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Foreign Investors (foreign + investor)
Selected AbstractsThe Behavior and Performance of Foreign Investors in Emerging Equity Markets: Evidence from TaiwanINTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2003Anchor Y. Lin This study investigates trading behavior and investment performance of foreign investors in 60 large-size firms listed on the Taiwan Stock Exchange. Strong evidence is found that foreign investors employ momentum strategies of buying past winners and selling past losers and favor large-size, high book-to-market, and high-tech stocks, while no evidence is found that foreign investors herd on market consensus. Findings show that foreign investors are short-term superior performers but long-term inferior performers. The short-term superior performance appears to be driven partially by price momentum of winners portfolios rather than by risk taking. After controlling for firm size, share turnover, and industry, foreigners' short-term performance in large-size, high-turnover, and high-tech stocks is better than it is in small-size, low-turnover, and non-high-tech stocks. [source] Interaction between Foreign and Domestic Investors in the Korean Stock and Futures Markets,ASIAN ECONOMIC JOURNAL, Issue 2 2009Young-Rae Song G1; F3 The present paper analyzes the behavioral relations of major investor groups in the stabilized Korean stock and futures markets after the 1997 Asian financial crisis. Investor groups cannot be classified as positive or negative feedback traders on market returns when both stock and futures markets are considered, which is inconsistent with the results in Ghysels and Seon (2005). Foreign investors and domestic institutions tend to take opposite positions in both markets. The impact of foreign investors on the basis change is significantly negative in the futures market, whereas domestic institutions have a negative relation in the stock market. This supports the view that selling activity of foreign investors in the futures market pulls the futures price down compared with the index value and, consequently, induces the reverse cash-and-carry trade of domestic institutions. This relationship, which negatively influenced the Korean economy during the crisis, as shown in Ghysels and Seon (2005), still exists in the Korean financial markets. [source] Financing Alternatives for Chinese Small and Medium Enterprises: The Case for a Small and Medium Enterprise Stock MarketCHINA AND WORLD ECONOMY, Issue 1 2007Hung-gay Fung Dr Y. S. Tsiang Professor Abstract Financing alternatives for small and medium enterprises in China are discussed in the present study. In particular, we analyze the significant changes and developments in China s "second board" stock market. China s extensive network of regional assets and equity exchanges, which were set up to facilitate private equity transfer, and non-performing loan transactions seem to partially fill the void for small and medium enterprises, which cannot easily obtain approval for listing on the stock exchanges. Foreign investors can identify investment opportunities in non-listed domestic state-owned and private businesses through these regional assets and equity exchanges. At the same time, foreign stock markets are now attracting the young Chinese enterprises to list their stocks on their exchanges. (Edited by Zhinan Zhang) [source] Debt v. Foreign Direct Investment: The Impact of Sovereign Risk on the Structure of International Capital FlowsECONOMICA, Issue 273 2002Monika Schnitzer The paper compares the two standard forms of international investment in developing countries, debt and foreign direct investment (FDI), from a finance perspective. The sovereign risks associated with debt finance are shown to be generally less severe than the ones that come with FDI. FDI is chosen only if the foreign investor is more efficient in running the project, if the project is risky, and if the foreign investor has a good outside option which deters creeping expropriation. The sovereign risk problem of FDI can be alleviated if the host country and the foreign investor form a joint venture. [source] The Value of Imputation Tax Credits on Australian Hybrid SecuritiesINTERNATIONAL REVIEW OF FINANCE, Issue 3 2010CLINTON FEUERHERDT ABSTRACT Hybrid securities are becoming an increasingly important component of the capital structure of Australian firms. While displaying characteristics of both debt and equity, one principal equity attribute of hybrids is their ability to pay franked dividends. This enables resident domestic investors to claim corporate tax payments as a credit against personal tax obligations under Australia's dividend imputation tax system. This paper estimates a value for the ,franking credits' that attach to hybrid securities by examining stock price changes around ex-dividend dates. We add to the literature that examines the ex-day price changes of ordinary shares (OS) in that the hybrid securities we examine have high dividend yields and are relatively insensitive to market movements. Therefore