The financial system reform in China: the lesson learnt from the global financial crisis

This paper reviews the impact of the global financial crisis on financial system reform in China. Scholars and practitioners have critically questioned the efficiencies of the Anglo- American principal-agent model of corporate governance which promotes shareholder-value maximisation. Should China continue to follow the U.K.-U.S. path in relation to financial reform? This conceptual paper provides an insightful review of the corporate governance literature, regulatory reports and news articles from the financial press. After examining the fundamental limitations of the laissez-faire philosophy that underpins the neo-liberal model of capitalism, the paper considers the risks in opening up China’s financial markets and relaxing monetary and fiscal policies. The paper outlines a critique of shareholder-capitalism in relation to the German team-production model of corporate governance, promoting a “social market economy” styled capitalism. Through such analysis, the paper explores numerous implications for China to consider in terms of developing a new and sustainable corporate governance model. China needs to follow its own financial reform through understanding its particular economy. The global financial crisis might help China rethink the nature of corporate governance, identify its weakness and assess the current reform agenda.

Modelling of Johne's disease control options in beef cattle: a decision support approach

Johne's disease in cattle is a contagious wasting disease caused by Mycobacterium avium subspecies paratuberculosis (MAP). Johne's infection is characterised by a long subclinical phase and can therefore go undetected for long periods of time during which substantial production losses can occur. The protracted nature of Johne's infection therefore presents a challenge for both veterinarians and farmers when discussing control options due to a paucity of information and limited test performance when screening for the disease. The objectives were to model Johne's control decisions in suckler beef cattle using a decision support approach, thus implying equal focus on ‘end user’ (veterinarian) participation whilst still focusing on the technical disease modelling aspects during the decision support model development. The model shows how Johne's disease is likely to affect a herd over time both in terms of physical and financial impacts. In addition, the model simulates the effect on production from two different Johne's control strategies; herd management measures and test and cull measures. The article also provides and discusses results from a sensitivity analysis to assess the effects on production from improving the currently available test performance. Output from running the model shows that a combination of management improvements to reduce routes of infection and testing and culling to remove infected and infectious animals is likely to be the least-cost control strategy.

e-Government as a regulatory response to the financial crisis: the case of the UK

This paper seeks to discuss EU policies relating to securities markets, created in the wake of the financial crisis and how ICT and specifically e-Government can be utilised within this context. This study utilises the UK as a basis for our discussion. The recent financial crisis has caused a change of perspective in relation to government services and polices. The regulation of the financial sector has been heavily criticised and so is undergoing radical change in the UK and the rest of Europe. New regulatory bodies are being defined with more focus on taking a risk-based system-wide approach to regulating the financial sector. This approach aims to prevent financial institutions becoming too big to fail and thus require massive government bail outs. In addition, a new wave of EU regulation is in the wind to update risk management practices and to further protect investors. This paper discusses the reasons for the financial crisis and the UK’s past and future regulatory landscape. The current and future approach and strategies adopted by the UK’s financial regulators are reviewed as is the lifecycle of EU Directives. The regulatory responses to the crisis are discussed and upcoming regulatory hotspots identified. Discussion of these issues provides the context for our evaluation of the role e-Government and ICT in improving the regulatory system. We identify several processes, which are elementary for regulatory compliance and discuss how ICT is elementary in their implementation. The processes considered include those required for internal control and monitoring, risk management, record keeping and disclosure to regulatory bodies. We find these processes offer an excellent opportunity to adopt an e-Government approach to improve services to both regulated businesses and individual investors through the benefits derived from a more effective and efficient regulatory system.

Islamic mutual funds' financial performance and international investment style: evidence from 20 countries

We pursue the first large-scale investigation of a strongly growing mutual fund type: Islamic funds. Based on an unexplored, survivorship bias-adjusted data set, we analyse the financial performance and investment style of 265 Islamic equity funds from 20 countries. As Islamic funds often have diverse investment regions, we develop a (conditional) three-level Carhart model to simultaneously control for exposure to different national, regional and global equity markets and investment styles. Consistent with recent evidence for conventional funds, we find Islamic funds to display superior learning in more developed Islamic financial markets. While Islamic funds from these markets are competitive to international equity benchmarks, funds from especially Western nations with less Islamic assets tend to significantly underperform. Islamic funds’ investment style is somewhat tilted towards growth stocks. Funds from predominantly Muslim economies also show a clear small cap preference. These results are consistent over time and robust to time varying market exposures and capital market restrictions.

