Business Commons^™

Essays On Behavioral Decision Making, Martin Egozcue

Martin Egozcue

Ph.D. Thesis in Economics, Facultad de Ciencias Sociales, Universidad de la República del Uruguay

10 Razões Para Um Negócio Ter Sucesso, Ivan F. Rodriguez

Ivan F Rodriguez

A experiência e habilidades dos gestores de topo. Mais de metade dos negócios fracassados estão diretamente relacionados à incompetência gerencial.

10 Reasons Business Succeed, Ivan F. Rodriguez

Ivan F Rodriguez

The experience and skills of the top managers. Over half of business failures are directly related to managerial incompetence.

Not All Risk Is Born Equal: The Behavioral Agency Model & Firm Efficacy, Geoffrey P. Martin Dr, Nathan T. Washburn Dr, Marianna Makri Dr

Geoffrey P Martin

We examine the relationship between agent (CEO) risk bearing and the quality of executive risk taking outcomes, by examining the contingency effect of CEO perceived firm efficacy. In doing so, we extend the behavioral agency model (BAM) beyond predictions of risk magnitude to examining how CEO risk taking outcomes differ qualitatively in response to risk bearing. We argue that CEO risk bearing (due to stock options or cash compensation) will positively influence performance outcomes in the presence of higher perceived firm efficacy. However, this positive influence reverses when efficacy is lower. We demonstrate the utility of firm efficacy in exploring …

Earnings Response Coefficients Of Oecd Banks: Tests Extended To Include Bank Risk Factors, Mohamed Ariff, Cheng Fan Fah, Soh Wei Ni

Mohamed Ariff

We investigate two issues: Do share prices of banks in European markets respond to unexpected accounting earnings disclosures? Are share prices as well as unexpected earnings changes correlated with bank-relevant risk factors? Results reveal that bank share prices respond to unexpected earnings changes at the time of accounting reports in the same manner as the shares of the more widely-researched non-bank firms. Apart from finding significant earnings response coefficients in eight countries, we find that credit risk, price risk, exchange rate risk, and solvency risk are significantly correlated with share price changes. Third, three bank risk factors are significantly correlated …

Remic Tax Enforecement As Financial-Market Regulator, Bradley T. Borden, David J. Reiss

Bradley T. Borden

Lawmakers, prosecutors, homeowners, policymakers, investors, news media, scholars and other commentators have examined, litigated, and reported on numerous aspects of the 2008 Financial Crisis and the role that residential mortgage-backed securities (RMBS) played in that crisis. Big banks create RMBS by pooling mortgage notes into trusts and selling interests in those trusts as RMBS. Absent from prior work related to RMBS securitization is the tax treatment of RMBS mortgage-note pools and the critical role tax enforcement should play in ensuring the integrity of mortgage-note securitization.

This Article is the first to examine federal tax aspects of RMBS mortgage-note pools formed …

The Chilean Pension System At 25 Years: The Evolution Of A Revolution, Gregory J. Buchholz, Alberto Coustasse, Patricio Silva, Peter Hilsenrath

Alberto Coustasse, DrPH, MD, MBA, MPH

The 1981 reform of the Chilean pension system was revolutionary at its time. It was the first instance of a mature public Pay-As-You-Go social security system being converted into a mandatory defined contribution system managed by the private sector. This paper contends that a unique confluence of events were responsible for this change. The rise of a dictatorship in Chile, a struggling public retirement system, and a cadre of Chicago oriented economists determined to make Chile a model free market neoliberal economy. This was later followed by the Washington Consensus and the promotion of Chilean reform by the World Bank. …

Assessing Risk, Liability And Asset Management Investments Among U.S. And Foreign Banks: Bank Of America, Wells Fargo, And Wachovia, Valencia Tamir Johnson Dr.

