Modelling foreign direct investment in China

This thesis consists of three empirical and one theoretical studies. While China has received an increasing amount of foreign direct investment (FDI) and become the second largest host country for FDI in recent years, the absence of comprehensive studies on FDI inflows into this country drives this research. In the first study, an econometric model is developed to analyse the economic, political, cultural and geographic determinants of both pledged and realised FDI in China. The results of this study suggest that China's relatively cheaper labour force, high degree of international integration with the outside world (represented by its exports and imports) and bilateral exchange rates are the important economic determinants of both pledged FDI and realised FDI in China. The second study analyses the regional distribution of both pledged and realised FDI within China. The econometric properties of the panel data set are examined using a standardised 't-bar' test. The empirical results indicate that provinces with higher level of international trade, lower wage rates, more R&D manpower, more preferential policies and closer ethnic links with overseas Chinese attract relatively more FDI. The third study constructs a dynamic equilibrium model to study the interactions among FDI, knowledge spillovers and long run economic growth in a developing country. The ideas of endogenous product cycles and trade-related international knowledge spillovers are modified and extended to FDI. The major conclusion is that, in the presence of FDI, economic growth is determined by the stock of human capital, the subjective discount rate and knowledge gap, while unskilled labour can not sustain growth. In the fourth study, the role of FDI in the growth process of the Chinese economy is investigated by using a panel of data for 27 provinces across China between 1986 and 1995. In addition to FDI, domestic R&D expenditure, international trade and human capital are added to the standard convergence regressions to control for different structural characteristics in each province. The empirical results support endogenous innovation growth theory in which regional per capita income can converge given technological diffusion, transfer and imitation.

Genome-wide analysis identifies a general requirement for polarity proteins in endocytic traffic

In a genome-wide RNA-mediated interference screen for genes required in membrane traffic - including endocytic uptake, recycling from endosomes to the plasma membrane, and secretion - we identified 168 candidate endocytosis regulators and 100 candidate secretion regulators. Many of these candidates are highly conserved among metazoans but have not been previously implicated in these processes. Among the positives from the screen, we identified PAR-3, PAR-6, PKC-3 and CDC-42, proteins that are well known for their importance in the generation of embryonic and epithelial-cell polarity. Further analysis showed that endocytic transport in Caenorhabditis elegans coelomocytes and human HeLa cells was also compromised after perturbation of CDC-42/Cdc42 or PAR-6/Par6 function, indicating a general requirement for these proteins in regulating endocytic traffic. Consistent with these results, we found that tagged CDC-42/Cdc42 is enriched on recycling endosomes in C. elegans and mammalian cells, suggesting a direct function in the regulation of transport.

Testing term structure estimation methods:evidence from the UK STRIPs market

Prices and yields of UK government zero-coupon bonds are used to test alternative yield curve estimation models. Zero-coupon bonds permit a more pure comparison, as the models are providing only the interpolation service and also not making estimation feasible. It is found that better yield curves estimates are obtained by fitting to the yield curve directly rather than fitting first to the discount function. A simple procedure to set the smoothness of the fitted curves is developed, and a positive relationship between oversmoothness and the fitting error is identified. A cubic spline function fitted directly to the yield curve provides the best overall balance of fitting error and smoothness, both along the yield curve and within local maturity regions.

The influence of political, economic and passenger market factors on international civil aviation

