The rate of return on equity across industrial sectors on the British stock market, 1825-70

This article assesses the contribution of the various industrial sectors to the growth of the British equity market in the 1825–70 period. It also provides estimates of the rates of return on these industrial sectors in this period. The article then proceeds to examine whether differences in rates of return across the various sectors can be explained by risk or other financial factors. One of the main findings is that the relatively high rates of return in the banking, insurance, and miscellaneous sectors appear to be in some measure explained by the presence of extended liability and uncalled capital.

The Cost of Sustainability Capital and the Creation of Sustainable Value by Companies

We develop and apply a valuation methodology to calculate the cost of sustainability capital, and, eventually, sustainable value creation of companies. Sustainable development posits that decisions must take into account all forms of capital rather than just economic capital. We develop a methodology that allows calculation of the costs that are associated with the use of different forms of capital. Our methodology borrows the idea from financial economics that the return on capital has to cover the cost of capital. Capital costs are determined as opportunity costs, that is, the forgone returns that would have been created by alternative investments. We apply and extend the logic of opportunity costs to the valuation not only of economic capital but also of other forms of capital. This allows (a) integrated analysis of use of different forms of capital based on a value-based aggregation of different forms of capital, (b) determination of the opportunity cost of a bundle of different forms of capital used in a company, called cost of sustainability capital, (c) calculation of sustainability efficiency of companies, and (d) calculation of sustainable value creation, that is, the value above the cost of sustainability capital. By expanding the well-established logic of the valuation of economic capital in financial markets to cover other forms of capital, we provide a methodology that allows determination of the most efficient allocation of sustainability capital for sustainable value creation in companies. We demonstrate the practicability of the methodology by the valuation of the sustainability performance of British Petroleum (BP).

Bio-folio: applying portfolio theory to biodiversity

Genes, species and ecosystems are often considered to be assets. The need to ensure a sufficient diversity of this asset is being increasingly recognised today. Asset managers in banks and insurance companies face a similar challenge. They are asked to manage the assets of their investors by constructing efficient portfolios. They deliberately make use of a phenomenon observed in the formation of portfolios: returns are additive, while risks diversify. This phenomenon and its implications are at the heart of portfolio theory. Portfolio theory, like few other economic theories, has dramatically transformed the practical work of banks and insurance companies. Before portfolio theory was developed about 50 years ago, asset managers were confronted with a situation similar to the situation the research on biodiversity faces today. While the need for diversification was generally accepted, a concept that linked risk and return on a portfolio level and showed the value of diversification was missing. Portfolio theory has closed this gap. This article first explains the fundamentals of portfolio theory and transfers it to biodiversity. A large part of this article is then dedicated to some of the implications portfolio theory has for the valuation and management of biodiversity. The last section introduces three development openings for further research.

A long-term analysis of pumped hydro storage to firm wind power

Although pumped hydro storage is seen as a strategic key asset by grid operators, financing it is complicated in new liberalised markets. It could be argued that the optimum generation portfolio is now determined by the economic viability of generators based on a short to medium term return on investment. This has meant that capital intensive projects such as pumped hydro storage are less attractive for wholesale electricity companies because the payback periods are too long. In tandem a significant amount of wind power has entered the generation mix, which has resulted in operating and planning integration issues due to wind's inherent uncertain, varying spatial and temporal nature. These integration issues can be overcome using fast acting gas peaking plant or energy storage. Most analysis of wind power integration using storage to date has used stochastic optimisation for power system balancing or arbitrage modelling to examine techno-economic viability. In this research a deterministic dynamic programming long term generation expansion model is employed to optimise the generation mix, total system costs and total carbon dioxide emissions, and unlike other studies calculates reserve to firm wind power. The key finding of this study is that the incentive to build capital-intensive pumped hydro storage to firm wind power is limited unless exogenous market costs come very strongly into play. Furthermore it was demonstrated that reserve increases with increasing wind power showing the importance of ancillary services in future power systems. © 2014 Elsevier Ltd. All rights reserved.

EFFECT OF SURFACE RESISTOR LOADING ON HIGH-IMPEDANCE SURFACE RADAR ABSORBER RETURN LOSS AND BANDWIDTH

A simple method for the selection of the appropriate choice of surface-mounted loading resistor required for a thin radar absorber based on a high-impedance surface (HIS) principle is demonstrated. The absorber consists of a HIS, (artificial magnetic ground plane), thickness 0.03 lambda(0) surface-loaded resistive-elements interconnecting a textured surface of square patches. The properties of absorber are characterized under normal incident using a parallel plate waveguide measurement technique over the operating frequency range of 2.6-3.95 GHz. We show that for this arrangement return loss and bandwidth are insensitive to +/- 2% tolerance variations in surface resistor values about the value predicted using the method elaborated in this letter, and that better than -28 dB at 3.125 GHz reflection loss can be obtained with an effective working bandwidth of up to 11% at -10 dB reflection loss. (C) 2009 Wiley Periodicals, Inc. Microwave Opt Technol Lett 51: 1733-1775, 2009; Published online in Wiley Interscience (www.interscience.wiley.com). DOI 10.1002/mop.24454

Path-Dependency, Stocks, Switching Points, Flows: Reflections on Long-term Global Change and Local Opportunities

This paper examines the possibilities for peripheral localities to achieve upward mobility in the world-system by “hooking on” to larger processes of world-system accumulation. In particular, is it possible for economies that are dependent on foreign investment to receive a flow of investments that is high enough to overcome the negative impacts of a high stock of foreign investment, thus enabling them to cross a threshold and achieve upward mobility in the world-system? An analysis of therecent experience of the southern Irish “Celtic Tiger” economy during 1990-2000 indicates that such an upward movement is possible on the basis of massive foreign investment inflows. On closer examination, however, the Irish-type model appears to be highly deficient, because a high proportion of growth is illusionary and also on grounds of social desirability and lack of generalizability.

