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Investment Policies (investment + policy)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	81%
Humanities and Social Sciences	18%

Distribution within Business, Economics, Finance and Accounting

General & Introductory Economics	14%

Selected Abstracts

Divestitures and Divisional Investment Policies

THE JOURNAL OF FINANCE, Issue 6 2003
Amy Dittmar
ABSTRACT We study a sample of diversified firms that alter their organizational structure by divesting a business segment. These firms experience a reduction in the diversification discount after the divestiture. We show that the efficiency of segment investment increases substantially following the divestiture and that this improvement is associated with a decrease in the diversification discount. Our results support the corporate focus and financing hypotheses for corporate divestitures. We demonstrate that inefficient investment is partly responsible for the diversification discount and show that asset sales lead to an improvement in the efficiency of investment for remaining divisions. [source]

Elites in Local Development in the Philippines

DEVELOPMENT AND CHANGE, Issue 1 2010
Andreas Lange
ABSTRACT For many Philippine provinces, decentralization and more autonomous local development planning did not lead to the desired outcomes. This article examines the experiences of the two provinces of Cebu and Leyte. While Cebu became a centre of trade and industry, Leyte is still struggling with its local economy oriented to natural resources. A main reason for the divergent development paths of the two islands can be found in the emergence of different elite structures, which resulted in different path-dependent patterns of economic specialization. Despite this different historical experience, both provinces today suffer from similar institutional infirmities in their planning system for promoting local development. Local planning capacity constraints, such as regional and local co-ordination and co-operation patterns, local finances, human capital and knowledge are analysed. The Cebuano elites used the room for manoeuvre provided by decentralization reforms more successfully than elites in Leyte. This created pockets of efficiency in Cebu leading to more development-friendly investment policies. In order to increase local and regional planning capacity, short-term interventions and policy reforms at the local, regional and national level are discussed. [source]

Semi-analytic Approaches to Collateralized Debt Obligation Modelling

ECONOMIC NOTES, Issue 2 2004
Christian Bluhm
Collateralized debt obligations (CDOs) constitute an important class of asset-backed securities. Most major banks use CDOs as portfolio management tools for achieving regulatory capital relief, economic risk transfer and funding. On the other side, banks and other financial institutions invest in CDO tranches with a risk/return profile matching their risk appetite and investment policies. For both sides (risk selling and risk buying) of a CDO transaction, sound mathematical tools are required for an evaluation of the deal. In this paper, we investigate some techniques for CDO modelling, paying special attention to approaches based on semi-analytic approximations. [source]

Why Do Some Family Businesses Out-Compete?

ENTREPRENEURSHIP THEORY AND PRACTICE, Issue 6 2006
Governance, Long-Term Orientations, Sustainable Capability
This article seeks to link the domains of corporate governance, investment policies, competitive asymmetries, and sustainable capabilities. Conditions such as concentrated ownership, lengthy tenures, and profound business expertise give some family-controlled business (FCB) owners the discretion, incentive, knowledge, and ultimately, the resources to invest deeply in the future of the firm. These long-term investments accrue from particular governance conditions and engender competitive asymmetries,organizational qualities that are hard for other firms to copy, and thus, if tied to the value chain, create capabilities that are sustainable. Investments in staff and training, e.g., create tacit knowledge and preserve it within the firm. Investments in enduring relationships with partners enhance access to resources and free firms to focus on core competencies. And devotion to a compelling mission dedicates most of these investments to a core competency. When such investments are farsighted, orchestrated, and ongoing, capabilities will tend to evolve in a cumulative trajectory, making them doubly hard to imitate and thereby extending competitive advantage. Arguments are supported by making reference to the literature on corporate governance and agency theory and to emerging research on FCBs. [source]

Can Diversification Create Value?