Civil aviation plays an essential role in maintaining international communications. Many extraneous factors influence the daily operations of the air transport industry. This thesis begins by investigating the major categories of so­ called "external interests" in civil aviation. These are shown to have played a significant part in ensuring the need for international agreement over the adoption of regulating principles. The combination and interaction of the various influences has produced a particular type of regulatory environment in which all commercial air services have to operate. The need for such regulation and the extreme difficulty experienced in trying to define universally acceptable methods of supervision is discussed. It is shown how opportunity for the development of on-scheduled air services was created by default on the part of the European Governments.The concept of so-called "scheduled" and "non-scheduled" sectors" is considered and it is suggested that growth of the inclusive tour industry resulted from inappropriate categorisation of the air services involved. The means by which development opportunities were created for inclusive tour operations is considered and the work then investigates the importance of British air transport policy in their exploitation. The politics of British civil aviation in the post-war years is the subject of detailed examination and the process by which Independent airlines were encouraged to develop inclusive tours, is identified. This theme is expanded to demonstrate the vital contribution of British air transport policy in the restructuring of the international industry. The subsequent involvement of the United States is shown to have been directed specifically towards the satisfaction of domestic issues. British objectives, however, are considered to have been more generally concerned with improving the tariff structure. The unique opportunities for British experimentation with international fares are seen to have major influence in forcing the pace of tariff rationalisation.

Energy saving and solar electricity in fan-ventilated greenhouses

Greenhouse cultivation is an energy intensive process therefore it is worthwhile to introduce energy saving measures and alternative energy sources. Here we show that there is scope for energy saving in fan ventilated greenhouses. Measurements of electricity usage as a function of fan speed have been performed for two models of 1.25 m diameter greenhouse fans and compared to theoretical values. Reducing the speed can cut the energy usage per volume of air moved by more than 70%. To minimize the capital cost of low-speed operation, a cooled greenhouse has been built in which the fan speed responds to sunlight such that full speed is reached only around noon. The energy saving is about 40% compared to constant speed operation. Direct operation of fans from solar-photovoltaic modules is also viable as shown from experiments with a fan driven by a brushless DC motor. On comparing the Net Present Value costs of the different systems over a 10 year amortization period (with and without a carbon tax to represent environmental costs) we find that sunlight-controlled system saves money under all assumptions about taxation and discount rates. The solar-powered system, however, is only profitable for very low discount rates, due to the high initial capital costs. Nonetheless this system could be of interest for its reliability in developing countries where mains electricity is intermittent. We recommend that greenhouse fan manufacturers improve the availability of energy-saving designs such as those described here.

Accommodating energy price volatility in life cycle cost analysis of asphalt pavements

Energy price is related to more than half of the total life cycle cost of asphalt pavements. Furthermore, the fluctuation related to price of energy has been much higher than the general inflation and interest rate. This makes the energy price inflation an important variable that should be addressed when performing life cycle cost (LCC) studies re- garding asphalt pavements. The present value of future costs is highly sensitive to the selected discount rate. Therefore, the choice of the discount rate is the most critical element in LCC analysis during the life time of a project. The objective of the paper is to present a discount rate for asphalt pavement projects as a function of interest rate, general inflation and energy price inflation. The discount rate is defined based on the portion of the energy related costs during the life time of the pavement. Consequently, it can reflect the financial risks related to the energy price in asphalt pavement projects. It is suggested that a discount rate sensitivity analysis for asphalt pavements in Sweden should range between –20 and 30%.

Customer loyalty among daily disposable contact lens wearers

Background: Optometric practices offer contact lenses as cash sale items or as part of monthly payment plans. With the contact lens market becoming increasingly competitive, patients are opting to purchase lenses from supermarkets and Internet suppliers. Monthly payment plans are often implemented to improve loyalty. This study aimed to compare behavioural loyalty between monthly payment plan members and non-members. Methods: BBR Optometry Ltd offers a monthly payment plan (Eyelife™) to their contact lens wearers. A retrospective audit of 38 Eyelife™ members (mean. ±. SD: 42.7. ±. 15.0 years) and 30 non-members (mean. ±. SD: 40.8. ±. 16.7 years) was conducted. Revenue and profits generated, service uptake and product sales between the two groups were compared over a fixed period of 18 months. Results: Eyelife™ members generated significantly higher professional fee revenue ( P<. 0.001), £153.96 compared to £83.50, and profits ( P<. 0.001). Eyelife™ members had a higher uptake of eye examinations ( P<. 0.001). The 2 groups demonstrated no significant difference in spectacle sales by volume ( P= 0.790) or value ( P= 0.369). There were also no significant differences in contact lens revenue ( P= 0.337), although Eyelife™ members did receive a discount. The Eyelife™ group incurred higher contact lens costs ( P= 0.037), due to a greater volume of contact lens purchases, 986 units compared to 582. Conclusions: Monthly payment plans improve loyalty among contact lens wearers, particularly service uptake and volume of lens purchases. Additionally the greater professional fees generated, render monthly payment plans an attractive business model and practice builder.