the signal-to-noise ratio is much higher than for OS. Our analysis reveals that cum-dividend day prices on hybrid securities do not include any value for franking credits. This result is consistent with the notion that the price-setting investor in the Australian market is a foreign investor who places no value on franking credits. [source] Competing Rationales for Corporate Governance in France: Institutional Complementarities between Financial Markets and Innovation SystemsCORPORATE GOVERNANCE, Issue 2 2008Soo H. Lee ABSTRACT Manuscript Type: Conceptual Research Question/Issue: This paper identifies the causes and consequences of corporate governance reform with reference to the French case. By disaggregating institutional complementarities into global and domestic dimensions, we analyze the path of institutional change compelled by financial efficiency and cooperative innovation. Research Findings/Results: Our analysis of the French case shows that both converging and diverging forces of institutional change coexist, shaping selective responses to globalization. While the adoption of the shareholder model is necessary for resource acquirement from the global capital markets, resource allocation in the cooperative innovation systems reinforces the stakeholder model. The French case confirms the sustainability of distinctive institutional complementarities, albeit with selective adaptation based on a sense-making social compromise. Theoretical Implications: The French case reminds us of the importance of distinctive institutional traditions and dominant social rationalities to understand the underlying logic of governance reform. The comparative research on corporate governance needs to address not just the cross-country variations in institutional arrangements and practices, but also the clash of competing rationales for reform explicitly in comparative terms within a single country context. Practical Implications: For foreign investors, it is vital to understand the unique institutional environment of state-centred stakeholder economies if they are to negotiate the best terms of return and to avoid unnecessary conflicts. French managers are expected to devise strategic choices responding to the competing rationales of governance. Managerial sense-making is essential for achieving sound long-term performance, upon which the legitimacy and sustainability of the constellation of selective governance rests. [source] Corporate Governance in the Russian Federation: the relevance of the OECD Principles on shareholder rights and equitable treatmentCORPORATE GOVERNANCE, Issue 2 2001Fianna Jesover Despite progress in developing extensive legislation and regulations, there is still a long way to go before the standards of corporate governance in Russia will instil widespread confidence in investors. The emphasis is now on their implementation and enforcement by the state and private sector institutions. Transparent, equitable rules and predictable enforcement mechanisms are necessary to make the Russian economy attractive to both domestic and foreign investors, and enhance public confidence in the overall reform process. This paper uses the first two chapters of the OECD Principles of Corporate Governance on shareholder rights and their equitable treatment and looks through their prism at the Russian corporate governance condition. [source] ,Going out': the growth of Chinese foreign direct investment in Southeast Asia and its implications for corporate social responsibilityCORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 3 2005Stephen Frost Abstract Analysts have finally started to pay increasing attention to the rapidly rising levels of Chinese investment abroad. Deals such as Lenovo's purchase of IBM's PC production arm have sparked interest in a quiet revolution. The story now is not just about the flow of foreign investment in China, but also of the flow of China's investment into other countries. However, most interest so far has concentrated on big ticket investments in the West and the consequences for European and particularly US geopolitical interests. Of less concern thus far have been the implications of Chinese investment on corporate social responsibility. This paper is a preliminary assessment of the potential implications of Chinese investments: in particular, the effect on sanctions designed to improve human rights (with specific reference to Myanmar), and whether pressure can be maintained on foreign investors to comply with international standards and norms in the face of Chinese investment. