Finance Industry (finance + industry)

Distribution by Scientific Domains

Selected Abstracts

The Expansion of the Finance Industry and Its Impact on the Economy: A Territorial Approach Based on Swiss Pension Funds

Josť Corpataux
abstract A new economic geography of finance is emerging, and the current "financialization" of contemporary economies has contributed greatly to the reshaping of the economic landscape. How can these changes be understood and interpreted, especially from a territorial point of view? There are two contradictory economic theories regarding the tangible effects of the rise of the finance industry. According to neoclassical financial theorists, the finance industry's success is based on its positive effects on the real economy through its capacity to allocate financial resources efficiently. An alternative approach, adopted here, posits that finance does not merely mirror the real economy and that the financial economy, far from being a simple instrument for the allocation of capital, has its own autonomy, its own logic of development and expansion. A series of complex, and sometimes contradictory, connections link financial markets and the real economy, and there are some tensions between them, calling into question the coherence of the regional and national economies that follow from them. Moreover, the territorial approach shows how the mobility/liquidity of capital and the changing dimensions of new regions and countries are central to the finance industry's functioning. This article builds an understanding of the financial system through the lens of pension funds and highlights the impact of such a system on the real economy and its geography. [source]


Gordon L Clark
ABSTRACT. If the social relations and inherited configuration of production were at the core of economic geography a decade ago, these aspects of the world are increasingly taken for granted. The global scope of industry and corporate strategy has claimed increasing attention over the past decade. And while any ,new' economic geography must have something to say about the nature of human agency and the role of institutions in structuring the landscape, care must be taken not to exaggerate their significance for constructive interaction. In point of fact, the global finance industry is an essential lens through which to study contemporary capitalism from the top-down and the bottom-up. If we are to understand the economic landscape of twenty-first century capitalism, it should be understood through global financial institutions, its social formations and investment practices. This argument is developed by reference to the recent literature on the geography of finance and a metaphor , money flows like mercury , designed to explicate the spatial and temporal logic of global capital flows. Some may dispute this argument, but in doing so they lament the passing of an era rather than advancing a convincing counterclaim about how the world is and what it might become. All this means that we have to rethink the significance of geographical scale and organizational processes as opposed to an unquestioned commitment to localities. [source]

Co-determination and working time accounts in the German finance industry

Richard Croucher
ABSTRACT This article examines the workings of co-determination in the German finance industry through two case studies examining the introduction of working time accounts. It is shown that the accounts posed important new challenges for employees and works councillors that represented variants of long-existing negotiations around working time issues. The problems were clear and similar in both cases, giving rise to complaints to councillors, though not to managers. Councillors' responses differed in the two companies. In one, they successfully re-negotiated the agreement under which the accounts had been introduced. In the other, they did not succeed in doing so. The differences between the two representative bodies are analysed to reflect on a theory of employee representative influence. [source]

Business failure prediction using decision trees

Adrian Gepp
Abstract Accurate business failure prediction models would be extremely valuable to many industry sectors, particularly financial investment and lending. The potential value of such models is emphasised by the extremely costly failure of high-profile companies in the recent past. Consequently, a significant interest has been generated in business failure prediction within academia as well as in the finance industry. Statistical business failure prediction models attempt to predict the failure or success of a business. Discriminant and logit analyses have traditionally been the most popular approaches, but there are also a range of promising non-parametric techniques that can alternatively be applied. In this paper, the relatively new technique of decision trees is applied to business failure prediction. The numerical results suggest that decision trees could be superior predictors of business failure as compared to discriminant analysis. Copyright © 2009 John Wiley & Sons, Ltd. [source]


Michael Kalkbrener
Capital allocation techniques are of central importance in portfolio management and risk-based performance measurement. In this paper we propose an axiom system for capital allocation and analyze its satisfiability and completeness: it is shown that for a given risk measure , there exists a capital allocation ,, that satisfies the main axioms if and only if , is subadditive and positively homogeneous. Furthermore, it is proved that the axiom system uniquely specifies ,,. We apply the axiomatization to the most popular risk measures in the finance industry in order to derive explicit capital allocation formulae for these measures. [source]

Toward Understanding Islamic Corporate Governance Issues in Islamic Finance

Maria Bhatti
This article presents recent developments on legal issues associated with corporate governance in the Islamic finance industry based on a contractual pyramid. It presents the Islamic corporate governance (ICG) model and discusses its viability in a 21st-century corporate structure. The model is based on the institution of Hisba, which demands proper and honest bookkeeping, disclosure, and transparency based on the Shariah principles of Islamic ethics. This article proposes a model of ICG that reconciles the objectives of Shariah law with the stakeholder model of corporate governance. It argues that this may be viable due to the emphasis that Shariah laws place on property and Islamic financial contractual rights. The article also discusses a model of ICG that is consistent with principles outlined by the Organisation for Economic Co-operation and Development as well as Shariah law. Such a model of corporate governance would encourage capital formation, foster strong markets, and encourage judgment and transparency, which are all principles central to Shariah laws. [source]