Finance and Financial Management

The impact of stock market index membership on REIT stock returns is unclear. Returns may become more like those of other indexed stocks and less like those of their underlying properties. Taking advantage of the inclusion of REITs in major S&P indexes starting in 2001, we find that shared index membership significantly increases the correlation between REIT returns. However, index membership also enhances the link between REIT returns and the underlying real estate, consistent with improved pricing efficiency. REIT investors appear to be able to enjoy improved visibility associated with index membership and increased exposure to underlying real estate markets.

The importance of an actor's network to his/her private benefits is well explored. Less well understood are the positive externalities of an actor's social capital-that is, whether it spills over and improves the outcomes of those to whom he or she is connected, creating broader, not just private, benefits. This study examines how investment bankers add value to one another in the course of everyday work. Our concern is with a banker's second-order social capital. The main question is whether being connected to a broker matters to the ability of a focal actor to add value to those around him/her. We argue and find that the importance of connecting to a broker is contingent on the broker's seniority relative to the focal actor. Networks of contacts who are of higher rank and/or the focal actor's leader positively contribute to the ability of the focal actor to add value. Second-order social capital does matter, when contacts are senior brokers.

Studies on commonality in returns, order flows and liquidity find that the first principal component is closely aligned with the market factor. With the increasing presence of high-frequency trading, commonality in returns, order flows, and liquidity can potentially arise from the commonality in the interpretation of real-time signals. In this paper, we go beyond the first factor and show that the other dominant principal components consistently reflects investors' herding behavior, demonstrating the multi-dimensional aspect of commonality. Instead of relating the asset returns to order flows, we take both as endogenous, and provide empirical evidence showing that returns commonality is driven by investors' attention, while order flows commonality is driven by investors' sentiment. We also present a comprehensive longitudinal study of commonality and co-movement over a period in excess of two decades under a unifying market microstructure framework to demonstrate the persistence of commonality over time. Our results not only extend the knowledge about cross-sectional asset behaviors, but can also be used to develop systematic trading strategies.

Since the mid-1980s, many authors have investigated the influence of information technology (IT) on productivity. Until recently there has been no clear evidence that productivity increases as a result of IT spending. This productivity paradox is partly due to the difficulty in correctly identifying outputs, particularly in a service sector such as the trucking industry. Products are often differentiated by quality attributes of the service provided, rather than merely the physical content of the good delivered by motor carriers. A carrier's primary marketing objective, e.g. on-time peJformanee vs. lowest-rate carrier, is precisely what differentiates a trucking firm's service. This paper uses cross-sectional data to show that the use of increasingly sophisticated IT by trucking frms varies depending upon marketing objectives. Our empirical results imply that, in order to measure the impact of IT on productivity, it is crucial to account for how the firm differentiates its product. We conclude that the productivity paradox can be alleviated if measures of output incorporate firms' marketing objectives°

This article explores the relationship between corporate financial performance (CFP) and commitment to ESG (environmental, social and governance) practices, using a sample of companies listed on the S&P 500 and TSX 60 indices. By employing a linear regression model, the study examines how financial indicators such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), return on assets (ROA), Assets and Debt influence ESG scores. The results show that financial indicators such as EBITDA, ROA and Assets are positively associated with increased ability to commit resources to ESG practices, except in some cases like when costs associated with ESG initiatives can reduce the competitiveness and profitability of companies in the short term, where ROA is negatively correlated with the adoption of ESG criteria. Also, with regard to the size of companies, thanks to their greater resources, larger companies are more inclined to adopt ESG criteria. These findings enhance the understanding of financial conditions that enable or constrain ESG adoption and provide managerial insights for strategic resource allocation in the pursuit of sustainability goals.

The recent credit crisis has raised a number of interesting questions regarding the role of the Federal Reserve Bank and the effectiveness of its expected and unexpected interventions in financial markets, especially during the crisis, given its mandate. This paper reviews and evaluates the impact of expected and unexpected changes in the federal funds rate target on credit risk premia. The paper's main innovation is the use of an ACH‐VAR (autoregressive conditional hazard VAR) model to generate the Fed's expected and unexpected monetary policy shocks which are then used to determine the effects of a Federal Reserve policy change on counterparty credit risk and more importantly short‐term firm debt financing. The findings answer a longstanding question sought by researchers on the effect of policy makers' announcements on firm debt financing. The results clearly show that the Federal Reserve influences short‐term debt financing through the credit channel for both expansi...

