Three essays in international finance

Executive Summary The first essay of this dissertation investigates whether greater exchange rate uncertainty (i.e., variation over time in the exchange rate) fosters or depresses the foreign investment of multinational firms. In addition to the direct capital financing it supplies, foreign investment can be a source of valuable technology and know-how, which can have substantial positive effects on a host country's economic growth. Thus, it is critically important for policy makers and central bankers, among others, to understand how multinationals base their investment decisions on the characteristics of foreign exchange markets. In this essay, I first develop a theoretical framework to improve our knowledge regarding how the aggregate level of foreign investment responds to exchange rate uncertainty when an economy consists of many firms, each of which is making decisions. The analysis predicts a U-shaped effect of exchange rate uncertainty on the total level of foreign investment of the economy. That is, the effect is negative for low levels of uncertainty and positive for higher levels of uncertainty. This pattern emerges because the relationship between exchange rate volatility and 'the probability of investment is negative for firms with low productivity at home (i.e., firms that find it profitable to invest abroad) and the relationship is positive for firms with high productivity at home (i.e., firms that prefer exporting their product). This finding stands in sharp contrast to predictions in the existing literature that consider a single firm's decision to invest in a unique project. The main contribution of this research is to show that the aggregation over many firms produces a U-shaped pattern between exchange rate uncertainty and the probability of investment. Using data from industrialized countries for the period of 1982-2002, this essay offers a comprehensive empirical analysis that provides evidence in support of the theoretical prediction. In the second essay, I aim to explain the time variation in sovereign credit risk, which captures the risk that a government may be unable to repay its debt. The importance of correctly evaluating such a risk is illustrated by the central role of sovereign debt in previous international lending crises. In addition, sovereign debt is the largest asset class in emerging markets. In this essay, I provide a pricing formula for the evaluation of sovereign credit risk in which the decision to default on sovereign debt is made by the government. The pricing formula explains the variation across time in daily credit spreads - a widely used measure of credit risk - to a degree not offered by existing theoretical and empirical models. I use information on a country's stock market to compute the prevailing sovereign credit spread in that country. The pricing formula explains a substantial fraction of the time variation in daily credit spread changes for Brazil, Mexico, Peru, and Russia for the 1998-2008 period, particularly during the recent subprime crisis. I also show that when a government incentive to default is allowed to depend on current economic conditions, one can best explain the level of credit spreads, especially during the recent period of financial distress. In the third essay, I show that the risk of sovereign default abroad can produce adverse consequences for the U.S. equity market through a decrease in returns and an increase in volatility. The risk of sovereign default, which is no longer limited to emerging economies, has recently become a major concern for financial markets. While sovereign debt plays an increasing role in today's financial environment, the effects of sovereign credit risk on the U.S. financial markets have been largely ignored in the literature. In this essay, I develop a theoretical framework that explores how the risk of sovereign default abroad helps explain the level and the volatility of U.S. equity returns. The intuition for this effect is that negative economic shocks deteriorate the fiscal situation of foreign governments, thereby increasing the risk of a sovereign default that would trigger a local contraction in economic growth. The increased risk of an economic slowdown abroad amplifies the direct effect of these shocks on the level and the volatility of equity returns in the U.S. through two channels. The first channel involves a decrease in the future earnings of U.S. exporters resulting from unfavorable adjustments to the exchange rate. The second channel involves investors' incentives to rebalance their portfolios toward safer assets, which depresses U.S. equity prices. An empirical estimation of the model with monthly data for the 1994-2008 period provides evidence that the risk of sovereign default abroad generates a strong leverage effect during economic downturns, which helps to substantially explain the level and the volatility of U.S. equity returns.

Introduction : la normalisation des services dans la mondialisation

This book examines the role of technical standards in the regulation of services at the international level. It brings together scholarship in international political economy, French regulation theory, and economic sociology in order to discuss the following questions: Which services are most likely to be internationalised and what actors are the most concerned by the phenomenon? What is the relationship between the internationalisation of services and their institutional environment? What is more particularly the role of technical standards in delivering and using services? The introductory chapter presents a comprehensive analysis of cutting edge research on these questions. It argues that technical standards shape new forms of collective action and transnational authority. The chapter suggests some hypotheses for a new research agenda.

Pluralized life courses? An exploration of the life trajectories of individuals with psychiatric disorders.

BACKGROUND: : Most of the existing research relating to the life courses of people with psychiatric symptoms focuses on the occurrence and the impact of non-normative events on the onsets of crises; it usually disregards the more regular dimensions of life, such as work, family and intimate partnerships that may be related to the timing and seriousness of psychiatric problems. An additional reason for empirically addressing life trajectories of individuals with psychiatric problems relates to recent changes of family and occupational trajectories in relation to societal trends such as individualization and pluralization of life courses.¦AIM: : This paper explores the life trajectories of 86 individuals under clinical supervision and proposes a typology of their occupational, co-residence and intimacy trajectories. The results are discussed in light of the life-course paradigm.¦METHOD: : A multidimensional optimal matching analysis was performed on a sample of 86 individuals under clinical supervision to create a typology of trajectories. The influence of these trajectories on psychiatric disorders, evaluated using a SCL-90-R questionnaire, was then assessed using linear regression modelling.¦RESULTS: : The typologies of trajectories showed that the patients developed a diversity of life trajectories. Individuals who have developed a standard life course with few institutionalization periods reported more symptoms and distress than individuals with an institutionalized life trajectory.¦CONCLUSION: : The results of this study stress that psychiatric patients are social actors who are influenced by society at large and its ongoing process of change. Therefore, it is essential to take into account the diversity of occupational and family trajectories when dealing with individuals in therapeutic settings.