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment. [source] Multinational Corporations and Patterns of Local Knowledge Transfer in Costa Rican High-Tech IndustriesDEVELOPMENT AND CHANGE, Issue 3 2008Elisa Giuliani ABSTRACT Over recent decades, governments in industrializing countries have promoted policies to attract foreign investors, anticipating the benefits of technology transfer to host economies. During the 1990s, Costa Rica adopted an industrialization strategy based on attracting high-tech multinational companies (MNCs). Using an original survey of a sample of high-tech MNC subsidiaries, this article shows that the new wave of efficiency-seeking subsidiaries tend not to transfer knowledge to domestic firms even when they establish backward linkages with them. Instead, most of the knowledge transfer occurs between high-tech foreign subsidiaries. This has clear policy implications for host country governments. [source] Foreign Direct Investment in the CaribbeanDEVELOPMENT POLICY REVIEW, Issue 1 2008Ivar Kolstad This article addresses the question of whether the Caribbean is particularly attractive or unattractive to foreign investors, and if it has specific characteristics that attract or deter FDI. An econometric analysis of data from 135 countries for 1980-2002 shows that the Caribbean does not suffer from low inflows of FDI; on the contrary, Caribbean countries receive more FDI than comparable countries in other regions. This reflects two contradictory effects. On the one hand, FDI inflows may be particularly sensitive to political instability in the region; on the other hand, the absence of regulation appears to have been a particularly beneficial factor in attracting FDI to the Caribbean. [source] WINNERS AND LOSERS FROM DOLLAR DEPRECIATIONECONOMIC AFFAIRS, Issue 1 2008Sergio Da Silva We examine the relationship between the US current account deficit, the international value of the dollar, and the dollar reserves of foreign central banks. The declining dollar could benefit US savers at the expense of foreign investors in the USA. [source] Geographical Aspects of Food Industry FDI in the CEE Countries Geografische Aspekte ausländischer Direktinvestitionen (ADI) in der Lebensmittelindustrie in mittel- und osteuropäischen Ländern Les dimensions géographiques de l'IDE dans l'industrie alimentaire des pays d'Europe centrale et orientaleEUROCHOICES, Issue 1 2009Csaba Jansik Summary Geographical Aspects of Food Industry FDI in the CEE Countries Food industry FDI has favoured certain food processing sub-sectors over others and it has also been distributed rather unevenly in geographical terms both between countries and regionally within each country. As for the regional distribution, foreign investors have typically targeted locations with a relatively high density of consumers as opposed for instance to prioritising the proximity of agricultural raw materials. The capital city areas and their surrounding regions have attracted a much higher proportion of total food industry FDI than their contribution to agricultural and food processing output would warrant. FDI has contributed in many ways to the development of the regions and industries which have received capital inflows. There has been some levelling off in FDI between countries more recently, a trend driven by the tendency for multinational enterprises to shift their production capacity across national borders among their CEE subsidiaries in a search for greater economies of scale or cost savings. This realignment has helped certain branches of the food industry in some CEE countries perform better than others in competing for common EU food markets. Positive effects of the recent FDI inflows include rapid productivity improvements and enhancement of food export volumes. L'IDE dans l'industrie alimentaire a privilégié certains sous-secteurs de la transformation alimentaire plutôt que d'autres et sa répartition géographique, à la fois entre pays et entre régions au sein d'un même pays, a été plutôt inégale. En termes de répartition régionale, les investisseurs étrangers ont typiquement ciblé des zones où la densité des consommateurs est assez élevée plutôt que de donner, par exemple, la prioritéà la proximité des produits agricoles primaires. Les capitales et les régions qui les entourent ont attiré une proportion bien plus grande de l'ensemble de l'IDE dans l'industrie alimentaire que ce que leur contribution à la production agricole et alimentaire représenterait. L'IDE a contribué de maintes façons au développement des régions et des industries qui ont reçu des capitaux. Une certaine égalisation de l'IDE s'est produite plus récemment entre pays, ce phénomène étant entraîné par la tendance des entreprises multinationales à transférer leur capacité de production d'un pays à l'autre entre leurs filiales d'Europe centrale et orientale, à la recherche d'économies d'échelle et de coûts. Ce rééquilibrage a aidé certaines branches de l'industrie alimentaire de certains pays d'Europe centrale et orientale à réussir mieux que d'autres dans la compétition sur les marchés alimentaires de l'UE. Parmi les effets positifs des entrées de capitaux d'IDE récentes, figurent des améliorations rapides de la productivité et la croissance en volume des exportations de produits alimentaires. Ausländische Direktinvestitionen (ADI) in der Lebensmittelindustrie haben sich auf bestimmte Teilsektoren konzentriert. Außerdem ist die Konzentration der ADI sowohl geografisch zwischen den Ländern als auch den Regionen einzelner Länder ungleich. Bei der regionalen Konzentration haben die ausländischen Investoren