Hedging effectiveness of total returns swaps: application to the Japanese market

The development of the real estate swap market offers many opportunities for investors to adjust the exposure of their portfolios to real estate. A number of OTC transactions have been observed in markets around the world. In this paper we examine the Japanese commercial real estate market from the point of view of an investor holding a portfolio of properties seeking to reduce the portfolio exposure to the real estate market by swapping an index of real estate for LIBOR. This paper explores the practicalities of hedging portfolios comprising small numbers of individual properties against an appropriate index. We use the returns from 74 properties owned by Japanese Real Estate Investment Trusts over the period up to September 2007. The paper also discusses and applies the appropriate stochastic processes required to model real estate returns in this application and presents alternative ways of reporting hedging effectiveness. We find that the development of the derivative does provide the capacity for hedging market risk but that the effectiveness of the hedge varies considerably over time. We explore the factors that cause this variability.

The notions of 'restriction' and 'discrimination' in the context of the free movement of persons provisions: from a relationship of interdependence to one of (almost complete) independence

This article aims to analyse how the meaning of the notions of ‘restrictions’ and ‘discrimination’ in EU free movement law has developed through the years, and to explore how the relationship between them has evolved. It is explained that the two concepts under examination had originally been closely intertwined, in the sense that one defined the other, the element holding them together being the aim of the relevant provisions to liberalise the inter-State movement of persons in the EU, as part of the process of establishing an internal market. Yet, more recently, the way that the Court has chosen to delimit their scope, illustrates that each of these notions can now have a life of its own, meaning that ‘discrimination’ can include discriminatory measures which do not lead to restrictions that are contrary to the free movement provisions, and ‘restriction’ can cover national measures that are not discriminatory.

The role of food standards in international trade: evidence from Brazilian beef exports to the EU market

The study reviews the literature on global chain governance and food standards to allow for an assessment of Brazilian beef exports to the European Union. The empirical approach employed is based on company case studies. The results suggest that the Brazilian beef chain has little choice but to adapt to market changes as standards evolve. Costs of compliance for meeting international food standards reduce Brazil's comparative advantage. At the same time, changes in the nature of demand have created the need for a more integrated supply chain in order to enhance confidence in Brazil's beef production and processing abroad.

Tobit estiamtion with unknown point of censoring with an application to milk market participation in the Ethiopian highlands

Data augmentation is a powerful technique for estimating models with latent or missing data, but applications in agricultural economics have thus far been few. This paper showcases the technique in an application to data on milk market participation in the Ethiopian highlands. There, a key impediment to economic development is an apparently low rate of market participation. Consequently, economic interest centers on the “locations” of nonparticipants in relation to the market and their “reservation values” across covariates. These quantities are of policy interest because they provide measures of the additional inputs necessary in order for nonparticipants to enter the market. One quantity of primary interest is the minimum amount of surplus milk (the “minimum efficient scale of operations”) that the household must acquire before market participation becomes feasible. We estimate this quantity through routine application of data augmentation and Gibbs sampling applied to a random-censored Tobit regression. Incorporating random censoring affects markedly the marketable-surplus requirements of the household, but only slightly the covariates requirements estimates and, generally, leads to more plausible policy estimates than the estimates obtained from the zero-censored formulation

Bayes estimates of distance-to-market: Transactions costs, cooperatives and milk-market development in the Ethiopian highlands

Rationalizing non-participation as a resource deficiency in the household, this paper identifies strategies for milk-market development in the Ethiopian highlands. The additional amounts of covariates required for Positive marketable surplus -'distances-to market'-are computed from a model in which production and sales are correlated; sales are left-censored at some Unobserved thresholds production efficiencies are heterogeneous: and the data are in the form of a panel. Incorporating these features into the modeling exercise ant because they are fundamental to the data-generating environment. There are four reasons. First, because production and sales decisions are enacted within the same household, both decisions are affected by the same exogenous shocks, and production and sales are therefore likely to be correlated. Second. because selling, involves time and time is arguably the most important resource available to a subsistence household, the minimum Sales amount is not zero but, rather, some unobserved threshold that lies beyond zero. Third. the Potential existence of heterogeneous abilities in management, ones that lie latent from the econometrician's perspective, suggest that production efficiencies should be permitted to vary across households. Fourth, we observe a single set of households during multiple visits in a single production year. The results convey clearly that institutional and production) innovations alone are insufficient to encourage participation. Market-precipitating innovation requires complementary inputs, especially improvements in human capital and reductions in risk. Copyright (c) 20 08 John Wiley & Sons, Ltd.

