The Determinants Of Cross-Border Equity Flows

We apply a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96. The remarkably good results have strong implications for theories of asset trade. We find that the geography of information heavily determines the pattern of international transactions. Our model integrates elements of the finance literature on portfolio composition and the international macroeconomics and asset trade literature. Gross asset flows depend on market size in both source and destination country as well as trading costs, in which both information and the transaction technology play a role. The resulting augmented 'gravity' equation has equity market capitalisation representing market size and distance proxying some informational asymmetries, as well as a variable representing openness of each economy. But other variables explicitly represent information transmission (telephone call traffic and multinational bank branches), an information asymmetry between domestic and foreign investors (degree of insider trading), and the efficiency of transactions ('financial market sophistication'). This equation accounts for almost 70% of the variance of the transaction flows. Dummy variables (adjacency, language, currency or trade bloc, and a 'major financial centre' effect) do not improve the results, nor does a variable representing destination country stock market returns. The key role of informational asymmetries is confirmed. Our information transmission variables also substantially improve standard gravity equations for trade in goods.Equity flows, cross-border portfolio investment, information asymmetries, gravity model

"Aggregation Bias" DOES explain the PPP puzzle

This article summarizes our views on the role of an "aggregation bias" in explaining the PPP Puzzle, in response to the several papers recently written in reaction to our initial contribution. We discuss in particular the criticisms of Imbs, Mumtaz, Ravn and Rey (2002) presented in Chen and Engel (2005). We show that their contentions are based on: (i) analytical counter-examples which are not empirically relevant; (ii) simulation results minimizing the extent of "aggregation bias"; (iii) unfounded claims on the impact of measurement errors on our results; and (iv) problematic implementation of small-sample bias corrections. We conclude, as in our original paper, that "aggregation bias" goes a long way towards explaining the PPP puzzle

Multiphoton inner-shell ionization of the carbon atom

We apply time-dependent R-matrix theory to study inner-shell ionization of C atoms in ultra-short high-frequency light fields with a photon energy between 170 and 245 eV. At an intensity of 10$^{17}$ W/cm$^2$, ionization is dominated by single-photon emission of a $2\ell$ electron, with two-photon emission of a 1s electron accounting for about 2-3\% of all emission processes, and two-photon emission of $2\ell$ contributing about 0.5-1\%. Three-photon emission of a 1s electron is estimated to contribute about 0.01-0.03\%. Around a photon energy of 225 eV, two-photon emission of a 1s electron, leaving C$^+$ in either 1s2s2p$^3$ or 1s2p$^4$ is resonantly enhanced by intermediate 1s2s$^2$2p$^3$ states. The results demonstrate the capability of time-dependent R-matrix theory to describe inner-shell ionization processes including rearrangement of the outer electrons.Comment: 7 pages, 2 figures, 2 table

Angular distributions in two-colour two-photon ionization of He

We present R-Matrix with time dependence (RMT) calculations for the photoionization of helium irradiated by an EUV laser pulse and an overlapping IR pulse with an emphasis on the anisotropy parameters of the sidebands generated by the dressing laser field. We investigate how these parameters depend on the amount of atomic structure included in the theoretical model for two-photon ionization. To verify the accuracy of the RMT approach, our theoretical results are compared with experiment.Comment: 8 pages, 4 figures, 1 tabl

Electron dynamics in the carbon atom induced by spin-orbit interaction

We use R-Matrix theory with Time dependence (RMT) to investigate multiphoton ionization of ground-state atomic carbon with initial orbital magnetic quantum number $M_L$=0 and $M_L$=1 at a laser wavelength of 390 nm and peak intensity of 10$^{14}$ W cm$^{-2}$. Significant differences in ionization yield and ejected-electron momentum distribution are observed between the two values for $M_L$. We use our theoretical results to model how the spin-orbit interaction affects electron emission along the laser polarization axis. Under the assumption that an initial C atom is prepared at zero time delay with $M_L=0$, the dynamics with respect to time delay of an ionizing probe pulse modelled using RMT theory is found to be in good agreement with available experimental data.Comment: 8 pages, 5 figure

Financial Super-Markets: Size Matters for Asset Trade

The paper presents a two-country macroeconomic model in which the number of financial assets is endogenous. Imperfect substitutability of assets and international transaction costs give a comparative advantage to large markets, because of demand effects. Agents have more incentives to undertake risky investments on those markets; they can also diversify risk at a lower cost. Prices of financial assets are higher in the large area because asset markets are broader. We also analyse the impact of domestic transaction costs and issuing costs on financial markets and returns. Our theory has important implications for the pattern of international trade in risky assets.International macroeconomics, asset trade, transaction costs, incomplete markets

Enterprises in Transition: Macroeconomic Influences on Enterprise Decision-Making and Performance

This paper analyses the theoretical arguments and empirical evidence linking enterprise performance in transition economies to the macroeconomic environment. Macroeconomic instability is traced to the unsustainability of the fiscal-financial and monetary programmes of the state and to regulatory and other failures leading to problems with the solvency of financial institutions. The importance of macroeconomic stability for enterprise performance is documented with a simulation study and by reviewing relevant microeconomic and aggregate empirical evidence from across the world, as well as from the transition economies themselves. Conclusions are reached about the speed of transition, about the synergy between macroeconomic stabilisation and market development and about the creation of institutions for achieving and maintaining macroeconomic stability.

Financial Super-Markets: Size Matters for Asset Trade

This paper presents a new theoretical framework to analyze=20 financial markets in an international context. We build a two-country=20 macroeconomic model in which agents are risk averse, assets are imperfect=20 substitutes, the number of financial assets is endogenous, and cross-border= =20 asset trade entails transaction costs. We show that demand effects have=20 important implications for the link between market size, asset prices and=20 financial market development. These effects are consistent with the=20 existing empirical evidence. Due to co-ordination failures, the extent of=20 financial market incompleteness is inefficiently high. We also analyze the= =20 impact of domestic transaction costs and issuing costs on financial markets= =20 and returns.

Le thon : enjeux et stratégies pour l'océan Indien

Cette communication tente d'effectuer un bilan des Dispositifs de concentration de poissons (DCP) dans les pays de l'Association thonière, en envisageant ces dispositifs comme une innovation susceptible de modifier profondément la dynamique des systèmes halieutiques dans lesquels ils sont introduits. Après un bilan des réalisations, l'analyse est axée sur les processus d'évolution et de transformation qu'impliquent les DCP. Ceux-ci sont étudiés par rapport à leurs particularités concernant l'usage de la ressource, aux spécificités des tactiques de pêche et à l'adaptation des modes de régulation nécessitée du fait des conflits d'"appropriation" qu'ils peuvent entraîner. Ces transformations sont analysées en mettant l'accent non seulement sur les résultats mais aussi sur les facteurs déterminants du processus de changement. (Résumé d'auteur

The Determinants of Cross-Border Equity Flows: The Geography of=20 Information

We apply a new approach to a new panel data set on bilateral=20 gross cross-border equity flows between 14 countries, 1989- 96. The model=20 integrates elements of the finance literature on portfolio composition and= =20 the international macroeconomics and asset trade literature. Gross asset=20 flows depend on market size in both source and destination country as well= =20 as trading costs, in which both information and the transaction technology= =20 play a role. Distance proxies some information costs, and other variables=20 explicitly represent information transmission, an information asymmetry=20 between domestic and foreign investors, and the efficiency of transactions.= =20 The remarkably good results have strong implications for theories of asset= =20 trade. We find that the geography of information is the main determinant of= =20 the pattern of international transactions, while there is little support in= =20 our data for diversification and =91return-chasing=92 motives for= transactions.