Debazzled:a blue and black ship, dressed to deceive

The blue and black dress that “melted the Internet” is thought to have done so because its perceived color depended on people using different prior assumptions about discounting the illuminant. However, this is not the first monochromatic object to have confused the public. For a brief period during WWI, RMS Mauretania was dressed in (dazzle) camouflage shades of blue and black/grey, yet she is sometimes depicted by artists, modelers, and historians in a much showier dress of red, blue, yellow, green, and black. I raise the possibility that this originates from a case of public deception deriving from the momentary misperception of a playful artist who neglected to discount the illuminant, propagating the most (perhaps only) successful application of dazzle camouflage known.

Discretion in accounting for pensions under IAS 19:using the ‘magic telescope’?

We use a panel data set of UK-listed companies over the period 2005–2009 to analyse the actuarial assumptions used to value pension plan liabilities under IAS 19. The valuation process requires companies to make assumptions about financial and demographic variables, notably discount rate, price inflation, salary inflation and mortality/life expectancy of plan members/beneficiaries. We use regression analysis to analyse the relationships between these key assumptions (except mortality, where disclosures are limited) and company-specific factors such as the pension plan funding position and duration of pension liabilities. We find evidence of selective ‘management’ of the three assumptions investigated, although the nature of this appears to differ from the findings of US authors. We conclude that IAS 19 does not prevent the use of managerial discretion, particularly by companies whose pension plan funding positions are weak, thereby reducing the representational faithfulness of the reported pension figures. We also highlight that the degree of discretion used reflects the extent to which IAS 19 defines how the assumptions are to be determined. We therefore suggest that companies should be encouraged to justify more explicitly their choice of assumptions.

Az on-line vásárlás vevői elfogadottsága Magyarországon (Adoption of on-line commerce in Hungary)

A hazai internethasználat terjedésével egyre népszerűbbek az on-line kereskedelmi modellek, egyre több cég kísérli meg, hogy terméket vagy szolgáltatást értékesítsen az interneten. Például az on-line könyvértékesítések és a diszkont légitársaságok jegyeladásai az e-kereskedelem kiugró ágazatai közé tartoznak – ez a hasonlóság adja a tanulmány alapját. Dinamikusan növekvő keresleti igények honorálják az internetes megjelenést, és fordítva: a fogyasztói e-felkészültséget gyakran a kínálati oldal indukálja. A szerzők kutatásukban a hazai internethasználat bemutatásával és fókuszcsoportos beszélgetések révén próbálják meg feltárni, hogy mi minden szükséges ahhoz, hogy valódi alternatívát jelentsen az on-line kereskedelem a vevők számára. Kísérletet tesznek a keresleti oldal átfogó bemutatására, hasonlóságokra és különbségekre fókuszálva, valamint szintén összevetik a kínálati oldal jellemző karaktereit, ezek egyezőségeit és eltéréseit vizsgálva. ______________ With the spreading of Hungarian internet usage online e-commerce models have become more and more popular, more and more companies start to sell products and services via the internet. For instance the on-line book sales and purchase of discount airline tickets belong to the leading branches of e-business and demonstrate that dynamically increasing demand generates supply. In this research first the authors introduces the basic data about internet usage in Hungary. Then, based on a series of focused group discussions they examine what the key customer requirements are to really consider e-commerce as a serious alternative for traditional shopping. They attempt to describe the demand side and juxtapose it with the characteristics of the supply side of Hungarian e-commerce.

