Cross-country effects of regulatory capital arbitrage

One reason for the recent asset price bubbles in many developed countries could be regulatory capital arbitrage. Regulatory and legal changes can help traditional banks to move their assets off their balance sheets into the lightly regulated shadows and thus enable regulatory arbitrage through the securitized sector. This paper adopts a global vector autoregression (GVAR) methodology to assess the effects of regulatory capital arbitrage on equity prices, house prices and economic activity across 11 OECD countries/ regions. A counterfactual experiment disentangles the effects of regulatory arbitrage following a change in the net capital rule for investment banks in April 2004 and the adoption of the Basel II Accord in June 2004. The results provide evidence for the existence of an international finance multiplier, with about half of the countries overshooting U.S. impulse responses. The counterfactual shows that regulatory arbitrage via the U.S. securitized sector may enhance the cross-country reallocation of capital from housing markets towards equity markets.

A word of caution on calculating market-based minimum capital risk requirements

This paper demonstrates that the use of GARCH-type models for the calculation of minimum capital risk requirements (MCRRs) may lead to the production of inaccurate and therefore inefficient capital requirements. We show that this inaccuracy stems from the fact that GARCH models typically overstate the degree of persistence in return volatility. A simple modification to the model is found to improve the accuracy of MCRR estimates in both back- and out-of-sample tests. Given that internal risk management models are currently in widespread usage in some parts of the world (most notably the USA), and will soon be permitted for EC banks and investment firms, we believe that our paper should serve as a valuable caution to risk management practitioners who are using, or intend to use this popular class of models.

Emotions and the habitus: Young people with socio-emotional differences (re)producing social, emotional and cultural capital in family and leisure space-times

In this paper we explore the importance of emotionally inter-dependent relationships to the functioning of embodied social capital and habitus. Drawing upon the experiences of young people with socio-emotional differences, we demonstrate how emotionally inter-dependent and relatively nurturing relationships are integral to the acquisition of social capital and to the co-construction and embodiment of habitus. The young people presented in this paper often had difficulties in forging social relationships and in acquiring symbolic and cultural capital in school spaces. However, we outline how these young people (re)produce and embody alternative kinds of habitus, based on emotionally reciprocal relationships forged through formal and informal leisure activities and familial and fraternal social relationships. These alternative forms of habitus provide sites of subjection, scope for acquiring social and cultural capital and a positive sense of identity in the face of problematic relations and experiences in school spaces.

Chronic limitations of neo-liberal capitalism and oligopolistic markets: an urgent case for socialized capital

Purpose – The purpose of this paper is to highlight the serious limitations of neo-liberal capitalism and urge for a shift to socialized capital before further economic deterioration leads to a succession of global conflicts. Design/methodology/approach – This conceptual paper adopts a macro perspective in presenting argument on how global, financial markets integration and capital flow liberalization have led to inadequate market and corporate governance measures. The argument is couched in a selected literature and is preceded by a proposed solution – the requirement for socialized capital. An analysis of the nature of socialized capital is outlined and the questions that require attention identified if a paradigm shift from neo-liberal capitalism is to take place. Findings – The need to urgently shift to a new philosophy of capitalism is overwhelming. Emphasized is that capital needs to adopt a socialised identity and is supported by investment horizons of 30 years or more. It is argued that non-market (e.g. state, NGOs, civil society) intervention is critical in setting appropriate frameworks within which socialized capital can operate. Research limitations/implications – This is a theoretical paper, in which questions are raised which require transparent, public debate. Originality/value – The paper presents the case for a fundamental reconsideration of present day markets, the role of capital and the influence of elites in determining the public good.

A grounded investigation of Chinese employees' psychological capital

Purpose – This paper explores the “Western” concept of psychological capital in the People's Republic of China (PRC) and highlights critical areas of divergence and notable dimensions of similarity. Design/methodology/approach – This is an empirical study conducted in a wide range of Chinese organisational forms, employing an inductive approach based on critical incident technique. Findings – This research showed that the concept of psychological capital appears to have a degree of applicability and salience in China. A series of dimensions common in Western organisations were found in our research, including Optimism, Creativity, Resiliency, Self-confidence, Forgiveness and Gratitude, Courage and Ambition (Hope). These were found to be common types of psychological capital both in China and in the West. However, the dimensions of Courtesy and Humility (Qian-gong-you-li in Chinese), Self-possession and Sincerity fell into the “different” category. Originality/value – This paper is a first attempt to examine psychological capital in a range of organisational forms and industrial sectors in China using a grounded theory approach. It not only reports various dimensions of Chinese psychological capital, some unique to this research, but also compares and contrasts these dimensions between China and the West, highlighting further research opportunities.

Spiritual capital: the co-evolution of an ethical framework based on Abrahamic religious values in the Islamic tradition

Purpose – The aim of this paper is to investigate how values from within Abrahamic religions could be adopted to improve liberal market economies’ (LMEs’) corporate governance business practices. Design/methodology/approach – The concept of spiritual capitalism is explained from an Islamic perspective by adopting three universal Abrahamic values to critically analyse LMEs and offer an ethical alternative to current capitalism concerns. Findings – It is found that LMEs can be improved by considering all stakeholders, putting ethics before economics, and introducing shared risk/reward plus lower debt. Originality/value – The paper compares LMEs/Co-ordinated market economies (CMEs)/Islamic countries economies (ICEs) within an ethical framework for LMEs.