FINANCIAL MANAGEMENT, Issue 1 2005
Evidence from the Electric Utility Industry
Despite SEC and state-level resistance, and contrary to the trend pursued by other firms, many electric utilities have diversified into non-electric and unregulated businesses. Moreover, this failure to focus has been rewarded with higher firm values, again contrary to the discounts documented in the literature for other diversifying firms. Prior literature has questioned whether these premiums (or discounts) can be attributed to diversification per se. Rather, these premiums could arise from the characteristics of the diversifying firms, which have then endogenously chosen to diversify. In a new approach, where regulation can make the diversification decision largely exogenous, we examine the investment policies of the comparable electric-segments in the diversifying and non-diversifying utilities. We find that single-segment electric utilities over-invest compared to diversifying utilities, which explains their diversification premiums and implies that diversification can create value by opening up new investment opportunities. [source]

Anticipating Tax Changes: Evidence from the Finnish Corporate Income Tax Reform of 2005,

FISCAL STUDIES, Issue 2 2008
Seppo Kari
H25; H32 Abstract Using register-based panel data covering all Finnish firms from 1999 to 2004, we examine how corporations anticipated the 2005 dividend tax increase via changes in their dividend and investment policies. The Finnish capital and corporate income tax reform of 2005 creates a useful opportunity to measure this behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The estimation results reveal that those firms that anticipated a dividend tax hike increased their dividend payouts in a statistically significant way. This increase was not accompanied by a reduction in investment activities, but rather was associated with increased indebtedness in non-listed firms. The results also suggest that the timing of dividend distributions probably offsets much of the potential for increased dividend tax revenue following the reform. [source]

"Unsightly Huts": Shanties and the Divestment Movement of the 1980s

PEACE & CHANGE, Issue 3 2007
Bradford Martin
This article analyzes students' efforts to pressure American colleges and universities to divest their South African investments during the 1980s, focusing on the movement's most visible feature, the shantytowns students built to express solidarity with black South Africans and to oppose their institutions' investment policies. I argue that the shanties were constructed in spaces chosen to achieve maximum symbolic power and often succeeded in spatially transforming campuses into public forums that heightened students' capacity to affect the institutional decision-making process. Not surprisingly, the shanties evoked fervent responses. Shantytown residents identified with the plight of black South Africans under apartheid, while opponents called them "eyesores," and, as in the notorious case at Dartmouth, even forcibly destroyed them. When set against the conservative tenor of the Reagan/Bush 1980s, the varying responses to campus shantytowns, at both elite private institutions as well as large public ones, raise important questions about the cultural constructedness of "vision" and aesthetics and about the efficacy and the limits of using public space for symbolic oppositional politics. [source]

Urban-biased Policies and the Increasing Rural,Urban Expenditure Gap in Vietnam in the 1990s

ASIAN ECONOMIC JOURNAL, Issue 2 2010
Eric Fesselmeyer
O15; O18 There was a significant and widening rural,urban gap during the economic boom in Vietnam in the 1990s. Using an econometric decomposition, we find that differences in individual characteristics such as education, ethnicity and age are the primary explanation for this widening gap, whereas differences in the returns to these characteristics are the primary explanation for the increase in the gap at higher percentiles. We then argue that government investment policies and the manipulation of price incentives were important factors behind the gap. In particular, we argue that government policies created some benefit to urban dwellers at the expense of rural areas, lending support to Lipton's urban-bias hypothesis, which states that government, under strong political pressure from the urban population, directs resources from rural to urban areas without consideration of efficiency or equity. [source]

US Foreign Direct Investment in East Asia: Strategy and Policy Issues

ASIAN ECONOMIC POLICY REVIEW, Issue 2 2009
Mahani ZAINAL ABIDIN
F21; F23; F13; F15; L22 East Asian trade and investment policies have attracted US investment into the region, but these policies should be fine-tuned for the region to compete effectively for US investment inflow and increase their global share of US foreign direct investment. The changes should consider the needs of the US investors and East Asia's own economic development. Bilateral free trade agreements with the US are the likely channel for these changes, but the question is whether East Asia is ready for a comprehensive and deep liberalization. East Asia should work toward a regional investment policy framework to facilitate and expand the regional production network developed by the US foreign direct investment. [source]

The Puzzle of Financial Reporting and Corporate Short-Termism: A Universal Ownership Perspective