Setting UK standards on the concept of control: an analysis of lobbying behaviour

The present study aims to contribute to an understanding of the complexity of lobbying activities within the accounting standard-setting process in the UK. The paper reports detailed content analysis of submission letters to four related exposure drafts. These preceded two accounting standards that set out the concept of control used to determine the scope of consolidation in the UK, except for reporting under international standards. Regulation on the concept of control provides rich patterns of lobbying behaviour due to its controversial nature and its significance to financial reporting. Our examination is conducted by dividing lobbyists into two categories, corporate and non-corporate, which are hypothesised (and demonstrated) to lobby differently. In order to test the significance of these differences we apply ANOVA techniques and univariate regression analysis. Corporate respondents are found to devote more attention to issues of specific applicability of the concept of control, whereas non-corporate respondents tend to devote more attention to issues of general applicability of this concept. A strong association between the issues raised by corporate respondents and their line of business is revealed. Both categories of lobbyists are found to advance conceptually-based arguments more often than economic consequences-based or combined arguments. However, when economic consequences-based arguments are used, they come exclusively from the corporate category of respondents.

Power and control: managing agents for international student recruitment in higher education

This multiple case-based study investigates the relationship between recruiting agents and the UK universities who act as their principals. The current extensive use of agents in UK higher education may be seen as an indicator of the financial impact made by international students. The study analyses the practice of agent management and explores the manner in which power and control interact. The study employed semi-structured interviews and group discussions involving up to 6 respondents from each of the 20 UK case institutions. The qualitative data reveal a considerable variation in the manner in which the universities manage their agency relationships. Through the joint consideration of control measures and use of power, five distinctive approaches have been identified. The study also reveals that over-dependence on agents reduces the power of the principal, and consequently, the principal’s ability to exercise control, particularly in highly competitive global and national markets.

The post-financial crisis challenges for corporate governance and banking reform in China

The purpose of this paper is to review the impact of the global financial crisis on banking reform in China. The significant doubt concerning the efficiencies of Anglo-American model of corporate governance has raised a critical political question amongst scholars and practitioners as to whether China should continue to follow the U.K.-U.S. path in relation to financial reform. This conceptual paper provides an insightful review of the corporate governance literature and regulatory reports. After examining the fundamental limitations of the laissez-faire philosophy that underpins the neo-liberal model of capitalism, which promotes greater liberalization and less control, the paper considers the risks in opening China’s financial markets and relaxing monetary and fiscal policies. A critique of shareholder-capitalism is outlined in relation to the German’s “social market economy” styled capitalism. Through such analysis the paper explores a number of implications for China to consider in terms of developing a new and sustainable corporate governance model applicable to the Chinese context.

The financial and environmental performance of firms exposed to the EU Emissions Trading Scheme

This thesis is an empirical-based study of the European Union’s Emissions Trading Scheme (EU ETS) and its implications in terms of corporate environmental and financial performance. The novelty of this study includes the extended scope of the data coverage, as most previous studies have examined only the power sector. The use of verified emissions data of ETS-regulated firms as the environmental compliance measure and as the potential differentiating criteria that concern the valuation of EU ETS-exposed firms in the stock market is also an original aspect of this study. The study begins in Chapter 2 by introducing the background information on the emission trading system (ETS), which focuses on (i) the adoption of ETS as an environmental management instrument and (ii) the adoption of ETS by the European Union as one of its central climate policies. Chapter 3 surveys four databases that provide carbon emissions data in order to determine the most suitable source of the data to be used in the later empirical chapters. The first empirical chapter, which is also Chapter 4 of this thesis, investigates the determinants of the emissions compliance performance of the EU ETS-exposed firms through constructing the best possible performance ratio from verified emissions data and self-configuring models for a panel regression analysis. Chapter 5 examines the impacts on the EU ETS-exposed firms in terms of their equity valuation with customised portfolios and multi-factor market models. The research design takes into account the emissions allowance (EUA) price as an additional factor, as it has the most direct association with the EU ETS to control for the exposure. The final empirical Chapter 6 takes the investigation one step further, by specifically testing the degree of ETS exposure facing different sectors with sector-based portfolios and an extended multi-factor market model. The findings from the emissions performance ratio analysis show that the business model of firms significantly influences emissions compliance, as the capital intensity has a positive association with the increasing emissions-to-emissions cap ratio. Furthermore, different sectors show different degrees of sensitivity towards the determining factors. The production factor influences the performance ratio of the Utilities sector, but not the Energy or Materials sectors. The results show that the capital intensity has a more profound influence on the utilities sector than on the materials sector. With regard to the financial performance impact, ETS-exposed firms as aggregate portfolios experienced a substantial underperformance during the 2001–2004 period, but not in the operating period of 2005–2011. The results of the sector-based portfolios show again the differentiating effect of the EU ETS on sectors, as one sector is priced indifferently against its benchmark, three sectors see a constant underperformance, and three sectors have altered outcomes.