ihre Wahl nicht etwa anhand der Entfernung zu landwirtschaftlichen Rohstoffen getroffen, sondern Orte mit einer relativ hohen Kundendichte bevorzugt. Auf die Hauptstadtregionen entfiel ein viel größerer Anteil an den gesamten ADI als es ihre Beteiligung an der Produktionsmenge in Landwirtschaft und Lebensmittelverarbeitung rechtfertigen würde. ADI haben in vielerlei Hinsicht zur Entwicklung der Regionen und Industrien beigetragen, die einen Kapitalzufluss erfahren haben. In letzter Zeit wurden ADI zwischen den Ländern etwas weniger konzentriert, da multinationale Unternehmen danach streben, ihre Produktionskapazitäten länderübergreifend auf ihre MOE-Tochtergesellschaften zu verlagern, um Skaleneffekte und Kosteneinsparungen besser nutzen zu können. Durch diese Neuorientierung konnten sich bestimmte Lebensmittelindustriezweige in einigen MOEL gegenüber anderen im Wettbewerb um die gemeinsamen Lebensmittelmärkte der EU behaupten. Zu den positiven Auswirkungen von ADI-Zuflüssen zählen eine rasche Steigerung der Produktivität sowie größere Mengen an Lebensmittelexporten. [source] Price and Volatility Transmission across BordersFINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2006Louis Gagnon Over the past forty years, financial markets throughout the world have steadily become more open to foreign investors. With open markets, asset prices are determined globally. A vast literature on portfolio choice and asset pricing has evolved to study the importance of global factors as well as local factors as determinants of portfolio choice and of expected returns on risky assets. There is growing evidence that risk premia are increasingly determined globally. An important outcome of this force of globalization is increased comovement in asset prices across markets. This survey study examines the literature on the dynamics of comovements in asset prices and volatility across markets around the world. The literature began in the 1970s in conjunction with early theoretical developments on international asset pricing models, but it blossomed in the late 1980s and early 1990s with the availability of comprehensive international stock market databases and the development of econometric methodology to model these dynamics. [source] Ownership, Governance, and Bank Performance: Korean ExperienceFINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 4 2005Sungho Choi G21; G32; G34 The paper examines the effect of ownership and governance on firm performance. Tracing the post financial crisis experience, 1998,2002, of the Korean commercial bank industry, the paper investigates whether the involvement of foreign investors in the ownership structure had any significant effect on the banks' performance i.e., return and risk measures. Further, it examines the effects of the presence of outside directors, especially directors from foreign countries, in the corporate board structure impacts banks performance. Evidence indicates that the extent of the foreign ownership level, not the mere existence of foreign ownership, has a significant positive association with the bank return and a significant negative association with the bank risk. The number of outside board of directors does not have any significant affect on performance however the presence of a foreign director on that board is significantly associated with bank return and risk. These findings are relatively robust under the different specifications of performance measures. [source] Market Segmentation and Information Asymmetry in Chinese Stock Markets: A VAR AnalysisFINANCIAL REVIEW, Issue 4 2003Jian Yang G15/G32 Abstract This study examines the market segmentation and information asymmetry patterns in Chinese stock markets. The recursive cointegration analysis confirms that each of six markets is not linked with other markets in the long run. Further, the result from data-determined forecast error variance decomposition clearly shows that foreign investors in the Shanghai B-share market are better informed than Chinese domestic investors in two A-share markets and foreign investors in Shenzhen and Hong Kong markets over time. The finding challenges a widespread assumption of less informed foreign investors in the literature, but suggests that foreign investors could be more informed in emerging markets. [source] Self-Interest, Foreign Need, and Good Governance: Are Bilateral Investment Treaty Programs Similar to Aid Allocation?FOREIGN POLICY ANALYSIS, Issue 3 2006ERIC NEUMAYER Bilateral investment treaties (BITs) have become the most important legal mechanism for the encouragement and governance of foreign direct investment (FDI) in developing countries. Yet practically no systematic evidence exists on what motivates capital-exporting developed countries to sign BITs earlier with some developing countries than with others, if at all. The theoretical framework from the aid allocation literature suggests that developed countries pursue a mixture of self-interest, foreign need and, possibly, good governance. We find evidence that both economic interests of developed countries' foreign