The Federal Reserve's AMLF program was designed to provide liquidity to money market funds (MMFs). Between September 2008 and May 2009, the program made $217 billion in non-recourse loans to depository institutions and bank holding companies to purchase assetbacked commercial paper from MMFs. JP Morgan and State Street dominated the program, accounting for over 90% of all loans made. Our analysis suggests that JP Morgan exhibited more self-dealing behavior than State Street. We find that JP Morgan and State Street earned economically and statistically significant cumulative returns of 2.28% and 2.49% (respectively) over the first seven days of the program after controlling for market returns and heteroscedasticity.

This study investigates how trade openness affects food security in South Africa from 2000 to 2021. Using a Vector Error Correction Model (VECM), the study analyses short-run and long-run impacts of trade policies on national food security, particularly within the context of the African Continental Free Trade Area (AfCFTA). Findings indicate that trade openness improves food security in the short-run, largely due to increased agricultural exports. However, the long-run effects are more nuanced, influenced by factors such as exchange rates, inflation, and agricultural investment. The study highlights the need for policies that support both trade expansion and economic stability, recommending an export-led growth approach to enhance food security.

Summary

The Positionality and Reflexivity Framework offers a structured approach for researchers to acknowledge and critically examine their own identities, experiences, and values in relation to their studies. It emphasizes the dual functions of positionality and reflexivity as interconnected practices that ensure transparency, rigor, and credibility in qualitative and leadership research.

Positionality

Positionality is the researcher’s formal self-declaration of “Who am I in relation to this study?” It situates the researcher’s demographic background (e.g., gender, race, culture, socioeconomic status), experiences (developmental, social, educational, professional), and beliefs or attitudes toward the topic, population, and participants. This statement, typically presented in the introduction, identifies which aspects of the researcher’s identity are relevant to the study’s purpose.

Reflexivity

Reflexivity asks, “How does who I am influence what I do as a researcher?” It operationalizes positionality by examining how the researcher’s identities and experiences shape the design, sampling, data collection, analysis, and conclusions. Reflexivity is ongoing, recorded through journals, memos, decision logs, and audit trails, ensuring that biases are anticipated, tracked, and addressed. The framework provides a Reflexivity Grid to map how specific status dimensions may influence methodology.

Trustworthiness and Credibility

The framework translates positionality and reflexivity into concrete methodological practices that enhance credibility, transferability, dependability, and confirmability. These practices include:

Reflexive positioning memos and journals

Triangulation (data, method, investigator, and theory)

Member checking and interpretive feedback

Negative case analysis

Peer debriefing and external auditing

Thick description of context and process

Explicit audit trails and decision logs

Application Examples

The framework illustrates its use with diverse case examples:

A White female doctoral researcher studying urban women principals.

A Latina faculty member examining supports for Latinx students in higher education.

A Black female researcher exploring culturally responsive pedagogy.

A Black male faculty member investigating leadership pathways of Black male administrators.

A White male researcher studying rural school leadership.

Hispanic male and female researchers examining bilingual education policy and first-generation college students.

Each example demonstrates how positionality and reflexivity practices guard against bias, enhance validity, and model reflective leadership.

Contribution

By integrating self-awareness with methodological rigor, this framework provides a reflexive playbook that operationalizes qualitative trustworthiness. It positions positionality as foundational and reflexivity as applied and ongoing, showing how visible reflexive practices strengthen credibility and model reflective leadership in both K–12 and higher education contexts.

Restaurant operators who seek to increase table turns during peak periods may want to speed up the meal's pace. However, excessive speed may make customers feel rushed. A survey of 218 respondents found that too fast a pace does affect customer satisfaction with the meal experience, with fine-dining customers more sensitive to pacing issues than customers in casual or upscale casual restaurants. Regardless of restaurant type, too fast a pace during the meal itself diminishes customer satisfaction, but speed during check settlement is often appreciated. The effects on customer satisfaction of the pace of welcome, seating, and taking drink orders depend partly on the type of restaurant and on the meal type. Guests at fine-dining restaurants do not want these preprocess events to be rushed. Additionally, a faster pace during these preprocess events at dinner diminished satisfaction ratings as compared to lunch.