Cross-border capital flows into real estate

This study investigates the determinants of cross-border capital flows into direct real estate markets. In particular, it investigates how existing institutional, regulatory and real estate specific barriers affect cross-border real estate inflows and outflows in a sample of 24 developed and emerging countries, and whether investors seek out targets with lower barriers and regulatory arbitrage. We do not find evidence of significant cross-border institutional or regulatory arbitrage in the real estate market. However, real estate market liquidity is found to be the most important driver of cross-border flows. While many of the institutional barriers included in this analysis do not appear to impact the level of real estate inflows significantly, their presence tends to suppress real estate capital outflows to other countries. Overall, easy access to financial markets, a good economic environment and transparent real estate markets may enhance real estate outflows, while returns and the macroeconomy are found to enhance domestic real estate investment.

EISCAT/CRRES observations: nightside ionospheric ion outflow and oxygen-rich substorm injections

We present combined observations made near midnight by the EISCAT radar, all-sky cameras and the combined released and radiation efects satellite (CRRES) shortly before and during a substorm. In particular, we study a discrete, equatorward-drifting auroral arc, seen several degrees poleward of the onset region. The arc passes through the field-aligned beam of the EISCAT radar and is seen to be associated with a considerable upflow of ionospheric plasma. During the substorm, the CRRES satellite observed two major injections, 17 min apart, the second of which was dominated by O+ ions. We show that the observed are was in a suitable location in both latitude and MLT to have fed O+ ions into the second injection and that the upward flux of ions associated with it was sufficient to explain the observed injection. We interpret these data as showing that arcs in the nightside plasma-sheet boundary layer could be the source of O+ ions energised by a dipolarisation of the mid- and near-Earth tail, as opposed to ions ejected from the dayside ionosphere in the cleft ion fountain.

Overlapping cusp ion injections: An explanation invoking magnetopause reconnection

An explanation of overlapping cusp ion injections is presented using the pulsating cusp model of the effects of magnetopause reconnection. It is shown that two populations of cusp ions, covering separated energy ranges, can be seen simultaneously by low- or mid-altitude satellites because of the combined effect of the acceleration and the straightening of newly-opened field lines as they evolve away from the reconnection site. Observations of such signatures, recently reported in data from the Viking and Freja satellites, are discussed in terms of pulsed and steady reconnection.

The impact of career capital on expatriates’ perceived marketability

We examine how the development of three types of career capital (knowing how, knowing whom, and knowing why) during an international assignment affects the perceived marketability of organizational expatriates. Using the perceived marketability perspective and long-term follow-up data, we show that knowing how is seen as the most transferable type of career capital, while the development of other aspects of career capital has little impact on perceived marketability. We also show that career capital development is more recognized in the external market than by current employers. Our findings expand our understanding of long-term career marketability among people who have completed international assignments.

Linguistic capital and the linguistic field for teachers unaccustomed to linguistic difference

Teachers in classrooms throughout England are facing a shifting demographic in their pupil intake. Where once the teaching of children whose first language was not English was considered an inner-city teachers’ role, more recent migration patterns have challenged this preconception (Andrews, 2009). In England in particular, this change sits against an historical backdrop of centralised control of the curriculum for English. This article explores how primary school teachers responded to the arrival of Polish children in county settings following EU accession in 2004. Interviews with a small sample of teachers in schools that had previously been mainly monolingual were coded using Bourdieu’s Logic of Practice. Analysis revealed a complex mix of experienced that appeared to rest on assumed pedagogical norms and professionally assimilated external pressures. Discussion centres on the author’s interpretation of teachers’ ownership of linguistic capital and its relationship to linguistic field.

Business life cycle and capital structure: evidence from Chinese manufacturing firms

This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.

Turning a Bourdieuian lens on English teaching in primary schools: linguistic field, linguistic habitus and linguistic capital

The research project used to frame discussion in this chapter was a doctoral study of the experiences of English primary school teachers teaching pupils whose home language was not English in their previously monolingual classrooms. They taught in a region in the south of England which experienced a significant rise in the population of non-native English speakers following Eastern European member states’ accession to the EU in 2004 and 2007. The study focussed principally on the teachers’ responses to their newly arrived Polish children because Polish families were arriving in far greater numbers than those from other countries. The research aims focussed on exploring and analysing the pedagogical experiences of teachers managing the acquisition of English language for their Polish children. Critical engagement with their experiences and the ways in which they did or did not adapt their pedagogy for teaching English was channelled through Bourdieuian constructs of linguistic field, capital and habitus. The following sections explore my reasons for adopting Bourdieu’s work as a theoretical lens, the practicalities and challenges of incorporating Bourdieu’s tools for thinking in data analysis, and the subsequent impact on my research activity.