investors and political interests of developed countries determine their scheduling of BITs. However, foreign need as measured by per capita income is also a factor, whereas good governance by and large does not matter. These results suggest that BIT programs can be explained using the same framework successfully applied to the allocation of aid. At the same time, self-interest seems to be substantively more important than developing country need when it comes to BITs. [source] Influence of cultural factors on price clustering and price resistance in China's stock marketsACCOUNTING & FINANCE, Issue 4 2007Bill M. Cai G10; G14 Abstract This paper builds on prior research by analysing the impact of cultural factors on both price clustering and price resistance in China's stock markets. The results support the presence of cultural factors impacting on price clustering with the digit 8 showing a higher propensity for clustering and the digits 4 and 7 showing a lower propensity in the A-share market, where stock is denominated in renminbi and traded by mainland Chinese. These results are further supported by an analysis of the B-share market, where cultural factors have no (or less) impact on the price of Chinese stocks traded by foreign investors in US dollars (or in Hong Kong dollars). A range of measures for price resistance show the digits 0 and 5 to be significant resistance points in the A-share market. Although digit 8 cannot be considered as a resistance point, its resistance level is highest among the remaining numbers. In conclusion, cultural factors help to explain not only price clustering in the Chinese stock markets but price resistance levels as well, albeit at a weak level. [source] Local dimensions of global investment: Israeli property firms in Central EuropeINTERNATIONAL JOURNAL OF URBAN AND REGIONAL RESEARCH, Issue 2 2003Igal Charney Transnational property investment has increased dramatically during the last few decades. This process has been traced by literature focusing on capital-rich countries (e.g. the United States, Canada, Japan) and on major world cities. More recently, in tandem with the collapse of the Berlin Wall, the geographical horizons of foreign investors have broadened to include former socialist countries. This article examines the recent surge in Israeli property investment in Central Europe and argues that global flows depend on relationships between place of origin and destination. Mobility of property capital creates networks that connect cities on a transnational basis. Les investissements immobiliers transnationaux ont énormément augmenté au cours des dernières décennies. Cet aspect a été suivi et documenté surtout pour les pays riches en capitaux (Etats-Unis, Canada, Japon, par exemple) et les grandes villes mondiales. Plus récemment, parallèlement à la chute du Mur de Berlin, les horizons géographiques des investisseurs étrangers se sont élargis aux anciens pays socialistes. L'article examine l'afflux récent d'investissements immobiliers israéliens en Europe centrale, affirmant que les flux planétaires dépendent des relations entre les lieux d'origine et de destination. La mobilité des capitaux immobiliers crée des réseaux qui relient des villes au plan transnational. [source] Stock Index Futures Prices and the Asian Financial Crisis,INTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2007TAUFIQ HASSAN ABSTRACT This study reports new findings on the behavior of index futures (FKLI: code name of Kuala Lumpur Index Futures contract) prices and also records the effect of a major financial crisis on the prices. Since the inception of trading in 1995, the FKLI has been selling at a discount, which gradually increased till early 1997; further, at the onset of the financial crisis in July 1997, FKLI prices were at a high premium relative to its theoretical values. This significant mispricing of the contract declined after the initial overreaction to the crisis. Herding behavior during crisis, liquidity constraint and imposition of trading restrictions are some plausible explanations for the mispricing. This study also investigates whether trades by foreign investors had any impact when compared with prices by domestic investors. We find that foreign investors had a negative influence on permanent price changes while the domestic investors had a positive effect. [source] How do Individual, Institutional, and Foreign Investors Win and Lose in Equity Trades?INTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2006Evidence from Japan ABSTRACT We investigate the gains and losses from equity trades of individual investors, various institutional investors, and foreign investors in the Tokyo Stock Exchange. We develop a trade-weighted performance measure and examine the impact of trading intervals, price spreads, and market timing on performance. We find that different investor types gain or lose from different sources. For example, we discover that individual investors have poor market timing ability but potentially gain during short-run trading intervals as their average sell price is