A Sovereign’s Cost of Capital: Go Foreign or Stay Local

A critical question faced by any sovereign seeking to raise funds in the bond market is whether to issue the debt under foreign or local parameters. This choice determines other key characteristics of any bond issue such as which banks, lawyers, and investors will be involved. Most important though, this decision involves a tradeoff between the sovereign retaining discretion in managing the issue and relinquishing control of the issue to third parties to prevent the sovereign from expropriating wealth from bondholders in the future. Based on a sample of 17,349 issuances by 117 sovereigns between 1990 and 2015, we investigate this question in the context of the initial pricing of government bonds. We examine the three key factors that bear on this decision; governing law, currency, and exchange listing. We find that highly-rated sovereigns, with strong domestic institutions that protect investors, almost always issue debt under domestic parameters. In contrast, low-rated sovereigns with weak domestic institutions tend to issue debt under foreign parameters. These findings suggest that low-quality sovereigns are forced to issue debt under foreign parameters to assure investors that the sovereign will not act opportunistically to expropriate their wealth once the debt is issued. Put differently, low-quality sovereigns that issue debt under domestic parameters face a higher cost of capital

Waiting for... the Debutant Director

The present study aims to discuss a series of problems identified over time in Romanian directing education, with an emphasis on the Theatre Faculty of Iași where the author has been teaching for many years. In the second part of the paper, I publish the results of a questionnaire that I did, on the occasion of this research, among the best graduates of the last five years of the Department of Directing at the Faculty of Theatre Iasi

Biodegradable Interchangeable Operation (BIO) Blaster

The B.I.O. Blaster team set out to use the two-semester course of Senior Design Capstone to create a new concept that combined the draw of recreational play with incentives to help remove waste from chores, all while being environmentally sustainable and responsible. Specifically, the B.I.O. Blaster is a toy blaster that uses leaves, grass, and snow as ammunition. These three materials are common by-products from chores during all seasons of the year, which makes this product constantly relevant. This blaster will utilize a dual-belt conveyor launching mechanism to propel the ammunition out of the blaster. Unlike the competition, no extra ammunition will need to be purchased by the end consumer which adds value to the product. A trigger mechanism will allow the user to modulate the firing mode depending on how long they hold their finger on the trigger. The first semester focused on the research needed to develop the idea, and to make sure that certain aspects of the B.I.O. Blaster will be able to be patented. The main objective of this semester was to create a physical proof of concept model, and the team succeeded in creating this model and showed that five design specifications were met. The second semester focused on building, testing, and redesigning the product to meet our specifications. The main aspect of this blaster, the dual-belt conveyor launching mechanism, was intensely studies and iterated upon, as this is the component that will be submitted for patent review. Through the design process, the team successfully conducted research on other patents in the area of toy guns and blasters, as well as literature searches to learn more about the subject. Then, the team used management skills to develop fluid teamwork to ensure all objectives were met and that all assignments were completed on time. Design specifications were also created to act as a guide for the project, and expressed numerical targets that the team had to reach in order for the project to move forward. Through the conceptual design phase, each team member (3) created 30 design concepts (90) for a certain design aspect of the B.I.O. Blaster. The best concept solution of each design aspect was chosen and put together to create the final full concept. A competitive analysis of the concept was then conducted against the major products in competition with this project. The final concept was then built and testes, and then redesigned. Engineering and financial analyses were conducted to figure out the design and monetary details of the project, respectively. The engineering criteria, design specifications, and customer requirements were then all taken into account when creating the product. Hopefully, a new Capstone team will take on this project in the next semester to further work on and develop the dual- belt system, more forms of ammunition to test, along with fine-tuning the operation, and trying to integrate ammunition production into the B.I.O. Blaster

Collective Action Clauses for the Eurozone

One of the primary policy initiatives instituted in response to the Eurozone sovereign debt crisis is a requirement that all Eurozone sovereign bonds issued after January 1 2013 include provisions referred to as Collective Action Clauses or CACs. These CACs allow for a super-majority of creditors to impose restructuring terms on minority holdouts. This article assesses the likely effect of this proposal on the borrowing costs of sovereign debtors. Contrary to much of the literature, we find that the presence of CACs leads to a lower cost of capital, especially for below-investment grade bond

Student and faculty views of plus-minus grading systems: Working paper series--07-11

Plus-minus grading systems and other systems that increase the grading options beyond the whole-letter system of A, B, C, D, and F are now in wide use. However, a number of schools continue to use the traditional whole-letter system and changes in grading systems arouse strong emotions which can make implementation of a new system difficult or, in some cases impossible. This study first presents a review of the prevalence of alternative grading systems based upon examination of online catalogs. Then a survey of faculty and student opinions about implementation of a plus-minus grading system at a school currently using the whole-letter grading system is presented as well as a discussion of the motivation underlying these opinions. Because this study presents a thorough discussion of the comparative advantages and disadvantages of plus-minus grading systems to constituent groups, it should be of interest to faculty and policy makers at schools contemplating a change in their grading systems

Dislocation refuted?

When professors Weber and Marres asked me to contribute to the Liber Amicorum of professor Wattel I of course was very happy and willing to prepare a contribution. There are a number of scholars whose academic work have been a source of inspiration for me and truly contributed to the development of my thinking, during the formative phase of my doctorate research for example and afterwards, and to this day. Wattel’s work is one of the significant examples and I feel honoured to be allowed to now contribute to the Liber.Wattel's intellectual creativity and academic independence have been an inspiration. The same holds for Wattel’s search for a system, for consistency, in Terra/Wattel’s handbook ‘European Tax Law’ for example, and for years that is, not only in the current edition but in the earlier editions as well. A notable example of this, I think, is the line of thought in his book on the incomparability of domestic and cross-border scenarios, if and to the extent that the Member State concerned does not exercise tax jurisdiction in relation to the taxpayer’s foreign activities involved. And that line, very interesting, is now reflected in the recent Timac Agro-inspired Opinion of Advocate General Collins in W AG (Case C-538/20). And that line, also interesting, seems at odds with what we saw earlier in, for example, Bosal, Marks & Spencer, Lidl, Renneberg, Bevola and all those other cases where the Court judged domestic and cross-border scenarios to be comparable in such cases. Wattel’s underlying thinking here, I think, is that of the notion of ‘dislocation’, one of the concepts he developed and added to the discourse. It is this dislocation to which I would like to devote my contribution