From World Factory to World Investor: The New Way of China Integrating into the World
Bijun Wang, Xiang Li
China Economic Journal,
Nr. 2,
2017
Abstract
This paper argues that outward direct investment (ODI) is replacing international trade as the new way China integrates into the world. Based on two complementary datasets, we document the pattern of Chinese ODI. We argue that the rapid growth of China’s ODI is the result of strong economic development, increasing domestic constraints, and supportive government policies. Compared with trade integration, investment integration involves China more deeply in global business. As a new global investor, China’s ODI in the future is full of opportunities, risks, and challenges. The Chinese government should improve bureaucracy coordination and participate more in designing and maintaining international rules to protect ODI interests.
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The Political Determinants of Government Bond Holdings
Stefan Eichler, Timo Plaga
Journal of International Money and Finance,
Nr. 5,
2017
Abstract
This paper analyzes the link between political factors and sovereign bond holdings of US investors in 60 countries over the 2003–2013 period. We find that, in general, US investors hold more bonds in countries with few political constraints on the government. Moreover, US investors respond to increased uncertainty around major elections by reducing government bond holdings. These effects are particularly significant in democratic regimes and countries with sound institutions, which enable effective implementation of fiscal consolidation measures or economic reforms. In countries characterized by high current default risk or a sovereign default history, US investors show a tendency towards favoring higher political constraints as this makes sovereign default more difficult for the government. Political instability, characterized by the fluctuation in political veto players, reduces US investment in government bonds. This effect is more pronounced in countries with low sovereign solvency.
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Enabling the Wisdom of the Crowd: Transparency in Peer-to-Peer Finance
Oliver Rehbein, Michael Koetter
G20 Insights Policy Brief, Policy Area "Financial Resilience",
2017
Abstract
The rapid growth exhibited by peer-to-peer finance markets raises hopes that especially young ventures might obtain better access to funding. Yet, consumer protection concerns are looming as borrowers and projects requesting finance from the crowd are inherently opaque. We suggest clear rules to enable peer-to-peer lenders and investors to more effectively screen projects. We plea for strengthening self-responsibility of the investor crowd by clearly assigning, and limiting the responsibilities of regulatory authorities and recognizing the regulatory difference between new peer-to-peer, and traditional financial markets. As a result the peer-to-peer market can develop to more effectively complement traditional sources of finance, instead of turning into a funding source for bad investment projects looking to exploit uninformed lenders and investors.
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Tail-risk Protection Trading Strategies
Natalie Packham, Jochen Papenbrock, Peter Schwendner, Fabian Wöbbeking
Quantitative Finance,
Nr. 5,
2017
Abstract
Starting from well-known empirical stylized facts of financial time series, we develop dynamic portfolio protection trading strategies based on econometric methods. As a criterion for riskiness, we consider the evolution of the value-at-risk spread from a GARCH model with normal innovations relative to a GARCH model with generalized innovations. These generalized innovations may for example follow a Student t, a generalized hyperbolic, an alpha-stable or a Generalized Pareto distribution (GPD). Our results indicate that the GPD distribution provides the strongest signals for avoiding tail risks. This is not surprising as the GPD distribution arises as a limit of tail behaviour in extreme value theory and therefore is especially suited to deal with tail risks. Out-of-sample backtests on 11 years of DAX futures data, indicate that the dynamic tail-risk protection strategy effectively reduces the tail risk while outperforming traditional portfolio protection strategies. The results are further validated by calculating the statistical significance of the results obtained using bootstrap methods. A number of robustness tests including application to other assets further underline the effectiveness of the strategy. Finally, by empirically testing for second-order stochastic dominance, we find that risk averse investors would be willing to pay a positive premium to move from a static buy-and-hold investment in the DAX future to the tail-risk protection strategy.
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Attracting Early-Stage Investors: Evidence From a Randomized Field Experiment
Shai B. Bernstein, Arthur Korteweg, Kevin Laws
Journal of Finance,
Nr. 2,
2017
Abstract
This paper uses a randomized field experiment to identify which start-up characteristics are most important to investors in early-stage firms. The experiment randomizes investors? information sets of fund-raising start-ups. The average investor responds strongly to information about the founding team, but not to firm traction or existing lead investors. We provide evidence that the team is not merely a signal of quality, and that investing based on team information is a rational strategy. Together, our results indicate that information about human assets is causally important for the funding of early-stage firms and hence for entrepreneurial success.