This study examines the impact of Small and Medium Enterprises (SME) financing on poverty reduction in the Abuja Municipal Area Council (AMAC), Nigeria. SMEs play a vital role in economic growth, job creation, and poverty alleviation; however, access to finance remains a significant barrier to their growth and development. The research aims to assess how access to finance influences SME growth, employment generation, and household income, and to identify the challenges SMEs face in securing financial resources. A descriptive survey research design was employed, and data was collected from 370 SME owners, representatives of financial institutions, and relevant government agencies within AMAC. The study found that access to SME financing is positively correlated with business growth, job creation, and improved household incomes, which in turn contribute to poverty reduction. However, SMEs face considerable challenges, including high-interest rates, lack of collateral, and bureaucratic bottlenecks, which limit their ability to access financing. The study also found that while government initiatives such as microfinance programs and the Central Bank of Nigeria’s Anchor Borrowers’ Programme have made some strides in supporting SME financing, their impact remains limited due to administrative inefficiencies and low outreach. The research concludes that improving access to finance, enhancing financial literacy, and streamlining financial support mechanisms are essential to empowering SMEs and maximizing their contribution to poverty alleviation. The study recommends targeted interventions, policy reforms, and the strengthening of microfinance institutions to improve the financial ecosystem for SMEs in Nigeria, ensuring that these enterprises can fully contribute to sustainable economic development and poverty reduction

The study investigates the relationship between six board compositions and stock returns. The results indicate a significant association between various board compositions and stock returns. Specifically, board size and executive directors have a negative impact, whereas independent directors enhance stock returns. Busy directors positively impact the abnormal stock returns for the companies in the non-financial industry, which implies that busy directors who serve on more boards tend to be well connected. More importantly, the results indicate a significant positive relationship between board tenure and stock returns. Board service time is perceived as the board quality of knowledge and experience from the investors' point of view.

Digital Banking is an evolution of online banking, where the banks attempt to further enhance customer experience by integrating digital technologies such as mobile technology, social media and analytics. Traditional banks have the highest barriers to entry into the digital banking market due to the presence of legacy core banking systems. These legacy systems while still high performing and reliable, are inflexible to change and are not easily integrated to the modern application systems needed for delivering digital banking services across multiple online banking channels. One solution that is widely adopted in the industry to overcome this obstacle is the implementation of a Service-Oriented Architecture (SOA). In this paper, we investigate the relationship between three factors, namely a bank’s technology infrastructure, IT governance processes, SOA maturity, and their impact on time-tomarket (T2M) of digital banking products and services. Our research study is achieved through ...

As a result of massive financial statement frauds at Enron, WorldCom, Tyco, Sunbeam, Waste Management, Xerox and others, the US Congress enacted the Sarbanes Oxley Act of 2002 (SOX 2002). This Act sets up the Public Company Accounting Oversight Board (PCAOB) which regulates the auditing profession in the US. The PCAOB issues auditing standards, inspects audit quality and also has enforcement powers. Following the US lead, nations, such as, Australia, Canada, and the United Kingdom have set up national statutory bodies to monitor audit quality. This paper summarises the work of these national bodies and synthesises recent reports of these organisations concerning audit quality. Important lessons gleaned from this synthesis can be useful for those charged with audit regulation in India and elsewhere. For example, auditor regulation in India is in its nascent stage. In August 2013, the Companies Act of 2013 established the National Financial Reporting Authority (NFRA). NFRA is tasked with the monitoring of audits of public company financial statements in India, among other mandates. This paper discusses the draft rules for auditor oversight developed by NFRA and provides some suggestions as to how countries beginning to develop audit quality inspection procedures can benefit from the prior experiences of others.