Valencia T Johnson

In recent years, banks have had a positive and negative impact on assessing risk, liability and asset management from other competitors such as Bank of America, Wells Fargo and Wachovia. There have been many recent discussions about the U.S. and International banking management and investments. The Federal Reserve and the U.S. Exchange Commission are finding ways to evaluate the negative and positive behaviors exhibited by other financial institutions, which has an impact on the global economy, and in regards to financial management and investments. This article explains the important of assessing the risk and compliance management in financial banking and …

Goliath Versus Goliath In Hight-Stakes Mbs Litigation, Bradley T. Borden, David J. Reiss

Bradley T. Borden

The loan-origination and mortgage-securitization practices between 2000 and 2007 created the housing and mortgage-backed securities bubble that precipitated the 2008 economic crisis and ensuing recession. The mess that the loan-origination and mortgage-securitization practices caused is now playing out in courts around the world. MBS investors are suing banks, MBS sponsors and underwriters for misrepresenting the quality of loans purportedly held in MBS pools and failing to properly transfer loan documents and mortgages to the pools, as required by the MBS pooling and servicing agreements. State and federal prosecutors have also filed claims against banks, underwriters and sponsors for the roles …

Financial Liberalization, Market Structure And Credit Penetration, Felipe Balmaceda Assoc Prof., Ronald Fischer Full Professor, Felipe Ramirez

Felipe Balmaceda

This paper shows that the effects of financial liberalization on the credit market of a small and capital constrained economy depend on the market structure of domestic banks prior to liberalization. Specifically, under perfect competition in the domestic credit market prior to liberalization, liberalization leads to lower domestic interest rates, in turn leading to increased credit penetration. However, when the initial market structure is one of imperfect competition, liberalization can lead to the exclusion of less wealthy entrepreneurs from the credit market. This provides a rationale for the mixed empirical evidence concerning the effects of liberalization on access to credit …

Selective Intervention And Economic Re-Engineering: Lessons Form Singapore's Parks In Indonesia And India, Caroline Yeoh, Siang Yeung Wong

Caroline Yeoh

No abstract provided.

Restoring Transparency To Automated Authority, Frank Pasquale

Frank A. Pasquale

Leading finance, health care, and internet firms shroud key operations in secrecy. Our markets, research, and life online are increasingly mediated by institutions that suffer serious transparency deficits. When a private entity grows important enough, it should be subject to transparency requirements that reflect its centrality. The increasing intertwining of governmental, business, and academic entities should provide some leverage for public-spirited appropriators and policymakers to insist on more general openness. However well an "invisible hand" coordinates economic activity generally, markets depend on reliable information about the practices of core firms that finance, rank, and rate entities in the rest of …

Accountability In The Church, Professor Ben C Osisioma

Prof Ben Chuka Osisioma

Traditionally, accountability is the obligation to give a reckoning or explanation for one’s actions and responsibilities to a higher authority. However, for the purpose of this paper, we define accountability as the processes through which an organisation makes a commitment to respond to and balance the needs of stakeholders in its decision making processes and activities, and delivers against this commitment. In the church setting accountability involves managing the resources God has entrusted us with, organising for service and mission, and providing programmes to carry out the church’s mandate. The goal is to help people grow in Christ and learn …

Is It Time To Dump Your Vendor Management System?, Rihaz Z. Chughatta

Rihaz Z Chughatta

Most companies today have either implemented, or are exploring, some form of a Vendor Management System (VMS) to consolidate their external suppliers. Companies that sell a VMS point out that this system allows a Customer to get the most cost-effective solution for their needs within a certain category of suppliers; the “when suppliers compete, you win” mentality prevails. Some of the VMS even have performance metrics by which suppliers are measured and then rated in the system; thus making the case that not only does a VMS provide the most cost-effective, but also the best performing and most efficient solution …

Innovation, Proximity, And Knowledge Gatekeepers –Is Proximity A Necessity For Learning And Innovation?, Deogratias Harorimana Dr

Dr Deogratias Harorimana

Organisational desire for innovation and growth can be best achieved when they are in proximity. Geographical or technological proximity represent network structure in which a focal organisation is embedded, which has structural, cognitive and relational dimensions. Proximity influences innovation indirectly by its influence on agents’ ability to exchange and combine knowledge in four related ways: by giving access to exchange partners that provide opportunities for learning, increasing the anticipation of value, increasing the motivation to exchange, and by giving access to resources necessary for committing exchanges.