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Mind the Gap: The Difference Between U.S. and European Loan Rates
Tobias Berg, Anthony Saunders, Sascha Steffen, Daniel Streitz
Review of Financial Studies,
Nr. 3,
2017
Abstract
We analyze pricing differences between U.S. and European syndicated loans over the 1992–2014 period. We explicitly distinguish credit lines from term loans. For credit lines, U.S. borrowers pay significantly higher spreads, but lower fees, resulting in similar total costs of borrowing in both markets. Credit line usage is more cyclical in the United States, which provides a rationale for the pricing structure difference. For term loans, we analyze the channels of the cross-country loan price differential and document the importance of: the composition of term loan borrowers and the loan supply by institutional investors and foreign banks.
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04.01.2017 • 2/2017
Eurostaaten von amerikanischen Ratingagenturen schlechter bewertet – Einführung einer europäischen Agentur dennoch nicht zielführend
Während der Schuldenkrise bewerteten amerikanische Ratingagenturen einige Eurostaaten signifikant schlechter als die eher europaorientierte Agentur Fitch. Das zeigt eine neue Studie des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH). Damit bestätigen die Ökonomen und Ökonominnen zwar zum Teil, was viele Politiker und Politikerinnen bereits während der Krise behaupteten: dass nämlich die Ratings der amerikanischen Agenturen eine antieuropäische Tendenz aufweisen. Andererseits macht die Studie aber auch deutlich, dass und warum eine europäische Ratingagentur trotzdem unwirksam wäre.
Reint E. Gropp
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European versus Anglo-Saxon Credit View: Evidence from the Eurozone Sovereign Debt Crisis
Marc Altdörfer, Carlos A. De las Salas Vega, Andre Guettler, Gunter Löffler
Abstract
We analyse whether different levels of country ties to Europe among the rating agencies Moody’s, S&P, and Fitch affect the assignment of sovereign credit ratings, using the Eurozone sovereign debt crisis of 2009-2012 as a natural laboratory. We find that Fitch, the rating agency among the “Big Three” with significantly stronger ties to Europe compared to its two more US-tied peers, assigned on average more favourable ratings to Eurozone issuers during the crisis. However, Fitch’s better ratings for Eurozone issuers seem to be neglected by investors as they rather follow the rating actions of Moody’s and S&P. Our results thus doubt the often proposed need for an independent European credit rating agency.
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13.12.2016 • 49/2016
Investitionen in Köpfe stärker in den Fokus rücken – Stellungnahme zu den Neuregelungsplänen der GRW-Förderung in Sachsen-Anhalt
Die wirtschaftliche Lücke zu den westdeutschen Ländern kann in Sachsen-Anhalt nur verringert werden, wenn die Förderstrategie von Sachkapitalinvestitionen auf Investitionen in Köpfe umschwenkt. Für mehr Effizienz kommt es nun auf Innovationen an – und diese hängen vor allem von der Kreativität und der Qualifikation der Menschen im Land ab.
Mirko Titze
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Im Fokus: Industrielle Kerne in Ostdeutschland und wie es dort heute aussieht – Das Beispiel der JENOPTIK AG
Gerhard Heimpold
Wirtschaft im Wandel,
Nr. 5,
2016
Abstract
Der Wirtschaftsstandort Jena in Thüringen wurde in der DDR durch den Stammbetrieb des Kombinats VEB Carl Zeiss Jena dominiert, der optische Erzeugnisse und Präzisionsgeräte herstellte. In den letzten Jahren der DDR beauflagten die zentralen Planungsinstanzen der DDR das Kombinat auch mit der Herstellung von Ausrüstungen für die Herstellung mikroelektronischer Erzeugnisse. Nach dem Übergang zu marktwirtschaftlichen Verhältnissen wurde die klassische optische Produktion im Zuge der Privatisierung an die westdeutsche Schwester des Jenaer Kombinats, die Firma Carl Zeiss in Oberkochen veräußert. Der andere Teil des Carl-Zeiss-Stammbetriebs firmierte als Jenoptik GmbH, ging in das Eigentum des Freistaats Thüringen über, wurde erfolgreich umstrukturiert und ist als JENOPTIK AG seit 1998 börsennotiert. Wichtig erscheint in der Retrospektive der Ansatz der Jenoptik GmbH und ihrer Führung, durch Ausgründungen und Attrahierung neuer Investoren eine vorteilhafte Ballung technologieintensiver Unternehmen am Standort Jena zu erreichen. Umgekehrt haben die Standortvorteile Jenas mit seinen leistungsfähigen Wissenschaftseinrichtungen die erfolgreiche JENOPTIK-Entwicklung begünstigt.
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