ICMS aims to provide global consistency in classifying, defining, analysing and presenting construction costs at a project, regional, state, national or international level. This project is the first of its kind, bringing together numerous organisations from around the world to create shared international standards for presenting construction costs. This first edition of ICMS focuses on capital costs; however, future editions of ICMS may incorporate other matters such as costs in use. Consistent practice in presenting construction costs globally would bring significant benefits to construction cost management. Globalisation of the construction business has increased the need to make meaningful comparative analysis between countries, not least by international organisations such as the World Bank Group, the International Monetary Fund, various regional development banks, non-governmental organisations and the United Nations. The Coalition did not identify any existing standard that was suitable for international adoption. For this reason, the Coalition has come together to create shared standards. At a meeting at the International Monetary Fund in June 2015, Coalition members confirmed they were committed to promoting the implementation of ICMS to encourage world markets to accept and adopt ICMS as the primary standard for presenting construction costs across different nations in a consistent way. An independent Standard Setting Committee (the SSC) was formed. The SSC includes technical experts from 11 countries and a combined expertise covering 47 different markets. The SSC worked virtually and also met three times, once in Brussels and twice in London. A wide range of professional organisations are represented in the Coalition and the SSC. They were generous in providing their national standards, which provided the basis for the early deliberations of the SSC.

Because people choose to move to relatively prosperous regions, economists have traditionally believed that migration mitigates the effects of local shocks. In the first part of this paper, I document that the opposite holds in the data: within-U.S. migration causes a large reduction in the unemployment rate of the receiving city, over several years. To establish the causal effect of inmigration, I construct a plausibly exogenous shock by using the outmigration of other places and predicting its destination based on historical patterns. In the second part of the paper, I document that the increase in the demand for housing explains the boom, through two channels. The construction channel occurs because housing is a durable good: hence there is a surge in the number of new houses and construction jobs. The house price channel occurs because the migrants' housing demand drives up prices, leading to increased borrowing and higher labor demand in non-tradable sectors. Together, thes...

The main objective of this research project was to empirically examine the impact of food price volatility on household nutrition in Sub-Saharan Africa. The study utilized panel data covering the period 1981 to 2019 across selected countries in the region.
Analytical techniques including the Augmented Dickey-Fuller test, Johansen Cointegration, Error Correction Model, and Toda-Yamamoto Causality test were employed. Since all the variables were stationary at first difference I(1), the Johansen Cointegration test was used to investigate the long-run relationship among them.
The results indicated that food price volatility had a significant effect on household nutrition outcomes, with rising food prices worsening dietary diversity and calorie intake. Exchange rate fluctuations and inflation (CPI) were identified as key drivers of food price instability, while income levels moderated household vulnerability. The findings also revealed a unidirectional causality from food price volatility to household nutrition, and from inflation to food prices.
The study recommends that governments in Sub-Saharan Africa adopt stabilization policies such as strategic food reserves, targeted subsidies, and exchange rate management to cushion households against adverse nutritional outcomes. Strengthening regional trade integration is also vital for improving food system resilience.

Three interventions that address the emotional components of handling finances are proposed. Drawn from a stepwise model of financial therapy, the three interventions introduced here have the specific aim of incorporating the emotional attributes of traditional financial behaviors and beliefs. First, the Financial Genogram identifies family of origin issues that may affect financial behaviors; second, the Financial Landscape intervention is used when emotional stress occurs in collecting and examining financial documents; and third, the Financial Mirror broadens clients' perspectives of their financial behaviors. Issues in future research and implementation of the Five Step model are addressed in treating financially distressed clients.

Three interventions that address the emotional components of handling finances are proposed. Drawn from a stepwise model of financial therapy, the three interventions introduced here have the specific aim of incorporating the emotional attributes of traditional financial behaviors and beliefs. First, the Financial Genogram identifies family of origin issues that may affect financial behaviors; second, the Financial Landscape intervention is used when emotional stress occurs in collecting and examining financial documents; and third, the Financial Mirror broadens clients' perspectives of their financial behaviors. Issues in future research and implementation of the Five Step model are addressed in treating financially distressed clients.

