Morrissey: The Riddle of Shareholder Rights and Corporate Social Responsibility

ABSTRACT:

Shareholders own the entrepreneurial interests in corporations. As such, the law has historically held that they must be run primarily to generate profit for those investors. Progressives and some enlightened business leaders however have long claimed that this “shareholder primacy” rule is inadequate and urged that the larger needs of the community must also be a concern of business decision-makers. This corporate social responsibility movement (CSR) has gained legal traction during the last several decades with legislative initiatives like constituency statutes and the benefit corporation. In recent years reformers have advocated it even more forcefully as a solution to grave and growing public evils such as income inequality and environmental degradation.

Shareholders and their lawyers however continue to play indispensable roles in our economic system by policing corporate corruption and holding executives accountable to provide needed returns to their investors. The drive for corporate social responsibility therefore should not undercut shareholder rights but promote ever more creative ways that businesses can serve the triple bottom line of profits, people, and the planet.

 

Available for download here.

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Yi: Treasury Bills and Central Bank Bills for Monetary Policy

ABSTRACT:

This study investigates the extent of use of treasury bills and central bank bills as monetary policy instrument by level of development of countries, and problems caused from using two securities simultaneously. Very interestingly, it is observed that advanced countries tend to have either treasury bills or central bank bills while less advanced countries use both bills. Also the advanced countries are discovered to use more treasury bills than central bank bills. It is also found that employment of two securities leads to bond market segmentation, profit deterioration of central bank, and increase of government debt. Based on these problems caused by using two bills simultaneously, I suggest that central bank bills should be integrated into treasury bills in those countries in which two bills are used at the same time. As for the integration, I recommend that maturity of two bills need to be adjusted before long, resulting in short- and long-term for treasury securities and mid-term for central bank bills.

 

Available for download here.

Balbuena: State-Owned Enterprise Governance – A Stocktaking of Reforms and Challenges in Southern Africa

ABSTRACT:

This report is the first known stocktaking of its kind to provide a regional overview of state-owned enterprise (SOE) governance reforms and challenges across the Southern African Development Community (SADC) region. Part One summarises the challenges and governance practices related to state-ownership across SADC economies; it draws conclusions on how to address common regional priorities. Part Two of the report is organised around country profiles providing a fact-based assessment of SOE reform policies and practices in 14 economies. The report was prepared at the request of the Southern Africa Network on Governance of State-Owned Enterprises – a regional cooperation initiative aimed at improving the corporate governance of SOEs, and mainly covering the member economies of the SADC region. The stocktaking was prepared based on information self-reported by authorities in participating economies and supplemented by desk research.

 

Available for download here.

Aglietta: Sovereign Wealth Funds in the mutation of global finance

ABSTRACT:

Sovereign wealth funds (SWFs) started making the headlines in the midst of the global financial crisis. They were welcome neither by academics nor by politicians of Western countries. In a flurry of 2008 papers they were peremptory told what they should do and what they should and shouldn’t do.  The reasoning was flawed in two respects. First it equated SWFs to any other institutional investors. Second it advocated models of asset allocation based upon the efficient market hypothesis, while the global financial system was crumbling!

The present paper takes a radically different view. It shows precisely how SWF balance sheets are interconnected with the balance sheets of the public sector of the nation whose wealth they transfer over time. Therefore they are strategic actors by their very nature. Their objectives, which shape their asset liability management, participate to the long-run policy of their nation. Their business model is framed on the integration of their asset liability management into the national political framework.

Their governance cannot abstract from the broader environment, which has been upset by the transformation of the world economy. The financial crisis has invalidated the Wall Street paradigm of market finance, intermediated by global investment banks to finance long-term investment worldwide. The retrenchment of European banks in cross-border lending enhances the role of public finance in emerging market economies. Meanwhile the catching up process, which has been reaching more and more developing countries calls for huge amounts of real investments. It is why a regime shift in finance is under way, which gives prominence to public investors. The last part of the paper shows how public private collaboration is arranged in China to finance SMEs through private equity funds.

 

A very interesting analysis.  Available for download here.

Ajagbe and Ismail: The Roles of Government in the Commercialization of Technology Based Firms

ABSTRACT:

The Commercialization of Technology Based Firms (TBFs) have been acknowledged to play an increasingly significant role in economic development and has been regarded as an engine of growth that gingers rapid industrialization, generates revenue, wealth creation and employment generation. Many universities and other research institutes in Malaysia have established Technology Transfer Offices (TTO) to support the scientist in the bid to commercialize Research and Development (R & D) initiatives. This among others are the lessons learnt from the BayhDole Act which shows that increasing policy support from various government has motivated academic entrepreneurs to churn out spin off companies. The purpose of this research is to find out the roles of government in the commercialization of TBFs in Malaysia. In this research, 28 technology based firms and 19 venture capital firms were interviewed with the aid of a tape recorder and some through observation. Data was later transcribed and analyzed through content analysis, identified items coded and emerging themes sorted. Conclusions are drawn from the study findings and recommendations made.

