Credit and collateral

Collateral - generally defined as an asset used to provide security for a lender's loan - is an important feature of credit contracts and all the available evidence suggests that its use is getting more pervasive. This informative book builds upon recent research into this topic. Sena analyses three case-studies that revolve around the impact that financial constraints have on economic outcomes. In the first case-study, the relationship between firms' technical efficiency and increasing financial pressure is explored. The author then goes on to show, in the second case study, that under specific circumstances, increasing financial pressure and increasing product market competition can jointly have a positive impact on firms' technical efficiency, while not being true for all types of firms. In the third case, she analyses the impact that finance constraints have on women's start-ups. Unique and revealing, this is the first book to deal so extensively with the topic of collateral, and as such, is a valuable reference to postgraduates and professionals in the fields of macroeconomics, monetary and business economics. © 2008 Vania Sena. All rights reserved.

Attentional shifting and the role of the dorsal pathway in visual word recognition

A substantial amount of evidence has been collected to propose an exclusive role for the dorsal visual pathway in the control of guided visual search mechanisms, specifically in the preattentive direction of spatial selection [Vidyasagar, T. R. (1999). A neuronal model of attentional spotlight: Parietal guiding the temporal. Brain Research and Reviews, 30, 66-76; Vidyasagar, T. R. (2001). From attentional gating in macaque primary visual cortex to dyslexia in humans. Progress in Brain Research, 134, 297-312]. Moreover, it has been suggested recently that the dorsal visual pathway is specifically involved in the spatial selection and sequencing required for orthographic processing in visual word recognition. In this experiment we manipulate the demands for spatial processing in a word recognition, lexical decision task by presenting target words in a normal spatial configuration, or where the constituent letters of each word are spatially shifted relative to each other. Accurate word recognition in the Shifted-words condition should demand higher spatial encoding requirements, thereby making greater demands on the dorsal visual stream. Magnetoencephalographic (MEG) neuroimaging revealed a high frequency (35-40 Hz) right posterior parietal activation consistent with dorsal stream involvement occurring between 100 and 300 ms post-stimulus onset, and then again at 200-400 ms. Moreover, this signal was stronger in the shifted word condition, compared to the normal word condition. This result provides neurophysiological evidence that the dorsal visual stream may play an important role in visual word recognition and reading. These results further provide a plausible link between early stage theories of reading, and the magnocellular-deficit theory of dyslexia, which characterises many types of reading difficulty. © 2006 Elsevier Ltd. All rights reserved.

Marketing strategy and new product development in the UK credit card industry

The development of new products in today's marketing environment is generally accepted as a requirement for the continual growth and prosperity of organisations. The literature is consequently rich with information on the development of various aspects of good products. In the case of service industries, it can be argued that new service product development is of as least equal importance as it is to organisations that produce tangible goods products. Unlike the new goods product literature, the literature on service marketing practices, and in particular, new service product development, is relatively sparse. The main purpose of this thesis is to examine a number of aspects of new service product development practice with respect to financial services and specifically, credit card financial services. The empirical investigation utilises both a case study and a survey approach, to examine aspects of new service product development industry practice relating specifically to gaps and deficiencies in the literature with respect to the financial service industry. The findings of the empirical work are subsequently examined in the context in which they provide guidance and support for a new normative new service product development model. The study examines the UK credit card financial service product sector as an industry case study and perspective. The findings of the field work reveal that the new service product development process is still evolving, and that in the case of credit card financial services can be seen as a well-structured and well-documented process. New product development can also be seen as an incremental, complex, interactive and continuous process which has been applied in a variety of ways. A number of inferences are subsequently presented.