A study of stock market fluctuations and their relation to business conditions

Most research on stock prices is based on the present value model or the more general consumption-based model. When applied to real economic data, both of them are found unable to account for both the stock price level and its volatility. Three essays here attempt to both build a more realistic model, and to check whether there is still room for bubbles in explaining fluctuations in stock prices. In the second chapter, several innovations are simultaneously incorporated into the traditional present value model in order to produce more accurate model-based fundamental prices. These innovations comprise replacing with broad dividends the more narrow traditional dividends that are more commonly used, a nonlinear artificial neural network (ANN) forecasting procedure for these broad dividends instead of the more common linear forecasting models for narrow traditional dividends, and a stochastic discount rate in place of the constant discount rate. Empirical results show that the model described above predicts fundamental prices better, compared with alternative models using linear forecasting process, narrow dividends, or a constant discount factor. Nonetheless, actual prices are still largely detached from fundamental prices. The bubblelike deviations are found to coincide with business cycles. The third chapter examines possible cointegration of stock prices with fundamentals and non-fundamentals. The output gap is introduced to form the nonfundamental part of stock prices. I use a trivariate Vector Autoregression (TVAR) model and a single equation model to run cointegration tests between these three variables. Neither of the cointegration tests shows strong evidence of explosive behavior in the DJIA and S&P 500 data. Then, I applied a sup augmented Dickey-Fuller test to check for the existence of periodically collapsing bubbles in stock prices. Such bubbles are found in S&P data during the late 1990s. Employing econometric tests from the third chapter, I continue in the fourth chapter to examine whether bubbles exist in stock prices of conventional economic sectors on the New York Stock Exchange. The ‘old economy’ as a whole is not found to have bubbles. But, periodically collapsing bubbles are found in Material and Telecommunication Services sectors, and the Real Estate industry group.

ALBA: A Political Tool for Venezuela’s Foreign Policy

Despite its founding by Hugo Chávez on the heels of the failed Free Trade Area for the Americas (FTAA) negotiations which took place November 2003, the Bolivarian Alliance for the Americas (ALBA, as it is known for its Spanish acronym) has evolved into a political tool that uses “social power” to facilitate Venezuela‟s positioning as the leader of the anti-U.S. agenda in the region. Fostering political favors and goodwill through the financing of social development projects, ALBA has created a political environment whereby countries on the take and their respective leaders seem deterred from taking public opposing viewpoints to Chávez. To that end, it has provided billions in economic aid to several nations in Latin American and the Caribbean, winning their favor and support for its policies. To date, ALBA counts on eight member nations. Besides Venezuela, it includes Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, and Saint Vincent and the Grenadines. It also has several observer nations, among them, Grenada, Haiti, Paraguay, Uruguay, and a non-Latin American country, Syria. Throughout its recent history Venezuela has used its oil wealth to pursue political capital. Under the Chávez government it is doing so as part of a strategic effort countering the U.S. Following Cuba‟s demise in the region as the anti-American socialist camp leader, Chávez is attempting to step into Cuba‟s shoes, picking up where Cuba left off over a decade ago and has used the ALBA as a mechanism to help promote his foreign policy. Relying on its own resources, not those of the Soviet Union as Cuba once did, Venezuela has already shown its influence in the international arena, challenging U.S. positions at the Organization of American States (OAS), the United Nations, and even in matters having little if nothing to do with the region, such as Iran‟s nuclear proliferation. Taking advantage of Venezuela‟s oil prices bonanza, Chávez has been spreading economic aid throughout the region, funding several development projects. From stepping in to buy Bolivia‟s soy beans when the U.S. ceased doing so, to helping finance and construct an airport in Dominica, Venezuela‟s ALBA has provided assistance to many states in the region. As in the past, Venezuela has invested significantly both in time and money in the Caribbean, providing development assistance and oil at a discount to Haiti, St. Kitts and Nevis, and the Dominican Republic, although the latter two are neither member nor observer states of ALBA. The aid Chávez has been spreading around may be coming at a cost. It seems it has begun to cause cracks within the CARICOM community, where ALBA already counts on six of its 15 members, leading experts and leaders in the region to question traditional alliances to each other and the U.S. Yet, ALBA‟s ability to influence through aid is dependent on the Venezuelan economy. Its success hinges on continued Venezuelan oil sales at stable prices and the ability of Chávez to remain in power.