 

Available for download here.

 

Kahyaogullari: Public-Private Partnerships in Developing and Developed Countries – The UK and Turkish Cases

ABSTRACT:

This study sets out to determine whether the process of adoption and implementation of PPP policy differs between developing and developed countries. Hence, by conducting an in-depth conceptual interrogation, first of all a template is formed to determine certain dissimilarities between developing and developed countries. Then using this template, Turkey, as a developing country, and the UK, as a developed country, is examined in order to set forth the relationship between the development level of a country and its PPP policy. The findings indicate that the PPP policy of developing and developed countries differs within five aspects: (i) how the policy penetrates into the political agenda, (ii) the government‟s aim in adopting PPP policy, (iii) the sectoral distribution, (iv) the form of PPP‟s and (v) the regulatory framework.

 

Available for download here.

Van den Bremer: The Elephant in the Ground – Managing Oil and Sovereign Wealth

ABSTRACT:

Many oil exporters accumulate large sovereign wealth funds, though their portfolio allocation does not take into account below-ground assets, like oil. Similarly, the above-ground portfolio does not affect the decision to extract oil. This paper shows that subsoil oil wealth should change a country’s above-ground asset allocation in two ways. First, the holding of all risky assets is leveraged because there is additional wealth outside the fund. Second, more (less) is invested in financial assets that are negatively (positively) correlated with oil to hedge against the riskiness of subsoil exposure. Furthermore, if marginal oil rents move pro-cyclically with the value of the financial assets in the fund, then oil will be extracted slower than predicted by the standard Hotelling rule. This leaves a buffer of oil to be extracted when both oil prices and asset returns are high. Finally, any unhedged residual volatility must be managed through additional precautionary saving.

 

Available for download here.

Gelb, Tordo & Halland (World Bank): Sovereign Wealth Funds and Domestic Investment in Resource-Rich Countries – Love Me, or Love Me Not?

ABSTRACT:

Sovereign wealth funds (SWFs) represent a large and growing pool of savings. An increasing number of these funds are owned by natural resource–exporting countries and have a variety of objectives, including intergenerational equity and macroeconomic stabilization. Traditionally, these funds have invested in external assets, especially securities traded in major markets. But the persistent infrastructure financing gap in developing countries has motivated some governments to encourage their SWFs to invest domestically. Is it appropriate to use SWFs to finance long-term development needs? Does it matter whether such investments are domestic or foreign-held assets? This note considers these issues, particularly the controversial question of using SWFs to finance domestic projects, motivated partly by SWFs’ perceived importance for development.

 

Available for download here.

Kim: A Public-Private Infrastructure Cooperative – A New Infrastructure Financing Paradigm

ABSTRACT:

A state-level public-private infrastructure cooperative (“iCoop”) is proposed as an effective means to finance public-private partnership (P3) transportation projects. iCoop is an independent state-level infrastructure bank dedicated to financing P3 projects and operated like a banking cooperative with guaranteed minimum returns to its investors. Its ownership is founded on public-private partnership and its initial capitalization draws upon the state’s noncapital contribution in the form of P3 participation guarantees, private capital contributions from local and global investors, and its own bank deposits. iCoop’s business model eliminates the state’s need for P3 “subsidies” due to toll-revenue shortfalls and converts them into additional debt capacity with returns for reinvestment. iCoop helps to lower the overall P3 financing costs and reduce perceived risks associated with greenfield construction financing. iCoop is also explicitly designed to mitigate key political risks underlying P3 projects. Through iCoop, the state can effectively increase its infrastructure debt capacity without jeopardizing its current debt limit and with no direct capital contributions. For global investors, iCoop provides a new vehicle to access a portfolio of infrastructure assets, thereby offering them the opportunity to further diversify their risks. iCoop gives a face to the much talked about infrastructure bank idea with sound business rationale and clear implementation strategy.

 

Available for download here.

Arnett: State Fiscal Condition – Ranking the 50 States

ABSTRACT:

State fiscal condition is multifaceted and difficult to measure. Using a method developed in previous research, I create the cash, budget, long-run, and service-level solvency indices using fiscal year 2012 data to measure the dimensions of fiscal condition. The five states with the highest-ranked overall fiscal condition are Alaska, South Dakota, North Dakota, Nebraska, and Wyoming. The five states with the lowest-ranked fiscal condition are New Jersey, Connecticut, Illinois, Massachusetts, and California. The top five states all had a surplus in fiscal year 2012 as measured by an increase in net assets, but there are differences in their underlying strengths. I find that the states with the worst fiscal condition have had years of poor financial management across the different dimensions of fiscal condition.

 

Available for download here.