Does lending behaviour of banks in emerging economies vary by ownership? Evidence from the Indian banking sector

While much has been discussed about the relationship between ownership and financial performance of banks in emerging markets, literature about cross-ownership differences in credit market behaviour of banks in emerging economies is sparse. Using a portfolio choice model and bank-level data from India for 9 years (1995–96 to 2003–04), we examine banks’ behaviour in the context of credit markets of an emerging market economy. Our results indicate that, in India, the data for the domestic banks fit well the aforementioned portfolio-choice model, especially for private banks, but the model cannot explain the behaviour of foreign banks. In general, allocation of assets between risk-free government securities and risky credit is affected by past allocation patterns, stock exchange listing (for private banks), risk averseness of banks, regulations regarding treatment of NPA, and ability of banks to recover doubtful credit. It is also evident that banks deal with changing levels of systematic risk by altering the ratio of securitized to non-securitized credit.

Sticky credit spreads, macroeconomic activity and equity market volatility

We uncover high persistence in credit spread series that can obscure the relationship between the theoretical determinants of credit risk and observed credit spreads. We use a Markovswitching model, which also captures the stability (low frequency changes) of credit ratings, to show why credit spreads may continue to respond to past levels of credit risk, even though the state of the economy has changed. A bivariate model of credit spreads and either macroeconomic activity or equity market volatility detects large and significant correlations that are consistent with theory but have not been observed in previous studies. © 2010 Nova Science Publishers, Inc. All rights reserved.

Cortical mechanisms of attention in time:neural correlates of the Lag-1-sparing phenomenon

If humans monitor streams of rapidly presented (approximately 100-ms intervals) visual stimuli, which are typically specific single letters of the alphabet, for two targets (T1 and T2), they often miss T2 if it follows T1 within an interval of 200-500 ms. If T2 follows T1 directly (within 100 ms; described as occurring at 'Lag 1'), however, performance is often excellent: the so-called 'Lag-1 sparing' phenomenon. Lag-1 sparing might result from the integration of the two targets into the same 'event representation', which fits with the observation that sparing is often accompanied by a loss of T1-T2 order information. Alternatively, this might point to competition between the two targets (implying a trade-off between performance on T1 and T2) and Lag-1 sparing might solely emerge from conditional data analysis (i.e. T2 performance given T1 correct). We investigated the neural correlates of Lag-1 sparing by carrying out magnetoencephalography (MEG) recordings during an attentional blink (AB) task, by presenting two targets with a temporal lag of either 1 or 2 and, in the case of Lag 2, with a nontarget or a blank intervening between T1 and T2. In contrast to Lag 2, where two distinct neural responses were observed, at Lag 1 the two targets produced one common neural response in the left temporo-parieto-frontal (TPF) area but not in the right TPF or prefrontal areas. We discuss the implications of this result with respect to competition and integration hypotheses, and with respect to the different functional roles of the cortical areas considered. We suggest that more than one target can be identified in parallel in left TPF, at least in the absence of intervening nontarget information (i.e. masks), yet identified targets are processed and consolidated as two separate events by other cortical areas (right TPF and PFC, respectively).

Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations

We apply prospect theory to explain how personal and corporate bankruptcy laws affect risk perceptions of entrepreneurs at time of entry and therefore their growth ambitions. Previous theories have reached ambiguous conclusions as to whether countries with more debtor-friendly bankruptcy laws (i.e. laws that are more forgiving towards debtors in bankruptcy proceedings) are likely to have more entrepreneurs, or whether, creditorfriendly regimes have positive effects on new ventures via enhanced incentives for the supply of credit to entrepreneurs. Responding to this ambiguity, we apply prospect theory to propose that entrepreneurs do not attach the same significance to different elements of bankruptcy codes—and to explain which aspects of debtor-friendly bankruptcy laws matter more to entrepreneurs. Based on this, we derive and confirm hypotheses about the impact of aspects of bankruptcy codes on entrepreneurial activity using the Global Entrepreneurship Monitor combined with data on both personal and corporate bankruptcyregulations for 15 developed OECD countries. We use multilevel random coefficient logistic regressions to take account of the hierarchical nature of the data (country and individual levels). Because entrepreneurs and creditors are sensitive to different elements of the codes, there is scope for optimisation of the legal design of bankruptcy law to achieve both an adequate supply of credit and to encourage high-ambition entrepreneurship.