Long-term return reversals-Value and growth or tax? UK evidence

This paper examines (i) whether value-growth characteristics have more power than past performance in predicting return reversals; and (ii) whether typical rational behaviour such as incentives to delay paying capital gain taxes can better explain long-term reversals than past performance. We find that value-growth characteristics generally provide better explanations for long-term stock returns than past performance. The evidence also shows that winners identified by capital gains dominate past performance winners in predicting reversals in the cross-sectional comparison. However, in the time-series analysis, when returns on capital gain winners are adjusted by the Fama and French (1996) risk factors, the predictive power of capital gain winners disappears. Our results show that capital gain winners are heavily featured as growth stocks. Return reversals in capital gain winners potentially reflect market price corrections for growth stocks. We conclude that investors’ incentives to delay paying capital gain taxes cannot fully rationalise long-term reversals in the UK market. Our results also imply that the long-term return pattern potentially reflects a mixture of investor rational and irrational behaviour.

A 7000 yr perspective on volcanic ash clouds affecting northern Europe

The ash cloud resulting from the 2010 eruption of Eyjafjöll caused severe disruption to air travel across Europe but as a geological event, it is not unprecedented. Analysis of peat and lake sediments from northern Europe has revealed the presence of microscopic layers of Icelandic volcanic ash (tephra). These sedimentary records, together with historical records of Holocene ash falls, demonstrate that Icelandic volcanoes have generated substantial ash clouds that reached northern Europe many times. Here we present the first comprehensive compilation of sedimentary and historical records of ash-fall events in northern Europe, spanning the last 7000 years. Within this period ten tephra layers have been identified in the Faroe Islands, 14 in Great Britain, 11 in Germany, 38 in Scandinavia and 33 in Ireland. Seven ash fall events have been historically documented prior to the Eyjafjöll 2010 event. Ash fall events appear to be more frequent in the last 1500 years, but it is unclear whether this reflects a true increase in eruption frequency or dispersal, or is an artefact of the records themselves or the way they have been generated. In the last 1,000 years, volcanic ash clouds reached Northern Europe with a mean return interval of 53 ± 8 years (the range of return intervals is between 6 and 112 years). Modelling using the ash records for the last millennium indicates that for any 10 year period there is a 17% probability of tephra fallout event in Northern Europe. These values must be considered as conservative estimates due to the nature of tephra capture and preservation in the sedimentary record.

Putting a Price on Prisoner Release: The History of Bail and the Future of Parole

In this article, we argue that the history of bail foretells the future of parole. Under a plancalled the Conditional Post-Conviction Release Bond Act (recently passed into law inthree states), US prisoners can secure early release only after posting ‘post-convictionbail’. As with pre-trial bail, the fledgling model would require prisoners to pay a percent-age of the bail amount to secure their release under the contractual responsibility of acommercial bail agency. If release conditions are breached, bounty hunters are legallyempowered to seize and return the parolee to prison. Our inquiry outlines the origins of this post-conviction bond plan and the research upon which it is based. Drawing on the‘new penology’ framework, we identify several underlying factors that make for a ripeadvocacy environment and set the stage for widespread state-level adoption of this planin the near future. Post-conviction bail fits squarely within the growing policy trendstoward privatization, managerialism, and actuarial justice. Most importantly, though,advocates have the benefit of precedent on their side, as most US states have longrelied on a system of commercial bail bonding and private bounty hunting to manageconditional pretrial release.

‘Towards a Green New Deal on the Island of Ireland: from economic crisis to a new political economy of sustainability’

This article begins from the assumption (which may seem controversial to many) that anyone who thinks that our current economic crisis is a temporary blip until ‘normal service’ (i.e. a return to ‘business as usual’) is resumed, profoundly misunderstands the severity and significance of what’s happening to the global economy and its impacts on the future prosperity of the island of Ireland. The economic recession represents nothing short of a re-structuring of the global economy and the creation of a new dispensation between governments, markets and citizens. The full implications of the re-regulation of the market, with the state bailing out and part nationalising the financial sector in both jurisdictions on the island (as in other parts of the world) have yet to be seen, but what we are witnessing is the emergence of a new economic model. Those who think we can, or even ought to, return to the pre-2008 economic model, are gravely mistaken. The current economic downturn marks the end of the ‘neo-liberal’ model and the beginnings of the transition (an inevitable transition, this article will argue) towards a new low carbon, renewable, green and sustainable economy and society.

Speculative Return Address Stack Management Revisited

Branch prediction feeds a speculative execution processor core with instructions. Branch mispredictions are inevitable and have negative effects on performance and energy consumption. With the advent of highly accurate conditional branch predictors, nonconditional branch instructions are gaining importance.

Parenting advantage in the MNC: An embeddedness perspective on the value added by headquarters

What determines the value an MNC’s headquarters adds to its own affiliates? In this paper, we shed light on this question by linking the embeddedness view of the multinational corporation to the literature on parenting advantage. We test our hypotheses on an original dataset of 124 manufacturing subsidiaries located in Europe. Our results indicate that the external embeddedness of the MNC is an antecedent to headquarters’ value creation. We find that headquarters’ investments into their own relationships with the subsidiaries’ contexts are positively related to the value added by headquarters. Furthermore, this relationship is stronger when the subsidiary itself is strongly embedded. We discuss implications for the MNC literature, embeddedness research, and the literature on parenting and headquarters’ roles. Copyright © 2013 John Wiley & Sons, Ltd.