The Chicken Or The Egg? The Trade-Off Between Bank Fee Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru

Gulasekaran Rajaguru

This study considers the time series relationship between bank fee income and bank net interest margins in Australia, applying panel vector autoregressions to a unique, hand-collected dataset. Increases in bank fee income are being used to supplement decreases in net interest margins. The increase in magnitude of fee income associated with reductions in margin income is smaller than the decrease in net interest margins, resulting in a net wealth transfer favouring users of bank services; although not all users of bank services gained and/or gained equally. The overall increase in fee income is marginally greater that the reduction in margin …

The Chicken Or The Egg? The Trade-Off Between Bank Fee Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru

Barry Williams

This study considers the time series relationship between bank fee income and bank net interest margins in Australia, applying panel vector autoregressions to a unique, hand-collected dataset. Increases in bank fee income are being used to supplement decreases in net interest margins. The increase in magnitude of fee income associated with reductions in margin income is smaller than the decrease in net interest margins, resulting in a net wealth transfer favouring users of bank services; although not all users of bank services gained and/or gained equally. The overall increase in fee income is marginally greater that the reduction in margin …

101 Financial Accounting Practices: Practical Questions And Answers, George E. Ekeha

George E Ekeha

More often that not, our accounting practices at the corporate levels have been very different from what actually goes on in our schools and universities. Many of our graduate students in accounting get into the real world of work and realised that whatever they learnt in the classrooms have not much impact on the practice of accounting in the corporate environment.

This book intends to bring some practical (not totally though, but I am sure it would help others to start thinking about the solutions) questions for prospective accounting graduates to test themselves on the realities of accounting jobs. The …

Assessing The Financial Failure Using Z-Score And Current Ratio: A Case Of Sugar Sector Listed Companies Of Kse, Muhammad Shahzad Ijaz, Ahmed Imran Hunjra, Rauf I. Azam

Ahmed Imran Hunjra (PhD)

Since 1968, after the development of multivariate model, financial health of the corporate sector to predict their financial failure is heavily studied. Altman Z-Score is the most efficient model to judge the financial failure of the companies. This study uses Altman’s Z-Score and current ratio to assess the financial status of sugar sector companies listed at Karachi stock exchange. Sugar sector is the second largest slice among all sectors listed at Karachi stock exchange. Total population sampling technique was used in this study and all thirty five sugar sector listed companies at KSE were included in this study to get …

Would Women Leaders Have Prevented The Global Financial Crisis? Teaching Critical Thinking By Questioning A Question, Julie Nelson

Julie A. Nelson

Would having more women in leadership have prevented the financial crisis? This question, raised in the popular media, can make effective fodder for teaching critical thinking within courses such as gender and economics, money and financial institutions, pluralist economics, or behavioural economics. While the question, as posed, demands an answer of 'Yes - sex differences in traits are important' or 'No - gender is irrelevant', students can be encouraged to question the question itself. The first part of this essay briefly reviews literature on the sameness-versus-difference debate, noting that the belief in exaggerated behavioural differences between men and women is …

An Analysis Of Extreme Price Shocks And Illiquidity Among Systematic Trend Followers, Bernard Lee, Shih-Fen Cheng, Annie Koh

Shih-Fen Cheng

We construct an agent-based model to study the interplay between extreme price shocks and illiquidity in the presence of systematic traders known as trend followers. The agent-based approach is particularly attractive in modeling commodity markets because the approach allows for the explicit modeling of production, capacities, and storage constraints. Our study begins by using the price stream from a market simulation involving human participants and studies the behavior of various trend-following strategies, assuming initially that their participation will not impact the market. We notice an incremental deterioration in strategy performance as and when strategies deviate further and further from the …

Would Position Limits Have Made Any Difference To The 'Flash Crash' On May 6, 2010, Wing Bernard Lee, Shih-Fen Cheng, Annie Koh

Shih-Fen CHENG

On May 6, 2010, the US equity markets experienced a brief but highly unusual drop in prices across a number of stocks and indices. The Dow Jones Industrial Average (DJIA) fell by approximately 9% in a matter of minutes, and several stocks were traded down sharply before recovering a short time later. Earlier research by Lee, Cheng and Koh (2010) identified the conditions under which a “flash crash” can be triggered by systematic traders running highly similar trading strategies, especially when they are “crowding out” other liquidity providers in the market. The authors contend that the events of May 6, …

An Analysis Of Extreme Price Shocks And Illiquidity Among Systematic Trend Followers, Wing Bernard Lee, Shih-Fen Cheng, Annie Koh

