Search

We develop a dynamic investment model with loan guarantees wherein insurers face information disadvantages and learn about borrower quality. Borrowers signal their qualities through investment timing, which is characterized by the investment threshold and elapsed time. We derive the conditions for separating or pooling equilibria. We show that the separating investment threshold is constant and determined mainly by the maximum threshold preventing mimicry. If project risk is higher (lower) than the market growth rate, the pooling investment threshold declines (increases) with elapsed time, and learning enhances (reduces) the willingness of high‐quality borrowers to wait. Learning alleviates adverse selection and reduces guarantee costs. These effects are more pronounced with a greater uncertainty of the insurer on borrower quality. We reveal dual effects of waiting. The worse the market prospect, the higher the value of waiting in pooling outcomes. Fee‐for‐guarantee swaps are superior to equity‐for‐guarantee swaps in environments with marked information asymmetry. [ABSTRACT FROM AUTHOR]

We have largely ignored serious organization issues blocking urban greenhouse gas emissions reductions. Most urban climate measures treat decision-making as a black box where sensible solutions are simply implemented. We need to re-examine decision-making assumptions about how city governments and businesses actually collaborate and whether current plans are credible. Significant constraints affect both groups and also limit citizens' abilities to effectively shape policies and investments. These problems can be addressed by creating a trusted, professional, independent organization to drive innovation and implementation to reduce emissions and moderate urban inequality. This "Lowering Emissions Economy Partnership (LEEP)" can be jointly owned by stakeholders who could pool investments and recover a share of the large resource savings this approach will create. Any city could do this drawing upon a range of start-up capital options. This reduces political and financial risks and it can accelerate emission reductions in a more just sustainable way. [ABSTRACT FROM AUTHOR]

SUMMARY: Crop photosynthesis (A) and productivity are often limited by a combination of nutrient stresses, such that changes in the availability of one nutrient may affect the availability of another nutrient, in turn influencing A. In this study, we examined the synergistic effects of phosphorus (P) and potassium (K) on leaf A in a nutrient amendment experiment, in which P and K were added individually or in combination to Brassica napus grown under P and K co‐limitation. The data revealed that the addition of P gradually removed the dominant limiting factor (i.e. the limited availability of P) and improved leaf A. Strikingly, the addition of K synergistically improved the overall uptake of P, mainly by boosting plant growth, and compensated for the physiological demand for P by prioritizing investment in metabolic pools of P (P‐containing metabolites and inorganic phosphate, Pi). The enlarged pool of metabolically active P was partially associated with the upregulation of Pi regeneration through release from triose phosphates rather than replacement of P‐containing lipids. This process mitigated P restrictions on A by maintaining the ATP/NADPH and NADPH/NADP+ ratios and increasing the content and activity of Rubisco. Our findings demonstrate that sufficient K increased Pi‐limited A by enhancing metabolic P fractions and Rubisco activity. Thus, ionic synergism may be exploited to mitigate nutrient‐limiting factors to improve crop productivity. Significance Statement: The uptake and utilization of phosphorus (P) and potassium (K) by Brassica napus were found to be closely linked and mutually influential. Notably, the results provide a physiological overview of the role of K in cellular P investment to mitigate Pi‐limited photosynthesis under P and K co‐limitation, which demonstrates the synergistic effects of K in enlarging the metabolic pool of P and ensuring the maintenance of photosynthesis. [ABSTRACT FROM AUTHOR]

Common pool resources often face overexploitation, but collective action can counteract that tendency. We investigate collective investment in reputation for produce food safety, a common pool resource because of limited branding and traceability, by U.S. commodity organizations. We use a unique dataset constructed with data from U.S. Department of Agriculture, Food and Drug Administration, Centers for Disease Control and Prevention, and industry to provide novel evidence on collective investment in common pool resources. Notably, only large shocks to reputation such as foodborne disease outbreaks resulting in hospitalization increase the likelihood of food safety guideline adoption. Adoption of food safety guidelines by government‐backed organizations results in improvements in some food safety outcomes. [ABSTRACT FROM AUTHOR]