Interaction of pesticides with p-glycoprotein and other ABC proteins: A survey of the possible importance to insecticide, herbicide and fungicide resistance

P-glycoproteins (p-gps) are ubiquitous membrane proteins from the ABC (ATP-binding cassette) family. They have been found in many animals, bacteria, plants and fungi and are extremely important in regulating a wide range of xenobiotics including pesticides. P-gps have been linked to xenobiotic resistance, most famously in resistance to cancer drug treatments. Their wide substrate range has led to what is known as "multidrug resistance", where resistance developed to one type of xenobiotic gives resistance to a different classes of xenobiotic. P-gps are a major contributor to drug resistance in mammalian tumours and infections of protozoan parasites such as Plasmodium and Leishmania. There is a growing body of literature suggesting that p-gps, and other ABC proteins, are important in regulating pesticide toxicity and represent potential control failure through the development of pesticide resistance, in both agricultural and medical pests. At the same time, aspects of their biochemistry offer new hope in pest control, in particular in furthering our understanding of toxicity and offering insights into how we can improve control without recourse to new chemical discovery. (c) 2008 Elsevier Inc. All rights reserved.

Commercial real estate and equity market bubbles: are they contagious to REITs?

This paper uses a regime-switching approach to determine whether prices in the US stock, direct real estate and indirect real estate markets are driven by the presence of speculative bubbles. The results show significant evidence of the existence of periodically partially collapsing speculative bubbles in all three markets. A multivariate bubble model is then developed and implemented to evaluate whether the stock and real estate bubbles spill over into REITs. The underlying stock market bubble is found to be a stronger influence on the securitised real estate market bubble than that of the property market. Furthermore, the findings suggest a transmission of speculative bubbles from the direct real estate to the stock market, although this link is not present for the returns themselves.

Catch-up strategies in the Indian auto components industry: domestic firms’ responses to market liberalization

Market liberalization in emerging-market economies and the entry of multinational firms spur significant changes to the industry/institutional environment faced by domestic firms. Prior studies have described how such changes tend to be disruptive to the relatively backward domestic firms, and negatively affect their performance and survival prospects. In this paper, we study how domestic supplier firms may adapt and continue to perform, as market liberalization progresses, through catch-up strategies aimed at integrating with the industry's global value chain. Drawing on internalization theory and the literatures on upgrading and catch-up processes, learning and relational networks, we hypothesize that, for continued performance, domestic supplier firms need to adapt their strategies from catching up initially through technology licensing/collaborations and joint ventures with multinational enterprises (MNEs) to also developing strong customer relationships with downstream firms (especially MNEs). Further, we propose that successful catch-up through these two strategies lays the foundation for a strategy of knowledge creation during the integration of domestic industry with the global value chain. Our analysis of data from the auto components industry in India during the period 1992–2002, that is, the decade since liberalization began in 1991, offers support for our hypotheses.

Segmenting the Italian coffee market: marketing opportunities for economic agents working along the international coffee chain

Globalization, either directly or indirectly (e.g. through structural adjustment reforms), has called for profound changes in the previously existing institutional order. Some changes adversely impacted the production and market environment of many coffee producers in developing countries resulting in more risky and less remunerative coffee transactions. This paper focuses on customization of a tropical commodity, fair-trade coffee, as an approach to mitigating the effects of worsened market conditions for small-scale coffee producers in less developed countries. fair-trade labeling is viewed as a form of “de-commodification” of coffee through product differentiation on ethical grounds. This is significant not only as a solution to the market failure caused by pervasive information asymmetries along the supply chain, but also as a means of revitalizing the agricultural-commodity-based trade of less developed countries (LDCs) that has been languishing under globalization. More specifically, fair-trade is an example of how the same strategy adopted by developed countries’ producers/ processors (i.e. the sequence product differentiation - institutional certification - advertisement) can be used by LDC producers to increase the reputation content of their outputs by transforming them from mere commodities into “decommodified” (i.e. customized and more reputed) goods. The resulting segmentation of the world coffee market makes possible to meet the demand by consumers with preference for this “(ethically) customized” coffee and to transfer a share of the accruing economic rents backward to the Fair-trade coffee producers in LDCs. It should however be stressed that this outcome cannot be taken for granted since investments are needed to promote the required institutional innovations. In Italy FTC is a niche market with very few private brands selling this product. However, an increase of FTC market share could be a big commercial opportunity for farmers in LDCs and other economic agents involved along the international coffee chain. Hence, this research explores consumers’ knowledge of labels promoting quality products, consumption coffee habits, brand loyalty, willingness to pay and market segmentation according to the heterogeneity of preferences for coffee products. The latter was assessed developing a D-efficient design where stimuli refinement was tested during two focus groups.