consistently higher than the average purchase price. In contrast, we find that foreign investors consistently generate gains from trade due to good market timing, although their average sell price is lower than the average purchase price. Also, we find that foreign investors extract significant portion of their gains by trading against Japanese institutional investors when Japanese investors trade before their fiscal-year end. [source] The Behavior and Performance of Foreign Investors in Emerging Equity Markets: Evidence from TaiwanINTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2003Anchor Y. Lin This study investigates trading behavior and investment performance of foreign investors in 60 large-size firms listed on the Taiwan Stock Exchange. Strong evidence is found that foreign investors employ momentum strategies of buying past winners and selling past losers and favor large-size, high book-to-market, and high-tech stocks, while no evidence is found that foreign investors herd on market consensus. Findings show that foreign investors are short-term superior performers but long-term inferior performers. The short-term superior performance appears to be driven partially by price momentum of winners portfolios rather than by risk taking. After controlling for firm size, share turnover, and industry, foreigners' short-term performance in large-size, high-turnover, and high-tech stocks is better than it is in small-size, low-turnover, and non-high-tech stocks. [source] Home Bias, Foreign Mutual Fund Holdings, and the Voluntary Adoption of International Accounting StandardsJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2007VICENTIU M. COVRIG ABSTRACT We test the assertion that a consequence of voluntarily adopting International Accounting Standards (IAS) is the enhanced ability to attract foreign capital. Using a unique database that reports firm-level holdings of over 25,000 mutual funds from around the world, our multivariate tests find that average foreign mutual fund ownership is significantly higher among IAS adopters. We also find that IAS adopters in poorer information environments and with lower visibility have higher levels of foreign investment, consistent with firms using IAS adoption to provide more information and/or information in a more familiar form to foreign investors. Taken together, our findings are consistent with voluntary IAS adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency. [source] Changes in Korean Corporate Governance: A Response to CrisisJOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2008E. Han Kim In the last months of 1997, the value of the Korean currency lost over half its value against the dollar, and the ruling party was swept from power in presidential elections. One of the fundamental causes of this national economic crisis was the widespread failure of Korean companies to earn their cost of capital, which contributed to massive shareholder losses and calls for corporate governance reform. Among the worst performers, and hence the main targets of governance reform, were family-controlled Korean business groups known as chaebol. Besides pursuing growth and size at the expense of value, such groups were notorious for expropriating minority shareholders through "tunneling" activities and other means. The reform measures introduced by the new administration were a mix of market-based solutions and government intervention. The government-engineered, large-scale swaps of business units among the largest chaebol,the so-called "big deals" that were designed to force each of the groups to identify and specialize in a core business,turned out to be failures, with serious unwanted side effects. At the same time, however, new laws and regulations designed to increase corporate transparency, oversight, and accountability have had clearly positive effects on Korean governance. Thanks to reductions in barriers to foreign ownership of Korean companies, such ownership had risen to about 37% at the end of 2006, up from just 13% ten years earlier. And in addition to the growing pressure for better governance from foreign investors, several newly formed Korean NGOs have pushed for increased transparency and accountability, particularly among the largest chaebol. The best governance practices in Korea today can be seen mainly in three kinds of corporations: (1) newly privatized companies; (2) large corporations run by professional management; and (3) banks with substantial equity ownership in the hands of foreign investors. The improvements in governance achieved by such companies,notably, fuller disclosure, better alignment of managerial incentives with shareholder value, and more effective oversight by boards,have enabled many of them to meet the global standard. And the governance policies and procedures of POSCO, the first Korean company to list on the New York Stock Exchange,as well as the recent recipient of a large equity investment by Warren Buffett,are held up as a model of best practice. At the other end of the Korean governance spectrum, however, there continue to be many