A guarantee instrument is a credit enhancement tool that can enable philanthropies to unlock millions or billions of dollars for societal impact. The Community Investment Guarantee Pool, created in 2019 by a collaboration of philanthropies and allied impact investors, or guarantors, is a novel initiative that uses guarantees to leverage the balance sheets of foundations and other institutional investors for enhancing the credit of intermediaries in the affordable housing, small-business, and climate markets. This article describes the pool and shares early challenges and insights related to the underlying theory of change. The pool is using developmental evaluation and emergent learning to surface insights for philanthropic and other impact investors. [ABSTRACT FROM AUTHOR]

This paper investigates to which extent the Dutch feed-in premium scheme for on-shore wind projects has resulted in windfall profits during 2003-2018, a period in which the design of the scheme changed several times. Using Monte Carlo simulations, for 2003, 2009 and 2018, years that represent distinct scheme designs, we estimate the distributions of the required subsidy across virtually all potential on-shore wind projects, and compare them to the granted subsidies. We find that the average windfall profits of randomly drawn projects from the pool of potential investments have decreased over time, largely as a result of differentiating in the subsidy level among projects on the basis of the wind speed at the turbine's location. Despite these improvements, actual investments still experience substantial windfall profits, implying that investors successfully seek out projects that yield the highest windfall profits. Overall, the results imply that accounting for heterogeneity by differentiating in the subsidy level contributes to mitigating windfall profits. [ABSTRACT FROM AUTHOR]

Academic research on private equity (PE) has been concerned with the management of PE funds, the returns to investors from investments in PE relative to the returns available in public equity markets and, more predominantly, the analysis of the post‐investment performance of PE portfolio firms. There has been less research on how PE firms select their investments and the characteristics of their targeted firms. We derive hypotheses, from an agency perspective, on the firm‐level characteristics of PE‐targeted firms. Utilizing data on the population of private companies in the UK, we identify those firms that have received PE investment from the pool of potential investees within the population of private companies and known buyouts, and examine their pre‐investment characteristics. Using panel logit regression, we estimate multivariate models determining the probability of PE acquisition and examine the multivariate profiles of targeted firms in relation to our hypotheses on PE selection. [ABSTRACT FROM AUTHOR]

China has been spreading its tentacles across continents particularly sub-Saharan Africa and Nigeria. The objective of this paper is to investigate the influence of Foreign direct investment on the economic and political framework of Africa, using Nigerian as a case study. The foreign direct investments from China to Africa and particularly to Nigeria has not been received well in the pool of public opinion. However, the benefits the investment pool has on the economic and political framework is positive. Yet, researchers, believe that caution should be taken to avoid excessive FDI from China. The method of regression analysis was employed to prove the relationship between FDI inflow and annual GDP. The result showed that there is a strong and significant influence of FDI on GDP and vice versa. [ABSTRACT FROM AUTHOR]

A large body of empirical evidence suggests that altruistic punishment abounds in human societies. Based on such evidence, it is suggested that punishment serves an important role in promoting cooperation in humans and possibly other species. However, as punishment is costly, its evolution is subject to the same problem that it tries to address. To suppress this so-called second-order free-rider problem, known theoretical models on the evolution of punishment resort to one of the few established mechanisms for the evolution of cooperation. This leaves the question of whether altruistic punishment can evolve and give rise to the evolution of cooperation in the absence of such auxiliary cooperation-favoring mechanisms unaddressed. Here, by considering a population of individuals who play a public goods game, followed by a public punishing game, introduced here, we show that altruistic punishment indeed evolves and promotes cooperation in the absence of a cooperation-favoring mechanism. In our model, the punishment pool is considered a public resource whose resources are used for punishment. We show that the evolution of a punishing institution is facilitated when resources in the punishment pool, instead of being wasted, are used to reward punishers when there is nobody to punish. Besides, we show that higher returns to the public resource or punishment pool facilitate the evolution of prosocial instead of antisocial punishment. We also show that an optimal cost of investment in the punishment pool facilitates the evolution of prosocial punishment. Finally, our analysis shows that being close to a physical phase transition facilitates the evolution of altruistic punishment. [ABSTRACT FROM AUTHOR]