Services standardization in the United-States and in Europe: an institutional analysis of private authority

This contribution explores the role of international standards in the rules governing the internationalisation of the service economy. It analyses on a cross-institutional basis patterns of authority in the institutional setting of service standards in the European and Amercian context. The entry into force of the World Trade Organisation (WTO) in 1995 gave international standards a major role in harmonising the technical specifications of goods and services traded on the global market Despite the careful wording of the WTO, a whole range of international bodies still have the capacity to define generic as well as detailed technical specifications affecting how swelling offshore services are expected to be traded on worldwide basis. The analysis relies on global political economy approaches to identify constitutive patterns of authority mediating between the political and the economic spheres on a transnational space. It extends to the area of service standards the assumption that the process of globalisation is not opposing states and markets, but a joint expression of both of them including new patterns and agents of structural change through formal and informal power and regulatory practices. The paper argues that service standards reflect the significant development of a form of transnational hybrid authority, that blurs the distinction between private and public actors, whose scope spread all along from physical measures to societal values, and which reinforces the deterritorialisation of regulatory practices in contemporary capitalism. It provides evidence of this argument by analysing the current European strategy regarding service standardization in response to several programming mandate of the European Commission and the American views on the future development of service standards.

From Naples 1963 to Rome 2013 - A brief review of how the International Research Group on Ostracoda (IRGO) developed as a social communication system

The 1st International Symposium on Ostracoda (ISO) was held in Naples (1963). The philosophy behind this symposium and the logical outcome of what is now known as the International Research Group on Ostracoda (IRGO) is here reviewed, namely ostracodology over the last 50 years is sociologically analysed. Three different and important historic moments for the scientific achievements of this domain are recognised. The first one, between about 1963-1983, is related to applied research for the oil industry as well as to the great interest in the better description of the marine environment by both zoologists and palaeontologists. Another important aspect during this period was the work by researchers dealing with Palaeozoic ostracods, who had their own discussion group, IRGPO. Gradually, the merger of this latter group with those dealing with post-Palaeozoic ostracods at various meetings improved communication between the two groups of specialists. A second period was approximately delineated between 1983 and 2003. During this time-slice, more emphasis was addressed to environmental research with topics such as the study of global events and long-term climate change. Ostracodologists profited also from the research "politics" within national and international programmes. Large international research teams emerged using new research methods. During the third period (2003-2013), communication and collaborative research reached a global dimension. Amongst the topics of research we cite the reconstruction of palaeoclimate using transfer functions, the building of large datasets of ostracod distributions for regional and intercontinental studies, and the implementation of actions that should lead to taxonomic harmonisation. Projects within which molecular biological techniques are routinely used, combined with sophisticated morphological information, expanded now in their importance. The documentation of the ostracod description improved through new techniques to visualise morphological details, which stimulated also communication between ostracodologists. Efforts of making available ostracod information through newsletters and electronic media are evoked.

Extent of hypoattenuation on CT angiography source images in basilar artery occlusion: prognostic value in the Basilar Artery International Cooperation Study.

BACKGROUND AND PURPOSE: The posterior circulation Acute Stroke Prognosis Early CT Score (pc-ASPECTS) quantifies the extent of early ischemic changes in the posterior circulation with a 10-point grading system. We hypothesized that pc-ASPECTS applied to CT angiography source images predicts functional outcome of patients in the Basilar Artery International Cooperation Study (BASICS). METHODS: BASICS was a prospective, observational registry of consecutive patients with acute symptomatic basilar artery occlusion. Functional outcome was assessed at 1 month. We applied pc-ASPECTS to CT angiography source images of patients with CT angiography for confirmation of basilar artery occlusion. We calculated unadjusted and adjusted risk ratios (RRs) of pc-ASPECTS dichotomized at ≥8 versus <8. Primary outcome measure was favorable outcome (modified Rankin Scale scores 0-3). Secondary outcome measures were mortality and functional independence (modified Rankin Scale scores 0-2). RESULTS: Of 158 patients included, 78 patients had a CT angiography source images pc-ASPECTS≥8. Patients with a pc-ASPECTS≥8 more often had a favorable outcome than patients with a pc-ASPECTS<8 (crude RR, 1.7; 95% CI, 0.98-3.0). After adjustment for age, baseline National Institutes of Health Stroke Scale score, and thrombolysis, pc-ASPECTS≥8 was not related to favorable outcome (RR, 1.3; 95% CI, 0.8-2.2), but it was related to reduced mortality (RR, 0.7; 95% CI, 0.5-0.98) and functional independence (RR, 2.0; 95% CI, 1.1-3.8). In post hoc analysis, pc-ASPECTS dichotomized at ≥6 versus <6 predicted a favorable outcome (adjusted RR, 3.1; 95% CI, 1.2-7.5). CONCLUSIONS: pc-ASPECTS on CT angiography source images independently predicted death and functional independence at 1 month in the CT angiography subgroup of patients in the BASICS registry.