large chaebol-affiliated or family-run companies that have resisted such reforms. And aided by the popular resistance to globalization, the lobbying efforts of such firms have succeeded not only in reducing the momentum of the Korean governance reform movement, but in reversing some of the previous gains. Most disturbing is the current push to allow American style anti-takeover devices, which, if successful, would weaken the disciplinary effect of the market for corporate control. [source] Corporate Governance in IndiaJOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2008Rajesh Chakrabarti The Indian corporate governance system has both supported and held back India's ascent to the top ranks of the world's economies. While on paper the country's legal system provides some of the best investor protection in the world, enforcement is a major problem, with overburdened courts and significant corruption. Ownership remains concentrated and family business groups continue to be the dominant business model, with significant pyramiding and evidence of tunneling activity that transfers cash flow and value from minority to controlling shareholders. But for all its shortcomings, Indian corporate governance has taken major steps toward becoming a system capable of inspiring confidence among institutional and, increasingly, foreign investors. The Securities and Exchanges Board of India (SEBI), which was established as part of the comprehensive economic reforms launched in 1991, has made considerable progress in becoming a rigorous regulatory regime that helps ensure transparency and fair practice. And the National Stock Exchange of India, also established as part of the reforms, now functions with enough efficiency and transparency to be generating the third-largest number of trades in the world, just behind the NASDAQ and NYSE. Among more recent changes, the enactment of Sarbanes,Oxley type measures in 2004,which includes protections for minority shareholders in family- or "promoter"-led businesses,has contributed to recent increases in institutional and foreign stock ownership. And while family- and government-controlled business groups continue to be the rule, India has also seen the rise of successful companies like Infosys that are free of the influence of a dominant family or group and have made the individual shareholder their central governance focus. [source] Morgan Stanley Panel Discussion on Seeking Growth in Emerging Markets: Spotlight on ChinaJOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2005Financial Decision Makers' Conference The treasurer of McDonald's discusses investment opportunities in China with Morgan Stanley's chief economist and its head of investment banking in China. The consensus is that the economic outlook for the country is strong, subject to some concerns about the currency, and that ongoing reforms are expected to bring about greater stability and productivity. Progress in raising Chinese banks to international capital adequacy standards, and imposing transparency and accounting requirements, has been particularly impressive. McDonald's first went to mainland China in the early 1990s. Thanks to its success in attracting suppliers and local financing and partners, it now has 600 restaurants and an ambitious expansion plan. For other U.S. and overseas companies, China's position as a global manufacturing center, its R&D capabilities, and its potential consumer market will lead to acquisitions of local companies, joint ventures, and other forms of direct investment. China's accession into the World Trade Organization has also opened a number of sectors that were previously restricted to foreign investors, including financial services. [source] Understanding the Chinese stock marketJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 6 2007Cheng Guo Stock markets are often seen as economic barometers. But until recently, the Chinese stock market hasn't reflected the growth of the Chinese economy. Why was this so? The answer lies in the peculiarities of the Chinese stock market, say the authors. And they explain what foreign investors need to know. © 2007 Wiley Periodicals, Inc. [source] The net contribution of the Mauritian export processing zone using benefit,cost analysisJOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 3 2009Rojid Sawkut Abstract An EPZ is basically no more than a device whereby imports, to be used in the production of exports, can be acquired by manufacturers on a bonded duty-free basis. They are literally industrial zones with special incentives to attract foreign investors in which imported materials undergo some degree of processing before being exported again. The logic behind these zones was the creation of an area in which domestic policies do not hold and in which, therefore, a government could implement policies designed to enable individual firms to invest profitably on the basis of a country's comparative advantage. However, although there is significant literature on the impact of EPZs on host countries, nevertheless, the evidence has mainly been concerned