An opportunistic link between two mobile devices or nodes can be constructed when they are within each other’s communication range. Typically, cyber–physical environments consist of a number of mobile devices that are potentially able to establish opportunistic contacts and serve mobile applications in a cost-effective way. Opportunistic mobile service computing is a promising paradigm capable of utilizing the pervasive mobile computational resources around the users. Mobile users are thus allowed to exploit nearby mobile services to boost their computing capabilities without investment in their resource pool. Nevertheless, various challenges, especially its quality-of-service and reliability-aware scheduling, are yet to be addressed. Existing studies and related scheduling strategies consider mobile users to be fully stable and available. In this article, we propose a novel method for reliability-aware and deadline-constrained service composition over opportunistic networks. We leverage the Krill–Herd-based algorithm to yield a deadline-constrained, reliability-aware, and well-executable service composition schedule based on the estimation of completion time and reliability of schedule candidates. We carry out extensive case studies based on some well-known mobile service composition templates and a real-world opportunistic contact data set. The comparison results suggest that the proposed approach outperforms existing ones in terms of success rate and completion time of composed services. Note to Practitioners—Recently, the rapid development of mobile devices and mobile communication leads to the prosperity of mobile service computing. Services running on mobile devices within a limited range are allowed to be composed to coordinate through wireless communication technologies and perform complex tasks and business processes. Despite its great potential, mobile service compositions remains a challenge since the mobility of users and devices imposes high unpredictability on the execution of tasks. A careful investigation into existing methods has found their various limitations, e.g., assuming time-invariant availability of mobile services. This article presents a novel reliability-aware and deadline-constrained service composition method for mobile opportunistic networks. Instead of assuming time-invariant availability of mobile nodes, the proposed method is capable of estimating service availability at run-time and leveraging a Krill–Herd-based algorithm to yield the deadline-constrained, reliability-aware, and well-executable service composition schedules. Case studies based on well-known service composition templates and real-world data sets suggest that it outperforms traditional ones in terms of success and completion time of composed services. It can thus aid the design and optimization of composite services as well as their smooth execution in a mobile environment. It can help practitioners better manage the reliability and performance of real-world applications built upon mobile services. [ABSTRACT FROM AUTHOR]

It is typical in collectively administered pension funds that employees delegate fund managers to invest their contributions. In addition, many pension funds still need to sustain guarantees (prescribed by law) in spite of the current low interest environment. In this paper, we consider an optimal collective investment problem for a pool of investors who (implicitly) demand minimum guarantees by deriving utility from the wealth exceeding their guarantees in two financial market settings, one with a stochastic and one with a constant volatility. We find that individual investors' well-being will not be worsened through the collective investment in both financial markets, as individual optimal solutions are attainable if a financially fair state-dependent sharing rule is applied. When more prevailing sharing rules like linear rules are applied, this holds no longer. Furthermore, the degree of sub-optimality imposed by linear sharing rules is more pronounced in the stochastic volatility market than in the constant volatility market. [ABSTRACT FROM AUTHOR]

In this paper, we position the investor policy statement (IPS) as a central document in typical advisory relationships within the investment management industry. More specifically, we argue that an IPS not only serves as a behavioral control mechanism that protects the principal, but that it also protects the agent, as well as the profession. [ABSTRACT FROM AUTHOR]

Shareholders of a Regional Bell Operating Company (RBOC) tend to live in the area which it serves, and an RBOC's customers tend to hold its shares rather than other RBOCs' equity. The geographic bias of the RBOC investors is closely related to the general tendency of households' portfolios to be concentrated, of employees' tendency to own their employers' stocks in their retirement accounts, and to the home country bias in the international arena. Together, these phenomena provide compeling evidence that people invest in the familiar while often ignoring the principles of portfolio theory. [ABSTRACT FROM AUTHOR]

This article assesses and discusses pension fund developments in the U.S. as of September 1977, as viewed from the perspective of a professional investment manager. A pension fund can be broadly defined as a plan established and maintained by an employer primarily to provide for the systematic payment of benefits to employees after their retirement. There are four major factors which influence pension fund investment policies. First, all income and capital gain of pension fund investments are tax-exempt while in the hands of the trustee. Second, until recently, there have been no legal restrictions on pension fund investing other than the usual fiduciary principle that a trustee must deal at arm's length with the trust, making no personal profit from its operation other than the regular service fee. Third, the manager is usually relatively unhampered by liquidity considerations until a pension plan is quite old. Fourth, there is usually a strong incentive for the investment manager to try to maximize investment return and thereby reduce the employer's cost. Pension trustees has become increasingly aggressive in their investment policies with the passage of time. Twenty-five years ago, when the pension movement was in its infancy, safety dominated thinking in the field, and investments were confined largely to government bonds and Aaa-to-A rated corporate bonds. Slowly but steadily, it began to be recognized that pension trusts were ideally suited to undertake common stock investments because of the long-term nature of their liabilities and their slight liquidity needs.