Shih-Fen Cheng

We construct an agent-based model to study the interplay between extreme price shocks and illiquidity in the presence of systematic traders known as trend followers. The agent-based approach is particularly attractive in modeling commodity markets because the approach allows for the explicit modeling of production, capacities, and storage constraints. Our study begins by using the price stream from a market simulation involving human participants and studies the behavior of various trend-following strategies, assuming initially that their participation will not impact the market. We notice an incremental deterioration in strategy performance as and when strategies deviate further and further from the …

Would Price Limits Have Made Any Difference To The 'Flash Crash' On May 6, 2010, Wing Bernard Lee, Shih-Fen Cheng, Annie Koh

Shih-Fen CHENG

On May 6, 2010, the U.S. equity markets experienced a brief but highly unusual drop in prices across a number of stocks and indices. The Dow Jones Industrial Average (see Figure 1) fell by approximately 9% in a matter of minutes, and several stocks were traded down sharply before recovering a short time later. The authors contend that the events of May 6, 2010 exhibit patterns consistent with the type of "flash crash" observed in their earlier study (2010). This paper describes the results of nine different simulations created by using a large-scale computer model to reconstruct the critical elements …

An Analysis Of Extreme Price Shocks And Illiquidity Among Trend Followers, Bernard Lee, Shih-Fen Cheng, Annie Koh

Shih-Fen CHENG

We construct an agent-based model to study the interplay between extreme price shocks and illiquidity in the presence of systematic traders known as trend followers. The agent-based approach is particularly attractive in modeling commodity markets because the approach allows for the explicit modeling of production, capacities, and storage constraints. Our study begins by using the price stream from a market simulation involving human participants and studies the behavior of various trend-following strategies, assuming initially that their participation will not impact the market. We notice an incremental deterioration in strategy performance as and when strategies deviate further and further from the …

An Agent-Based Commodity Trading Simulation, Shih-Fen Cheng, Yee Pin Lim

Shih-Fen CHENG

In this paper, an event-centric commodity trading simulation powered by the multiagent framework is presented. The purpose of this simulation platform is for training novice traders. The simulation is progressed by announcing news events that affect various aspects of the commodity supply chain. Upon receiving these events, market agents that play the roles of producers, consumers, and speculators would adjust their views on the market and act accordingly. Their actions would be based on their roles and also their private information, and collectively they shape the market dynamics. This simulation has been effectively deployed for several training sessions. We will …

Good Corporate Governance: The Role Of The Accountant, Professor Ben C Osisioma

Prof Ben Chuka Osisioma

Corporate governance deals with the mechanism by which stakeholders of a company exercise control over corporate managers and provide overall direction to the firm, such that stakeholders’ interests are protected. In such a situation, the firm operates more responsibly and profitably, relations are enhanced between the firm and all stakeholders - shareholders, policyholders, employees, suppliers and society at large - the quality of executive and non-executive directors is improved, the firm thinks long-term, information needs of all stakeholders are satisfied, and executive management is monitored properly in the interest of shareholders. The role of the accountant in this setting, is …

Demanda De Institucionales Por Emisiones De Medianas Empresas, John Pineda Galarza

John Pineda Galarza

En abril de 2013 se concretó la primera emisión de papeles comerciales en el ámbito del Mercado Alternativo de Valores (MAV) la cual fue un éxito pues se logró una demanda de 3 a 1, sin embargo los inversionistas institucionales brillaron por su ausencia. En el presente artículo, se analizan los principales desincentivos que tienen inversionistas institucionales como las AFP para invertir en instrumentos emitidos por medianas empresas, planteando en ese sentido algunos temas pendientes en relación con el MAV.

Personal Letter From A Reader, Symphony Music

Symphony Music

Reader's response highlighting the emotional costs of the bank's mortgage servicing behavior.

Cybersecurity In The Perspective Of Internet Traffic Growth, Henk Lm Kox

Henk LM Kox

Private and public concern about digital security, cybercrime and data privacy is growing the last few years. If Internet-related markets are flexible enough to cope with security concerns, given time, one would expect that - per unit of Internet traffic - the number and costs of cybersecurity incidents fall over time. This paper is a first attempt to assess empirically whether overall Internet traffic growth has grown faster than the number of cybersecurity incidents. The conclusion is that, overall, the Internet has over time has become a safer place when measured by the number of security incidents per unit of …