The early stage of the recent …nancial crisis was marked by large value losses for bank stocks. This paper identi…es the equity funds most a¤ected by this valuation shock and examines its consequences for the non-…nancial stocks owned by the respective funds. We …nd that (i) ownership links to these "distressed equity funds" lead to large underperformance of the most exposed non-…nancial stocks, and in aggregate this contributes an additional 10% to the overall stock market downturn; (ii) distressed …re sales and the associated price discounts are concentrated among those exposed stocks which perform relatively well; and (iii) stocks with higher fund ownership generally performed much better throughout the crisis.

This research investigates the relationship between capital and risk in property-liability insurers from 1993 to 2007. Three-stage least squares estimation is used to investigate the relationship between capital and two types of risk: underwriting and asset risk. Overall the results suggest that risk and capital are positively related, so that capital increases are associated with increases in investment and underwriting risk. This positive relationship was not consistently significant in 1993, prior to the implementation of risk-based capital (RBC) requirements. Both under-capitalised insurers and marginally adequately capitalised insurers adjusted their capital and risk towards firm targets at a higher speed than wellcapitalised insurers in the post-RBC period. But underwriting and asset risk also increased for less well-capitalised insurers.

The solvency of life insurance companies may be threatened by interest rate risk when the maturities of assets and liabilities are mismatched. The National Association of Insurance Commissioners’ (NAIC) multiple scenario cash-flow test (MSCFT) and the Office of Thrift Supervision (OTS) net portfolio value model (stock) approaches to financial stress tests are illustrated and analyzed with respect to their capacity to estimate the impact of potential changes in interest rates on life insurance company capital and surplus. Each approach is illustrated with the assets and liabilities of three hypothetical life insurance company capital levels (high, average, and below average) and realistic interest rate scenarios spelled out in the NAIC’s standard valuation model law. The supplement to the standard valuation law requires the appointed actuary to serve a dual employee/regulator role in which he/she is required to develop an expert opinion concerning the prospective solvency of his/her ...

This paper utilizes a new data set from AllianceBernstein that, unlike other corporate governance data, has country-level and monthly-updated firm-level governance ratings for 22 emerging markets countries for almost a five year period. With these data we examine the relationship of firm-level and country-level corporate governance on firm valuation, dividend payout, internal firm performance and other issues. We find a number of interesting results that have implications for corporations, investors and policymakers. First, we find there is a positive and significant relation between firm-level and country-level corporate governance ratings and market valuation. Second, we find this relation between governance and market valuation is non-linear. Specifically, top-rated firms and firms in toprated countries have significantly better market valuations than other firms, but there is little significant difference in the market valuation between intermediate rated and low rated firms. Third, we find firmlevel governance impacts market valuation differently depending on the degree of country governance where the firm is located. Indeed, in countries with weak country-level governance, we find that improvements in firm-level governance can actually lead to significantly lower market valuations. Fourth, since we have firm-level corporate governance ratings on a monthly basis, we examine the effects of changes in corporate governance at the firm level over the specific window of time when the corporate governance ratings have changed. This type of test allows us to overcome the issue of whether better governance causes better valuations, or whether firms with better valuations endogenously choose better governance. Using this test we find some evidence that improvements in corporate governance do cause higher valuations, higher returns on equity, and more efficient usage of capital. Fifth, in an examination of what country-level governance issues influence firm-level governance, we find that the governance stance on corporate governance and equity culture and the political, social, and environmental climate of the country are both positively and significantly related to firm-level governance. Although causation is difficult to determine, this result suggests that a country that is concerned with human rights and environmental issues creates a positive example that corporations seem follow in their firm-level governance. Sixth, in an out-sample analysis of the predictive ability of the governance ratings, we find that firms located in countries with high countrylevel governance ratings did in fact predict significantly better future risk-adjusted stock return performance. On the other hand, we find that firm-level corporate governance ratings themselves are weaker predictors of future risk-adjusted stock return performance.