Purpose - The purpose of this paper is to examine the impact of mandatory regulatory provisions on board structure and the influence of such board structure on institutional holdings. Design/methodology/approach - The study uses unique hand-collected data set of Indian IPOs during the 2004-2012 period after the corporate governance reforms with the introduction of clause 49 in the listing agreements in 2001. Using OLS regression, the paper empirically analyses the determinants of board size and board independence at the time of the IPOs and the influence of such a board structure on shareholdings by domestic and foreign institutional investors. Findings - The authors find that complying with mandatory regulatory provisions does not impede firms from structuring their boards to reflect the firms' advising and monitoring needs. The authors also find that complying with provisions have positive implication for the firm, as firms with greater board independence appear to attract more foreign institutional investors. Originality/value - To the authors' best knowledge, this is the first study to examine the issue in a regime where regulation mandates the composition of the board of directors. The paper also extends the literature on institutional holdings by providing evidence on the impact of board structure on institutional ownership at a critical time in a firm's life cycle when concerns for endogeneity for empirical investigations are weaker. [ABSTRACT FROM AUTHOR]

Private equity, which pools funds for investment in private businesses, is one of the largest and fastest growing investment opportunities in the markets today. Private equity traditionally sought investments exclusively from sophisticated investors such as high net worth individuals and institutional investors. More recently, however, a growing number of private equity businesses have gone public and opened their doors to public investors, who are drawn to these investments because of the possibility of high returns and the opportunity to diversify their investment portfolios. In this Article, I review the universe of public- private equity (or PPE) businesses that are traded on the United States stock exchanges to map out how PPE has engaged with public investors. I find that PPE takes a variety of organizational forms, across different jurisdictions, and seeks investments from public investors at multiple levels within the private equity structure. While this variety expands the menu of options available to public investors, ignoring the fact that there are distinct types within the PPE universe can also be the source of investor and regulatory confusion. In this Article, I organize the PPE universe into three types according to whether the public investor is investing in the private equity adviser, fund, or both. This typology catalogs a complex and heterogeneous universe of firms that are sometimes lumped together as one to provide a deeper understanding of the unique structural and governance features of each type of PPE. And, by taking a segmented view of the company, fund, and securities regulatory regimes which apply, this Article takes the first step towards constructing a clear framework through which to understand and regulate PPE. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to empirically analyze the effects of stock price synchronicity and herding behavior of qualified foreign institutional investors (QFII) on stock price crash risk, especially the mediating effect of herding behavior of QFII on the relation of stock price synchronicity and stock price crash risk. Design/methodology/approach – Taking China’s A-share listed companies from 2005 to 2014 and QFII holding shares data as the research sample, this study calculates herding effect index, sock price synchronicity index and stock price crash risk index, and perform linear regression. Findings – This study concludes that, either herding behavior of QFII or the stock price synchronicity can increase the stock price crash risk. Further study reveals that, the herding behavior of QFII also improves the effect of stock price synchronicity on stock price crash risk. Namely, herding behavior of QFII acts as the mediating role between stock price synchronicity and stock price crash risk. Originality/value – This study empirically analyzes and verifies the mediating roles of herding behavior of QFII in affecting the relation of sock price synchronicity and stock price crash risk for the first time. The findings of this study contribute to the study of the role of QFII in stabilizing Chinese security market. [ABSTRACT FROM AUTHOR]

The article focuses on a study where simplified strategies are demonstrated to use fast moving alphas to make timing decision of equity portfolios better on the basis of slow alpha signals in institutional investments.

The objective of this paper is to analyze criteria for portfolio choice when two investors are forced to invest in a common portfolio and share the proceeds by a linear sharing rule. A similar situation with many investors is typical for defined contribution pension schemes. The restriction implies two sources of suboptimal investment decisions as seen from each of the two investors individually. One is the suboptimal choice of portfolio, the other is the forced linear sharing rule. We measure the combined consequence for each investor by their respective loss in wealth equivalent. We show that significant losses can arise when investors are diverse in their risk attitude. We also show that an investor with a low degree of risk aversion, like the logarithmic or the square root investor, often applied in portfolio choice models, can either inflict or be subject to severe losses when being forced to participate in such a common investment pool. [ABSTRACT FROM AUTHOR]