Fate of prions in soil: Detergent extraction of PrP from soils

The transmissible spongiform encephalopathies (TSEs) are caused by infectious agents whose structures have not been fully characterized but include abnormal forms of the host protein PrP, designated PrPSc, which are deposited in infected tissues. The transmission routes of scrapie and chronic wasting disease (CWD) seem to include environmental spread in their epidemiology, yet the fate of TSE agents in the environment is poorly understood. There are concerns that, for example, buried carcasses may remain a potential reservoir of infectivity for many years. Experimental determination of the environmental fate requires methods for assessing binding/elution of TSE infectivity, or its surrogate marker PrPSc, to and from materials with which it might interact. We report a method using Sarkosyl for the extraction of murine PrPSc, and its application to soils containing recombinant ovine PrP (recPrP). Elution properties suggest that PrP binds strongly to one or more soil components. Elution from a clay soil also required proteinase K digestion, suggesting that in the clay soil binding occurs via the N-terminal of PrP to a component that is absent from the sandy soils tested.

Promoting sustainability: Efficacy and adoption of tobacco-based insecticides in Nigeria

The promotion of technologies seen to be aiding in the attainment of agricultural sustainability has been Popular amongst Northern-based development donors for many years. One of these, botanical insecticides (e.g., those based on neem, Pyrethrum and tobacco) have been a particular favorite as they are equated with being 'natural' and hence less damaging to human health and the environment. This paper describes the outcome of interactions between one non-government organisation (NGO), the Diocesan Development Services (DDS), based in Kogi State, Nigeria, and a major development donor based in Europe that led to the establishment of a programme designed to promote the Virtues of a tobacco-based insecticide to small-scale farmers. The Tobacco Insecticide Programme (TIP) began in the late 1980s and ended in 200 1, absorbing significant quantities of resource in the process. TIP began with exploratory investigations of efficacy on the DDS seed multiplication farm followed by stages of researcher-managed and farmer-managed on-farm trials. A survey in 2002 assessed adoption of the technology by farmers. While yield benefits from using the insecticide were nearly always positive and statistically significant relative to an untreated control, they were not as good as commercial insecticides. However, adoption of the tobacco insecticide by local farmers was poor. The paper discusses the reasons for poor adoption, including relative benefits in gross margin, and uses the TIP example to explore the differing power relationships that exist between donors, their field partners and farmers. (C) 2004 by The Haworth Press, Inc. All rights reserved.

"The past is still right here in the present": second-generation Bajan-Brit transnational migrants' views on issues relating to race and colour class

This paper deals with second-generation Barbadians or 'Bajan-Brits', who have decided to,return' to the birthplace of their parents, focusing on their reactions to matters relating to race relations and racialised identities. The importance of race and the operation of the 'colour-class' system in the Caribbean are established at the outset. Based on fifty-two qualitative in-depth interviews, the paper initially considers the positive things that the second-generation migrants report about living in a majority black country and the salience of such racial affirmation as part of their migration process. The paper then presents an analysis of the narratives provided by the Bajan-Brits concerning their reactions to issues relating to race relations in Barbadian society. The impressions of the young returnees provide clear commentaries on what are regarded as (i) the 'acceptance of white hegemony' within Barbadian society, (ii) the occurrence of de facto 'racial segregation, (iii) perceptions of the 'existence of apartheid, and (iv) 'the continuation of slavery'. The account then turns to the contemporary operation of the colour-class system. It is concluded that, despite academic arguments that the colour-class dimension has to be put to one side as the principal dimension of social stratification in the contemporary Caribbean, the second-generation migrants are acutely aware of the continued existence and salience of such gradations within society. Thus, the analysis not only serves to emphasise the continued importance of racial-based stratification in the contemporary Caribbean, but also speaks of the 'hybrid' and 'in-between' racialised identities of the second-generation migrants.