The attractiveness of nations in global competition : an empirical assessment of the effects of country attractiveness on the success of strategy for hosting international sports events, 1990-2012

This dissertation aims to investigate empirical evidence on the importance and influence of attractiveness of nations in global competition. The notion of country attractiveness, which has been widely developed in the research areas of international business, tourism and migration, is a multi-dimensional construct to measure a country's characteristics with regard to its market or destination that attract international investors, tourists and migrants. This analytical concept provides an account of the mechanism as to how potential stakeholders evaluate more attractive countries based on certain criteria. Thus, in the field of international sport-event bidding, do international sport event owners also have specific country attractiveness for their sport event hosts? The dissertation attempts to address this research question by statistically assessing the effects of country attractiveness on the success of strategy for hosting international sports events. Based on theories of signaling and soft power, country attractiveness is defined and measured as the three dimensions of sustainable development: economic, social, and environmental attractiveness. This thesis proceeds to examine the concept of sport-event-hosting strategy and explore multi-level factors affecting the success in international sport-event bidding. By exploring past history of the Olympic Movement from theoretical perspectives, the thesis proposes and tests the hypotheses that economic, social and environmental attractiveness of a country may be correlated with its bid wins or the success of sport-event-hosting strategy. Quantitative analytical methods with various robustness checks are employed with using collected data on bidding results of major events in Olympic sports during the period from 1990 to 2012. The analysis results reveal that event owners of international Olympic sports are likely to prefer countries that have higher economic, social, and environmental attractiveness. The empirical assessment of this thesis suggests that high country attractiveness can be an essential element of prerequisites for a city/country to secure in order to bid with an increased chance of success.

An international, randomized, double-blind, placebo-controlled, phase III trial of pregabalin monotherapy in treatment of patients with fibromyalgia.

OBJECTIVE: To evaluate the efficacy and safety of pregabalin monotherapy versus placebo for symptomatic pain relief and improvement of patient global assessment in patients with fibromyalgia (FM) enrolled from countries outside the United States. METHODS: This international, multicenter, double-blind, placebo-controlled trial randomly assigned 747 patients with FM to placebo or 300, 450, or 600 mg/day pregabalin twice daily for 14 weeks. Primary efficacy measures were endpoint mean pain scores and Patient Global Impression of Change (PGIC). Secondary outcomes included assessments of sleep and function. RESULTS: Patients in the 450 mg/day pregabalin group showed significant improvements versus placebo in endpoint mean pain score (-0.56; p = 0.0132), PGIC (73% improved vs 56% placebo; p = 0.0017), and function [Fibromyalgia Impact Questionnaire (FIQ) total score -5.85; p = 0.0012]. PGIC was also significant for 600 mg/day pregabalin (69% improved; p = 0.0227). Results for these endpoints were nonsignificant for pregabalin at 300 mg/day and for pain and FIQ score at 600 mg/day. Early onset of pain relief was seen, with separation from placebo detected by Week 1 in all pregabalin groups. All pregabalin doses demonstrated superiority to placebo on the Medical Outcomes Study-Sleep Scale Sleep Disturbance subscale and the Sleep Quality diary. Dizziness and somnolence were the most frequently reported adverse events. CONCLUSION: Pregabalin demonstrated modest efficacy in pain, global assessment, and function in FM at 450 mg/day, and improved sleep across all dose levels, but it did not provide consistent evidence of benefit at 300 and 600 mg/day in this study. Pregabalin was generally well tolerated for the treatment of FM. (Clinical trial registry NCT00333866).

Global regulation of the knowledge-based economy: The rise of standards in educational services

This article examines the extent and limits of non-state forms of authority in international relations. It analyses how the information and communication technology (ICT) infrastructure for the tradability of services in a global knowledge-based economy relies on informal regulatory practices for adjustment of ICT-related skills. Companies and associations provide training and certification programmes as part of a growing market for educational services setting their own standards. The existing literature on non-conventional forms of authority in the global political economy has emphasised that the consent of actors subject to informal rules and explicit or implicit state recognition remains crucial for the effectiveness of those new forms of power. However, analyses based on a limited sample of actors tend toward a narrow understanding of the issues and fail to fully explore the differentiated space in which non-state authority is emerging. This paper examines the form of authority underpinning the global knowledge-based economy within the broader perspective of the issues likely to be standardised by technical ICT specification, the wide range of actors involved, and the highly differentiated space where standards become authoritative. The empirical findings highlight the role of different private actors in establishing international educational norms in this field. They also pinpoint the limits of profit-oriented standard-settings, notably with regard to generic norms.