Farmer attitudes and livestock disease: exploring citizenship behaviour and peer monitoring across two BVD control schemes in the UK

The eradication of BVD in the UK is technically possible but appears to be socially untenable. The following study explored farmer attitudes to BVD control schemes in relation to advice networks and information sharing, shared aims and goals, motivation and benefits of membership, notions of BVD as a priority disease and attitudes toward regulation. Two concepts from the organisational management literature framed the study: citizenship behaviour where actions of individuals support the collective good (but are not explicitly recognised as such) and peer to peer monitoring (where individuals evaluate other’s behaviour). Farmers from two BVD control schemes in the UK participated in the study: Orkney Livestock Association BVD Eradication Scheme and Norfolk and Suffolk Cattle Breeders Association BVD Eradication Scheme. In total 162 farmers participated in the research (109 in-scheme and 53 out of scheme). The findings revealed that group helping and information sharing among scheme members was low with a positive BVD status subject to social censure. Peer monitoring in the form of gossip with regard to the animal health status of other farms was high. Interestingly, farmers across both schemes supported greater regulation with regard to animal health, largely due to the mistrust of fellow farmers following voluntary disease control measures. While group cohesiveness varied across the two schemes, without continued financial inducements, longer-term sustainability is questionable

Board of directors and top management team: a study on CEO relative power and financial return

Best corporate governance practices published in the primers of Brazilian Securities and Exchange Commission and the Brazilian Corporate Governance Institute promote board independence as much as possible, as a way to increase the effectiveness of governance mechanism (Sanzovo, 2010). Therefore, this paper aims at understanding if what the managerial literature portraits as being self-evident - stricter governance, better performance - can be observed in actual evidence. The question answered is: do companies with a stricter control and monitoring system perform better than others? The method applied in this paper consists on comparing 116 companies in respect to the their independence level between top management team and board directors– being that measured by four parameters, namely, the percentage of independent outsiders in the board, the separation of CEO and chairman, the adoption of contingent compensation and the percentage of institutional investors in the ownership structure – and their financial return measured in terms return on assets (ROA) from the latest Quarterly Earnings release of 2012. From the 534 companies listed in the Stock Exchange of Sao Paulo – Bovespa – 116 were selected due to their level of corporate governance. The title “Novo Mercado” refers to the superior level of governance level within companies listed in Bovespa, as they have to follow specific criteria to assure shareholders ´protection (BM&F, 2011). Regression analyses were conducted in order to reveal the correlation level between two selected variables. The results from the regression analysis were the following: the correlation between each parameter and ROA was 10.26%; the second regression analysis conducted measured the correlation between the independence level of top management team vis-à-vis board directors – namely, CEO relative power - and ROA, leading to a multiple R of 5.45%. Understanding that the scale is a simplification of the reality, the second part of the analysis transforms all the four parameters into dummy variables, excluding what could be called as an arbitrary scale. The ultimate result from this paper led to a multiple R of 28.44%, which implies that the combination of the variables are still not enough to translate the complex reality of organizations. Nonetheless, an important finding can be taken from this paper: two variables (percentage of outside directors and percentage of institutional investor ownership) are significant in the regression, with p-value lower than 10% and with negative coefficients. In other words, counter affirming what the literature very often portraits as being self-evident – stricter governance leads to higher performance – this paper has provided evidences to believe that the increase in the formal governance structure trough outside directors in the board and ownership by institutional investor might actually lead to worse performance. The section limitations and suggestions for future researches presents some reasons explaining why, although supported by strong theoretical background, this paper faced some challenging methodological assumptions, precluding categorical statements about the level of governance – measured by four selected parameters – and the financial return in terms of financial on assets.

Optimal and sub-optimal control in Dengue epidemics

This work concerns the application of the optimal control theory to Dengue epidemics. The dynamics of this insect-borne disease is modelled as a set of non-linear ordinary differential equations including the effect of educational campaigns organized to motivate the population to break the reproduction cycle of the mosquitoes by avoiding the accumulation of still water in open-air recipients. The cost functional is such that it reflects a compromise between actual financial spending (in insecticides and educational campaigns) and the population health (which can be objectively measured in terms of, for instance, treatment costs and loss of productivity). The optimal control problem is solved numerically using a multiple shooting method. However, the optimal control policy is difficult to implement by the health authorities because it is not practical to adjust the investment rate continuously in time. Therefore, a suboptimal control policy is computed assuming, as the admissible set, only those controls which are piecewise constant. The performance achieved by the optimal control and the sub-optimal control policies are compared with the cases of control using only insecticides when Breteau Index is greater or equal to 5 and the case of no-control. The results show that the sub-optimal policy yields a substantial reduction in the cost, in terms of the proposed functional, and is only slightly inferior to the optimal control policy. Copyright (C) 2001 John Wiley & Sons, Ltd.