Earnings manipulation has become a big issue in corporate acquisitions, affecting investment decisions and the
value perception of target firms. This article reviews the multiple roles earnings management plays in the strategic
decision-making aspect of mergers and acquisitions (M&A). Running on both empirical and theoretical grounds,
the investigation brings to light the extent to which manipulation influences valuation on acquirers' response to
inflated accounting performance indicators, and the strategic incentives for executives to manipulate earnings
reports pre- and post-acquisition. It reveals that target firms employ accrual and real earnings management to
improve their attractiveness, thereby affecting payment methods, deal premiums, and managerial mechanisms in
negotiation. Furthermore, the acquirers may conceal or deliberately interpret the manipulations, depending on
their investment objectives and governance structure. The study also deals with how leverage, sustainability, and
executive pay interplay with earnings management behavior, complicating acquisition outcomes. In short, the
work calls for increased scrutiny of acquisition practices upon due diligence and tighter corporate governance
mechanisms to counteract the dangers arising from earnings manipulation in acquisition situations. By describing
and exploring these dynamics, this article contributes to a better understanding of value perception, risk
assessment, and strategic behavior in acquisition environments.

Purpose – The purpose of this paper is to report on a survey about the personal financial planning attitudes of MBA students in the USA. Design/methodology/approach – The study surveyed 206 MBA students about their attitudes to personal financial planning. Participants were asked about their level of knowledge, whether they had prepared components of a financial plan, where they might seek assistance in such a process and the criteria for selecting a financial planner. In addition, participants were asked to indicate their level of confidence in a financial plan\u27s capacity to help them meet their long-term needs and the likelihood that they would implement such a plan. Findings – The findings indicate that, while most respondents feel both that financial planning is important and that they are interested in developing a financial plan, very few feel that they have the necessary skills and knowledge to prepare their own plan. In addition, the participants indicated a strong prefer...

We examine the frequency and severity of water loss claims for homeowners insurance across the state of California for the experience years 2000, 2001, and 2002. The spatial distribution patterns of frequencies and severities are mapped and analyzed at the zip code level. The maps reveal the pockets of high frequencies and severities. The information provided in this paper will assist actuaries and policy makers in their quest to set accurate rates for homeowners insurance.

We examine the frequency and severity of water loss claims for homeowners insurance across the state of California for the experience years 2000, 2001, and 2002. The spatial distribution patterns of frequencies and severities are mapped and analyzed at the zip code level. The maps reveal the pockets of high frequencies and severities. The information provided in this paper will assist actuaries and policy makers in their quest to set accurate rates for homeowners insurance.

We conduct a comprehensive out-of-sample assessment of the economic value adding of commodities in multiasset investment strategies that exploit the predictability of asset return moments. We find that predictability makes the inclusion of commodities profitable even when short selling and high leverage are not permitted. For instance, a mean-variance (non-mean-variance) investor with moderate risk aversion and leverage, rebalancing quarterly, would be willing to pay up to 108 (155) basis points per year after transaction cost for adding commodities to her stock, bond, and cash portfolio. Previous research had reached mixed or even opposite conclusions, especially in an out-of-sample context.

This paper studies the effect of currencydevaluation on aggregate output level in South- East Asian countries usingpanel data from Thailand, Malaysia, Indonesia and the Philippines for a periodfrom 1980 to 2010. An empirical modelthat includes monetary, fiscal and exchange rate variables is developed. Two versions of the model, one with realexchange rate and another with nominal exchange rate and foreign-to-domesticprice ratio are estimated. An errorcorrection model is developed and the time series properties of the panel dataare diagnosed before estimating the model.The estimated results suggest that currency devaluations are contractionaryin the short run and the intermediate run and this contractionary effect comesfrom the change in nominal exchange rate and not from the change in foreign-to-domesticprice ratio.

In this paper, we consider the relationship between supply chain network equilibrium and transportation network equilibrium. We demonstrate that a supply chain network equilibrium model introduced earlier can be reformulated as a transportation network equilibrium model with elastic demands through a supernetwork reformulation of the former. This equivalence allows us to transfer the wealth of methodological tools developed for transportation network equilibrium modeling, analysis, and computation to the study of supply chain networks. To illustrate the power of the results, we then apply an algorithm developed for the solution of transportation network equilibrium problems with elastic demands to compute the product shipments and demand market prices in several numerical supply chain network examples taken from the existing literature.