with their benefits and costs and has stopped short of formal benefit-cost analysis. In essence, what the empirical studies have lacked, including those done on the Mauritius Export Processing Zone (MEPZ), has been an analytical framework within which the benefits and costs of EPZs can be identified conceptually and quantified empirically. In this respect, the objective of the current paper is to formally attempt to calculate the net contribution of the MEPZ using a modified version of the enclave model put forward by Warr (1988). The results show that although Mauritius has been able to attain its objective of reducing employment and raising foreign exchange through the creation of the EPZ, yet overall the EPZ has cost more to the economy than the benefits it has conferred to the economy. This is principally because of the incentives that were given to the producers working in the EPZ sector. The costs of these incentives were higher than the overall returns obtained from the sector. The two variables that negatively contributed to the sector were domestic borrowings and electricity usage. Copyright © 2008 John Wiley & Sons, Ltd. [source] African capital markets and real sector investmentJOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 4 2005Yohane Khamfula Many African capital markets find the lack of an efficiently organized capital market a serious obstacle to the efficient use of their savings, and thus to their overall economic development. To improve the situation, this paper suggests the following policy recommendations: removal of impediments to capital market development, improvement of the financial system infrastructure for efficient trading activities, sound economic policies that stabilize the exchange rate and prices to help attract foreign investors, increased integration of the local capital market with the world capital markets, encouragement of family-owned firms to go public and, most importantly, liberalization of international capital flows. The study also proposes ,privatization' and ,currency union' as enhancers of capital mobilization for real sector investment in Africa. Copyright © 2005 John Wiley & Sons, Ltd. [source] Where Corporate Governance and Financial Analysts Affect ValuationJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2009Ran R. Barniv We examine whether corporate governance and financial analysts affect accounting-based valuation models for B and H shares traded by foreign investors in China and Hong Kong, respectively. We expect that better corporate governance and more effective analyst activity mitigate potential adverse effects on accounting valuation models generated by country-specific problems in accounting, auditing, and legal systems. We find that valuation models perform better for companies with a greater analyst following, smaller forecast errors, relatively high public ownership and a strong board structure. Valuation models and accounting numbers have only limited explanatory power and valuation role for companies with weak governance and less effective analyst performance. The findings are robust across various market value, return, unexpected return, and other accounting valuation models. The results are consistent with less informed foreign investor clienteles searching for signals of more effective analyst activity and better corporate governance mechanisms. [source] Developing Codes of Conduct: Regulatory Conversations as Means for Detecting Institutional ChangeLAW & POLICY, Issue 4 2007KARIN JONNERGÅRD The introduction of a new corporate governance code in Sweden, modeled after prevailing Anglo-Saxon norms of corporate governance, offers the opportunity to investigate global regulatory convergence. Using the metaphor of regulatory space, this article analyzes the positions of the parties who submitted formal responses to the introduction of "The Swedish Code of Corporate Governance,A Proposal from the Code Group." While the globalization of financial markets might forecast unconditional acceptance of the proposed code by business and financial interests, the analysis of who made comments, and what was said, reveals three categorically distinct groups: Swedish business "insiders" connected to the existing institutional framework who opposed changes that would erode traditional division of functions, including collective responsibility for the actions of company boards; "outsiders" (i.e., foreign investors and more marginal Swedish investors) aligned with Anglo-Saxon internationalization of the markets who would change the system of corporate accountability; and the professions (i.e., auditors), who advocated for their professional interests. Of the three groups, Swedish business insiders were most successful in gaining support for their positions. Although international financial and political interests were key to the introduction of the Code in the first place, the article demonstrates how the dynamics of national (local) culture and power structures influence the transfer of regulatory law across jurisdictions. [source] | ||||||||||||||||||||||||||||