Financial constraints on economic development: Theory and policy for developing countries

This article contains a theoretical and policy analysis of the financial constraints on economic development in developing countries. Following a Keynesian interpretation, it concludes that financial policies are needed to relieve these constraints, given the natural tendency of financial systems to operate in ways that are dysfunctional to economic development. It then proposes three lines of policy that take account of the special characteristics of developing countries: resource allocation policies targeted at segments of strategic importance for economic and financial development; policies to control financial and external fragility; and compensatory policies of a more interventionist cast, in particular directed credit programmes for both public- and private-sector lending to complement resource allocation policies, and countercyclical regulatory barriers so that fragility can be better controlled.

Postural control parameters in elderly female fallers and non-fallers diagnosed or not with knee osteoarthritis

Objectives: To compare stabilometric parameters of elderly female fallers and non-fallers associated or not with knee osteoarthritis (OA). Methods: Fifty-six elderly female fallers and non-fallers diagnosed or not with unilateral or bilateral knee OA were divided into the following groups: FOA (n = 10), elderly female falters with knee OA; FNOA (n = 11), elderly female fallers without knee OA; NFOA (n = 14), elderly female non-fallers with knee OA; and NFNOA (n = 21), elderly female non-fallers without knee OA. For analyzing semi-static balance on a force platform with the elderly females standing, the following parameters were assessed in four conditions: center of pressure (COP), anterior-posterior and mediolateral displacements (APD and MLD, respectively); and COP anterior-posterior and mediolateral displacement velocities (APV and MLV, respectively). The following conditions were assessed: 1) standing on a firm wooden surface with eyes open (WSEO); 2) standing on a firm wooden surface with eyes closed (WSEC); 3) standing on a foam surface with eyes open (FSEO); 4) standing on a foam surface with eyes closed (FSEC). Results: The elderly females with knee OA showed greater APD in all four conditions assessed (P < 0.05), while the elderly female fallers showed greater MLD (P < 0.05). No difference between the groups was observed for APV and MLV (P > 0.05). Conclusions: Knee OA per se increases APD of the COP, while the history of falls, regardless of the presence of knee OA, hinders postural control in the ML direction.

Effectiveness of the polysaccharide pneumococcal vaccine among HIV-infected persons in Brazil: a case control study

Abstract Background Polysaccharide pneumococcal vaccine is recommended for use in HIV-infected adults in Brazil but there is uncertainty about its effectiveness in this patient population. The main objective of this study was to assess the effectiveness of the 23-valent polysaccharide pneumococcal vaccine against invasive pneumococcal infection among HIV-infected adult patients in São Paulo, Brazil. Methods A case-control study of 79 cases and 242 controls matched on CD4+ cell count and health care setting was conducted. Among HIV-infected adults in São Paulo, Brazil, with and without S. pneumoniae recovered from a normally sterile site; prior receipt of 23 valent polysaccharide pneumococcal vaccine was determined by review of medical records and patient interview. Results After adjustment for confounding factors, the point estimate for the effectiveness of 23 valent polysaccharide vaccine among HIV-infected adults against all invasive pneumococcal infection was 18% (95% CI: <0 to 62%). Conclusion We were unable to demonstrate a statistically significant protective effect of 23 valent polysaccharide against invasive pneumococcal infection vaccine among HIV-infected adults in Brazil. While the vaccine is relatively inexpensive and safe, its effectiveness among HIV-infected adults in Brazil is uncertain.

The need of a weight management control program in judo: a proposal based on the successful case of wrestling

Judo competitions are divided into weight classes. However, most athletes reduce their body weight in a few days before competition in order to obtain a competitive advantage over lighter opponents. To achieve fast weight reduction, athletes use a number of aggressive nutritional strategies so many of them place themselves at a high health-injury risk. In collegiate wrestling, a similar problem has been observed and three wrestlers died in 1997 due to rapid weight loss regimes. After these deaths, the National Collegiate Athletic Association had implemented a successful weight management program which was proven to improve weight management behavior. No similar program has ever been discussed by judo federations even though judo competitors present a comparable inappropriate pattern of weight control. In view of this, the basis for a weight control program is provided in this manuscript, as follows: competition should begin within 1 hour after weigh-in, at the latest; each athlete is allowed to be weighed-in only once; rapid weight loss as well as artificial rehydration (i.e., saline infusion) methods are prohibited during the entire competition day; athletes should pass the hydration test to get their weigh-in validated; an individual minimum competitive weight (male athletes competing at no less than 7% and females at no less than 12% of body fat) should be determined at the beginning of each season; athletes are not allowed to compete in any weight class that requires weight reductions greater than 1.5% of body weight per week. In parallel, educational programs should aim at increasing the athletes', coaches' and parents' awareness about the risks of aggressive nutritional strategies as well as healthier ways to properly manage body weight.