Advances in telecommunication networks, and, in particular, the Internet have transformed the economic landscape for financial decision-making. In this paper, we focus on financial networks with electronic transactions and with different tiers of decision-makers and we develop an integrated framework for the modeling, analysis, and computation of solutions to such problems. Specifically, we consider an economy consisting of three types of decisionmakers: those with sources of funds; intermediary ones, and consumers associated with the financial products at the demand markets. Those with sources of funds can transact with the intermediaries either physically or electronically as well as directly in an electronic manner with the consumers. The intermediaries, in turn, can also transact with the consumers either in a physical or an electronic fashion. We address the behavior of the decision-makers, identify the network structure of the problem, derive the equilibrium conditions, and establish the variational inequality formulation. In addition, we propose a continuous time adjustment process for the study of the disequilibrium dynamics and prove that the set of stationary points of the resulting projected dynamical system coincides with the set of solutions of the variational inequality. We then utilize variational inequality theory to derive qualitative properties of the equilibrium price and financial flow pattern. Finally, we apply an algorithm for the determination of equilibrium prices and financial flows in several examples.

This paper investigates the nature of volatility spillovers between stock returns and a number of exchange rates changes for the G-7 countries for the 1996-2006 period. We divide our sample into a number of sub periods, prior to and after the introduction of the Euro, we use EGARCH modelling which takes into account whether bad news has the same impact on volatility as good news. Our results show that in terms of volatility spillover effects from stock returns to exchange rates returns, there is a large degree of consistency across counties and time periods with significant spillovers found for all countries, in all three periods, with the exception of Italy in the pre-Euro period. The impact of stock market volatility on exchange rates thus does not appear to have been altered significantly by the introduction of the Euro in the sense that the cross exchange rates against the $, Yen, £ and CHF existed prior to the introduction of the Euro as well as after it across nearly all G-7 markets In contrast, our results indicate that in terms of volatility spillovers from exchange rates to stock markets, the results are less consistent both across countries and over time but overall we find much less evidence supporting volatility spillovers from exchange rates to stock markets. There is however some commonality regarding which exchange rates we find significant volatility spillover effects to stock markets for the period after the Euro was introduced. The lack of significant spillovers from exchange rate changes to stock returns found here for some countries across a number of exchange rates is consistent with existing research in this area.

We present a theoretical framework and supporting empirical evidence for the choice of acquisition method in takeovers. In our model, bidders have a preference for speedy execution in order to minimize competition for the target. Due to existing regulations, tender offers provide substantially lower completion times than mergers and, as a result, are the acquisition method of choice. However, a tender offer signals to the target good market opportunities for its shares which raises its reservation price. In equilibrium, bidders trade-off speed and costs: tenders are faster but have higher premiums. We show that deals in more competitive environments and deals with lesser external impediments on execution are more likely to be structured as tender offers. Furthermore, the rivals of the bidding firm exhibit significantly lower announcement returns in tender offers than in mergers.

Purpose The purpose of this paper is to explore the recent financial trends affecting grain and farm supply cooperatives. Design/methodology/approach Review of and descriptive analysis of current cooperative finance topics. Findings In recent years three important trends have become apparent among grain marketing and farm supply cooperatives. These farmer-owned firms have been rapidly investing in infrastructure, reformulating profit distribution and equity strategies, and have pursued consolidation with other cooperatives. Originality/value Grain and farm supply cooperatives are changing at a rapid clip to meet the needs of their evolving and growing farmer-owners. New research is needed to help these cooperatives meet these needs, and this paper identifies new areas of research in cooperative finance.

The ability to manage the time involved in a service process is critical to effective revenue management (RM). At the same time, customer satisfaction is also a key element of time management in services. In this study, we explore the time component of RM in services that sell time implicitly by examining a dining experience. Although service managers can use pace to manage the duration of a service encounter and increase capacity during periods of high demand, manipulating the pace may interfere with customer satisfaction. Prior research has shown that the relationship of perceived pace with customer satisfaction follows an inverted U-shape. If the service pace misses the “sweet spot” that balances pacing with customer satisfaction, the revenue benefits of increasing pace may be short-lived. Using a survey-based approach, we examine the moderating effect of restaurant customers’ perceived control of pace on the relationship between perceived pace and customer satisfaction. We found...

