paper describes the theory as it was offered in its most sophisticated pre‐war form by American economist Vernon A. Mund, who published an unjustifiably neglected volume on monopoly theory that appeared in the same year as the classic works by Joan Robinson and Edward Chamberlain. This paper then attempts to draw out the critical implications of Mund’s formulation of the theory for the current neoclassical orthodoxy in monopoly and competition theory, including the elasticity of demand curves facing individual producers under competition, the time perspectives that are most relevant in analyzing the pricing process, the proper role of long‐run equilibrium in this analysis, and the misapplication of the marginal revenue and marginal cost concepts. Finally, the paper suggests a number of reasons why the theory was swept aside in the aftermath of the Chamberlain/Robinson Revolution with almost no resistance from its most prominent exponents.
A Tale of Three Stock Markets: Timing Between Hong Kong, Shanghai and Shenzhen
Authors: Tourani‐Rad Alireza , YI Ye
Published: June 2007

This paper looks at one relatively less‐visited issue in market timing: switching investments on common stocks between different stock markets, namely, “intermarket timing”. By employing the stock price data for the period of 1992‐2002 from a developed market, Hong Kong, and two emerging markets, Shanghai and Shenzhen, this paper examines potential gains and the required predictive accuracy for intermarket timing between Hong Kong and Shanghai, and between Hong Kong and Shenzhen from Hong Kong investors’ perspective. Potential gains could be obtained from such timing strategy, and the non‐high minimum forecasting ability required for successful timing is fairly attainable for Hong Kong investors, even after taking into account the assumed transaction costs.
Stability of technology stock prices: evidence of rational expectations or irrational sentiment?
Authors: Wilkens Kathryn , Thomas Nordia D. , Fofana M.S.
Published: June 2007

We examine the stability of market prices for 35 technology and 35 industrial stocks for the period December 31, 1993 to October 31, 2002. A phase portrait plot of the detrended log prices and de‐meaned returns of the two sectors shows a chaotic pattern in the stock prices indicating the presence of nonlinearity. However, when we compute the Lyapunov exponents, negative values are obtained. This shows that the price fluctuations for the 70 stocks result primarily from diffusion processes rather than from nonlinear dynamics. We evaluate forecast errors from a naïve model, a neural network, and ARMA models and find that the forecast errors are correlated with average changes in closed‐end fund discounts and other sentiment indexes. These results support an investor sentiment explanation for the closed‐end fund puzzle and behavioral theories of investor overreaction.
Alternative financial rationalities in managing corporate failure
Authors: al Janahi Ahmed , Weir David
Published: June 2007

Most studies of crisis management and business failure are based on research in western economic situations and assume western institutional patterns and attitudes. These assume that certain fundamental elements of financial rationality guide the intervention of banks and financial institutions in situations of incipient business failure. This study is based on an empirical analysis of companies in the GCC region of companies which are clients of banks which operate within the frameworks of the Islamic Banking System in the Arab Middle East. A “sharp‐bending” orientation rather than a “business failure” model is used and conclusions are reached about the role of the banks and other financial institutions and their methods of managing difficult client situations. Some typical situations relating to problem loans, loan officers’ responses and behaviour and out comes are reviewed. The role of the bank in triggering early problem‐recognition is described and the response of the bank, subsequent actions and the sequence of recovery are described. Procedures and actions which would be regarded as “irrational” in a western cultural context are interpretable as “rational” within different cultural frameworks. We argue that there is no one universally‐accepted frame work of business rationality, and that “financial rationalities” are the product of deeply‐embedded cultural frames of reference.
Catastrophe theory and technical analysis applied to a Cal Tech experiment on irrational exuberance
Authors: Pruden Henry O.
Published: June 2007

A Catastrophe Theory Model modified for the explanation of the evolution/revolution of behavior in the securities market can be classified in the realm of behavioral finance. An early model of the Cusp Catastrophe Model modified to explain speculative crashes appeared in Zeeman (1976, 1977). Later, Pruden expanded upon Zeeman’s use of the Cusp Model version of Catastrophe Theory to allow for “buying stampedes” as well as “selling panics”. Pruden also established connections between the Cusp Catastrophe Model and technical market analysis. Whereas the Catastrophe Theory Model, like other models from the behavioral sciences, provides a positive scientific theory as to the “why” of behavior in the stock market, technical market analysis furnishes a nominal theory of rules and principles about “how” a trader or investor may profit from the behavior observed in the stock market. Hence, the presupposition is that behavioral science models that explain the stock market behavior provide solid scientific foundations upon which to base the principles and practices of technical market analysis.
Forward curve dynamics in the Nordic electricity market
Authors: Koekebakker Steen , Ollmar Fridthjof
Published: June 2007

The forward curve dynamics in the Nordic electricity market is examined. Six years of price data on futures and forward contracts traded in the Nordic electricity market are analysed. For the forward price function of electricity, we specify a multi‐factor term structure models in a Heath‐Jarrow‐Morton framework. Principal component analysis is used to reveal the volatility structure in the market. A two‐factor model explains 75 per cent of the price variation in our data, compared to approximately 95 per cent in most other markets. Further investigations show that correlation between short‐ and long‐term forward prices is lower than in other markets. We briefly discuss possible reasons why these special properties occur, and some consequences for hedging exposures in this market.
Enhancing Risk‐Controlled Returns on Excess Japanese Yen
Authors: Vander Linden David , Gramlich Jeffrey D.
Published: June 2007

This paper examines the zero‐cost risk reversal as a tool for increasing returns to excess yen while limiting risk. With domestic interest rates near zero, firms holding Japanese yen face little opportunity to deposit cash for meaningful gain unless excess funds are invested in an other currency. The conversion strategy is profitable as long as the value of the yen appreciates less than the interest rate differential between the currencies, taking advantage of an apparent empirical regularity frequently referred to as ‘forward exchange bias.’ A problem arises, however, because dollar‐yen exchange rate fluctuation adds variability to returns stated in yen. This increased risk counters prudent cash management principles such as stability of returns and liquidity. We consider the possi bility that effective use of a zero‐cost currency options collar can substantially limit exchange‐rate risk and improve returns to yen holders. Data from July 1997 through June 2002 show that a one‐year strategy of reinvesting collared monthly Eurodollar returns produced a median annual yen return of 1.76 per cent, more than 8 times the median 0.21 per cent Euroyen return; risk also increases but approximately 98 per cent of returns resulting from this strategy fell between ‐6.05 per cent and +12.58 per cent.
Market Microstructure Study on Seven US Stock Exchanges: Panel vs. VAR Methodology
Authors: Krishnamurti Chandrasekhar , Sevic Aleksandar , Sevic Zeljko
Published: June 2007

This article questions the validity of regression models when high correlations exist between independent variables and presents the application of VAR as an alternative technique through the comparison of two groups of selected stocks that represent components of Dow Jones and S&P 500 indices, respectively. The results indicate that panel regressions face serious specification problems, while the impulse response function underlines that the shock to the volume innovation has a mostly positive impact on the volatility in both S&P and Dow Jones sample, but the tendency cannot be easily accounted for. The positive impact of volatility shocks on the inter market depth is rather unexpected, but it may be associated with an increase in volume that does not enormously enhance the spread up to the point where it will be too costly for market‐makers to trade, and accordingly, quickly narrows the spread to absorb new liquidity influx in the market. In the Granger causality tests Dow Jones stocks with comparatively larger average volume depth values and price levels provide slightly stronger relations between analyzed variables compared to the stocks included in the S&P sample.