Democracy, cosmopolitanism and national identity in a ‘globalising’ world

Broadly globalising processes have been in train for centuries, but contemporary discourse about globalisation is here located within a specific historical context, particularly characterised by new forms of communications and the pressures on states produced by the decline of Keynesianism and the end of the Cold War. Coincident changes also led to a growing interest in national identities, marked not least by the founding of this journal in 1999. Globalisation, a series of processes rather than a single force, has a range of effects on states, nations and national identities, including accommodation and adaptation as well as resistance. Indeed, globalising forces, such as democratisation, are shown to require nation-building. Attempts to impose order on international society through cosmopolitan devices are arguably more inimical to national identities. As with nations, cosmopolitanism involves an imagined community. Because this necessarily exists outside time, the building of a sense of trust and commonality across people and territory is however more challenging. Without popular ownership, it is argued, cosmopolitanism is often more likely to appear a threat than a boon. Building a global civil society, or indeed local democracies, is also unlikely when so many societies still lack local versions anchored in some form of national identity.

Do financial distress and liquidity crises affect value and size premiums?

This study investigates the impact of liquidity crises on the relationship between stock (value and size) premiums and default risk in the US market. It first examines whether financial distress can explain value and size premiums, and then, subsequently, aims to determine whether liquidity crises increase the risk of value and size premium investment strategies. The study employs a time-varying approach and a sample of US stock returns for the period between January 1982 and March 2011, a period which includes the current liquidity crisis, so as to examine the relationship between default risk, liquidity crises and value and size premiums. The findings indicate that the default premium has explanatory power for value and size and premiums, which affect firms with different characteristics. We also find that liquidity crises may actually increase the risks related to size and value premium strategies.