Economic Reforms and Constitutional Transition

This paper investigates the relationship between economic reforms and constitutional transition, which has been neglected by many transition economists. It is argued that assessment of reform performance might be very misleading if it is not recognized that economic reforms are just a small part of large scale of constitutional transition. Rivalry and competition between states and between political forces within each country are the driving forces for constitutional transition. We use Russia as an example of economic reforms associated with constitutional transition and China as an example of economic reforms in the absence of constitutional transition to examine features and problems in the two patterns of transition. It is concluded that under political monopoly of the ruling party, economic transition will be hijacked by state opportunism. Dual track approach to economic transition may generate very high long-term cost of constitutional transition that might well outweigh its short-term benefit of buying out the vested interests.constitutional transition, economic reform, division of labor, debate of shock therapy vs gradualism, debate of convergence vs institutional innovation

Shanghai Stock Exchange Composite Index and Bank Stock Prices in China: A Causality Analysis

This paper analyzes empirically the relationship between the Shanghai Stock Exchange (SSE) Composite Index and the indexes of 10 Chinese listed banks to test whether the listing of these banks had played a role in leading the Chinese stock market. Using daily prices from 1 June 2006 to 15 November 2007, we applied the Granger causality test and found that a uni-directional causality relationship existed either way between most bank stock prices and the market index while the bi-directional relationship only identified among five of the ten banks. This research finding is in part consistent with previous studies showing that stock markets in great China region are integrated and are strongly influenced by the psychological factors of investors. In the following co-integration test, both AEG and Johansen’s methods concluded a long-run stable equilibrium relationship between majority of the banking stock prices and the SSE Composite Index.Shanghai Stock Exchange, VAR, Johansen co-integration tests, Granger causality tests

Equilibrium Wage Arrears: A theoretical and empirical analysis of institutional lock-in

We present a model of managerial choice of wage delays that implies a possibility of multiple equilibria in the level of arrears. Positive feedback arises because each employer's wage arrears choice has externalities for other employers by affecting worker quit, effort and protest behavior and the probability of legal penalties. We study the case of three equilibria, distinguishing two that are stable - the "punctual payment equilibrium" and the "late payment equilibrium" - and one unstable "critical mass equilibrium," a threshold of arrears in the local labor market beyond which even profitable firms may adopt the practice. Our econometric analysis of linked employer-employee data for Russia provides evidence that workers' responses to wage delays are attenuated by local labor market arrears, that the wage arrears reaction function exhibits positive feedback, and that the theoretical conditions for multiple equilibria under symmetric local labor market competition are satisfied empirically in 1995 and 1998. Simulation results imply clustering of regions around two stable levels of arrears, with the late payment equilibrium characterized by six months overdue wages for a typical worker in 1995 and nine months in 1998.http://deepblue.lib.umich.edu/bitstream/2027.42/39705/2/wp321.pd

Financing Healthcare Services for the Poor

This paper was written as part of Shujog Research's Financial Innovation for Poverty Reduction Series. It studies the challenges and gaps in the funding of healthcare provision in Asia, and evaluates several innovative financing solutions that can help countries achieve the goal of universal access to healthcare

Market Feedback And Managers’ Decisions In Private Placement – Evidence From Chinese Family Firms

What effect does market feedback have on managers’ decisions on private placement in family firms? Based on information asymmetry, agency theory, and corporate governance theory, we investigate the relationship between managers’ final decisions and market feedback to the announcement. We find that managers in family firms accept market feedback in decision-making and their attitude can be affected by many external factors. Managers tend to listen to the market when family firms are non-high-tech, when family members participate in purchasing the placed shares, when family members serve as managers, and when separation of control rights from ownership is small

Ethics and taxation : a cross-national comparison of UK and Turkish firms

This paper investigates responses to tax related ethical issues facing busines

The Performance and Long-Run Characteristics of the Chinese IPO Market

We study the short-run and long-run performance of Chinese privatization initial public offerings (PIPOs), using data for 340 and 409 new issues on the Shanghai and Shenzhen Stock Exchanges respectively, from 1 January 1996 through 31 December 1997. The average market-adjusted initial return is found to be 127.31%, and the initial returns on both stock exchanges are not significantly different from each other. The average market-adjusted buy and hold return over the three years after listing is 10.26%, which is significantly different from zero at the 1% level. We then use cross-sectional analysis to explain the long-run supernormal performance of Chinese PIPOs, and find that government ownership, the offering size and the feature of belonging to a high-tech industry are the main determinants of the long-run performance. In addition, firms that perform better in the long-run tend to make more Seasoned Equity Offerings (SEOs), and the underpricing of IPOs is negatively related to their long-run performance.IPO; underpricing; long-run performance; government ownership; offering size; high tech industry; China

Unburnable Carbon 2013: Wasted Capital and Stranded Assets

This report examines CO2 budgets and the growing 'carbon bubble', as well as its effects on the economy and global warming. It includes chapters on the global CO2 budget, global listed coal oil and gas reserves and resources, evolving the regulation of markets for climate risk, implications for equity valuation and credit ratings, implications for investors, and suggestions for navigating the road ahead

Equilibrium Wage Arrears: Institutional Lock-In of Contractual Failure in Russia

We present a model of managerial choice of wage delays that implies a possibility of multiple equilibria in the level of arrears. Positive feedback arises because each employer's wage arrears choice has externalities for other employers by affecting worker quit, effort and protest behavior and the probability of legal penalties. We study the case of three equilibria, distinguishing two that are stable - the "punctual payment equilibrium" and the "late payment equilibrium" - and one unstable "critical mass equilibrium," a threshold of arrears in the local labor market beyond which even profitable firms may adopt the practice. Our econometric analysis of linked employer-employee data for Russia provides evidence that workers' responses to wage delays are attenuated by local labor market arrears, that the wage arrears reaction function exhibits positive feedback, and that the theoretical conditions for multiple equilibria under symmetric local labor market competition are satisfied empirically in 1995 and 1998. Simulation results imply clustering of regions around two stable levels of arrears, with the late payment equilibrium characterized by six months overdue wages for a typical worker in 1995 and nine months in 1998.