Following the lead of federal regulations, numerous states, counties and cities have enacted laws designed to reduce predatory lending. There is at least anecdotal evidence that predatory or abusive mortgage lending is primarily concentrated in the subprime market. However, the impact of these local predatory lending laws on the subprime mortgage market is unknown. The primary questions we examine are: do these laws affect the supply and flow of subprime mortgage credit and does the experience in North Carolina, the first state to enact a local predatory lending law, apply to other local laws?

ocuments that discuss predatory lending begin with a statement similar to that found in a report by the Department of Housing and Urban Development (HUD) and the Department of the Treasury (HUD and Treasury, 2000, p. 17): "Defining the practices that make a loan predatory, however, is problematic." This difficulty arises because predatory lending depends on the inability of the borrower to understand the loan terms and the obligations associated with them. The amorphous nature of predation has made it very difficult for federal, state, and local authorities to craft laws to stop or at least retard predation without also hindering legitimate lending. However, following the lead of federal regulations, state and local authorities have passed laws that have made it illegal to provide certain types of high-cost loans that have been associated with predation. Implicitly, lawmakers have determined that the benefit of stopping predation outweighs the costs associated with restricting some legitimate high-cost loans. This paper provides a framework for consider-Giang Ho was a senior research analyst and Anthony Pennington-Cross was a senior economist at the Federal Reserve Bank of St. Louis at the time this paper was written.

This paper is concerned with the market rental rate for space offered by commercial property and how that rental rate evolves over time. Rental rates reflect the value of the services provided by the property and can have a significant impact on the ability of its owners to make monthly debt obligations. We investigate commercial property rent dynamics for 34 large metropolitan areas in the U.S. The dynamics are studied from the second quarter of 1990 through the second quarter of 2009 and the results are compared across four property types or uses (office, industrial, flex, and retail). There is substantial heterogeneity in both the long and short run responses to changing demand and supply conditions. In general, the office market is the slowest to adjust back towards equilibrium while industrial and flex markets adjust back to the long run equilibrium very quickly. For industrial and office types, the speed of adjustment is substantially faster within quality segments and is strongest for grade A properties.

This paper examines the choice of borrowers to extract wealth from housing in the highcost (subprime) segment of the mortgage market while refinancing and assesses the prepayment and default performance of these cash-out refinance loans relative to the rate refinance loans. Consistent with survey evidence the propensity to extract equity while refinancing is sensitive to interest rates on other forms of consumer debt. After the loan is originated, our results indicate that cash-out refinances perform differently from noncash-out refinances. For example, cash-outs are less likely to default or prepay, and the termination of cash-outs is more sensitive to changing interest rates and house prices.

Adjustable rate and hybrid loans have been a large and important component of subprime lending in the mortgage market. While maintaining the familiar 30-year term the typical adjustable rate loan in subprime is designed as a hybrid of fixed and adjustable characteristics. In its most prevalent form, the first two years are typically fixed and the remaining 28 years adjustable. Perhaps not surprisingly, using a competing risks proportional hazard framework that also accounts for unobserved heterogeneity, hybrid loans are sensitive to rising interest rates and tend to temporarily terminate at much higher rates when the loan transforms into an adjustable rate. However, these terminations are dominated by prepayments not defaults.

Local authorities in North Carolina, and subsequently in at least 23 other states, have enacted laws intending to reduce predatory and abusive lending. While there is substantial variation in the laws, they typically extend the coverage of the Federal Home Ownership and Equity Protection Act (HOEPA) by including home purchase and open-end mortgage credit, by lowering annual percentage rate (APR) and fees and points triggers, and by prohibiting or restricting the use of balloon payments and prepayment penalties. Empirical results show that the typical local predatory lending law tends to reduce rejections, while having little impact on the flow (application and origination) of credit. However, the strength of the law, measured by the extent of market coverage and the extent of prohibitions, can have strong impacts on both the flow of credit and rejections.

Urban economists have long understood the theoretical importance of transportation infrastructure and accessibility on the location choice of households and firms. We utilize a readily available data set of transaction rents in the Chicago metropolitan area to investigate the determinants of industrial property rents. Among the factors considered are proximity to transportation infrastructure, characteristics of the property, the term structure of lease agreements, and local attributes of the neighborhood.