AUSTRALIAN ACCOUNTING REVIEW, Issue 4 2009
Michael E. Drew
This study considers the controversy surrounding financial reporting and corporate short-termism as a puzzle. The question remains as to why corporate managers and investors persist in exhibiting behaviours that trade off long-term value creation for meeting short-term financial targets. Using inter-temporal choice theory, the myopia characterising decision-making is entirely rational, given the set of incentives faced. This study views the puzzle through the prism of universal owners (pension and superannuation funds), arguing that the investment policies or ,mandates' implemented by these financial behemoths is the source of the myopic behaviour. The paper explores a range of policies that universal owners may consider implementing to ensure that the payoffs to corporate managers and investors are optimised through the pursuit of long-termism. [source]

Socially Responsible Investing and Climate Change: Contradictions and Challenges

AUSTRALIAN ACCOUNTING REVIEW, Issue 34 2004
Sandra Van Der Laan
This article explores the contradiction between the articulated investment policies, screening criteria or ethical charters of socially responsible investment funds and their actions demonstrated by their portfolio selection practice. The paper provides a background to socially responsible investment and Australia's contribution to greenhouse gas emissions. A discussion of renewable energy options lays the foundation for our main assertion: that this set of possible alternatives provides some new and more environmentally robust options that will better complement the underlying philosophy of funds in the socially responsible investment sector. [source]

Urban water management: optimal price and investment policy under climate variability,

AUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 2 2009
Neal Hughes
Australian urban water utilities face a significant challenge in designing appropriate demand management and supply augmentation policies in the presence of significant water scarcity and climate variability. This article considers the design of optimal demand management and supply augmentation policies for urban water. In particular, scarcity pricing is considered as a potential alternative to the predominant demand management policy of water restrictions. A stochastic dynamic programming model of an urban water market is developed based on data from the ACT region. Given a specification of the demand and supply for urban water state dependent optimal price and investment policies are estimated. The results illustrate how the optimal urban water price varies inversely with the prevailing storage level and how the optimal timing of investment differs significantly between rain dependent and rain independent augmentation options. [source]

Payout Policy Pedagogy: What Matters and Why

EUROPEAN FINANCIAL MANAGEMENT, Issue 1 2007
Harry DeAngelo
G35; G32; H25 Abstract This paper argues that we should abandonMM (1961)irrelevance as the foundation for teaching payout policy, and instead emphasise the need to distribute the full value generated by investment policy (,full payout'). Because MM's assumptions restrict payouts to an optimum, their irrelevance theorem does not provide the appropriate prescription for managerial behaviour. A simple example clarifies why the correct prescription is ,full payout', and why both payout and investment policy matter even absent agency costs (DeAngelo and DeAngelo, 2006). A simple life-cycle generalisation explains the main stylised facts about the payout policies of US and European firms. [source]

Economic and Legal Issues in Reducing the Eurosystem's Excess of International Reserves

JCMS: JOURNAL OF COMMON MARKET STUDIES, Issue 3 2004
Harald Badinger
Economic studies suggest that the Eurosystem's international reserves ($370 billion) could be reduced by up to half of its existing level. The article discusses the likely size and distribution of excess reserves and proposals for their uses. Small economic gains can be expected from a reserve reduction, as well as an elimination of incompatibilities and conflicts of interest between the conduct of monetary and investment policy. A careful and co-ordinated reserve reduction would pose no threat to financial stability, making it also admissible from a legal perspective against the background of Art. 31 of the ESCB (European System of Central Banks) Statute. Finally, transferring reserves as an extraordinary gain to the government does not constitute monetary financing as prohibited by Art. 101 EC Treaty. [source]

Investment in Human Capital in Team Members Who Are Involved in Collective Decision Making

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 3 2003
Ruth Ben-Yashar
This paper studies an investment policy which improves the ability of team members to decide correctly. We specify sufficient conditions on the learning function such that the best policy of investment in human capital is to invest first in the least competent person. Despite the fact that team members who are endowed with more human capital contribute more to the probability that the whole team would decide correctly, the liberal policy is still optimal under these conditions. Moreover, within the dichotomous model of collective decision-making, we show that these conditions are not so stringent. [source]