Anarchy In The Airways

In his dialogue - Anarchy In The Airways - Joseph C. Von Kornfeld, Assistant Professor, College of Hotel Administration, University of Nevada, Las Vegas initially states: “Deregulation of the airline industry has brought about financial vulnerability for the traveling public. The author analyzes the situation since that point in time and makes recommendations for some solutions.” In this article, Assistant Professor Von Kornfeld, first defines the airline industry in its pre-regulated form. Then he goes into the ramifications and results of deregulating the industry, both in regards to the consumer, and in deregulation’s impact on the airlines themselves. “The most dramatic consequence of the pressures and turbulence of airline deregulation has been the unprecedented proliferation of airline bankruptcies,” Von Kornfeld informs. “Prior to the deregulation of the U.S. airline industry in 1978, U.S. air carriers operated in a business environment that was insulated from the normal stresses and strains of open competition. They were restricted from actively competing with fares and routings by the Civil Aeronautics Board (CAB),” Von Kornfeld says. In leveling the playing field, Von Kornfeld offers, “Each carrier was restricted to specific geographic routes, with those routes limited to two or three competing carriers. The only thing that set carriers apart in this CAB defined atmosphere was their ability to either advertise, or to enhance their level of service; or both. “…ultimately paid for by the passenger through fare increases sanctioned by the CAB,” Von Kornfeld states. “Airline service standards were unquestionably superior during the regulated environment,” Von Kornfeld renders an interesting observation. He does mention, however, that carrier safety was also considered a concern immediately prior to, and then after deregulation. “The major controversy focused on the allegation that safety and maintenance standards would be compromised due to the financial pressures brought about by an openly competitive environment,” Von Kornfeld says. Pricing, as well as labor unions are important factors in the equation, and Von Kornfeld addresses their relevance in the deregulated environment. “The primary rationalization for deregulation was to facilitate a more openly competitive environment. The increased competition was to ultimately have benefitted the consumer. Ironically, that’s not entirely the case, Von Kornfeld elaborates. In addressing some of the negative aspects of airline deregulation, Von Kornfeld suggests that some sort of federal re-regulation may be in order.

Official Airlines Assist Meeting Planners

Selecting an airline as the official one for a convention or meeting can save meeting planners time, money, and a lot of work. The author discusses ways in which airlines can work with conferences of all sizes.

Indirect Cost Factors In Menu Pricing

In the discussion - Indirect Cost Factors in Menu Pricing – by David V. Pavesic, Associate Professor, Hotel, Restaurant and Travel Administration at Georgia State University, Associate Professor Pavesic initially states: “Rational pricing methodologies have traditionally employed quantitative factors to mark up food and beverage or food and labor because these costs can be isolated and allocated to specific menu items. There are, however, a number of indirect costs that can influence the price charged because they provide added value to the customer or are affected by supply/demand factors. The author discusses these costs and factors that must be taken into account in pricing decisions. Professor Pavesic offers as a given that menu pricing should cover costs, return a profit, reflect a value for the customer, and in the long run, attract customers and market the establishment. “Prices that are too high will drive customers away, and prices that are too low will sacrifice profit,” Professor Pavesic puts it succinctly. To dovetail with this premise the author provides that although food costs measure markedly into menu pricing, other factors such as equipment utilization, popularity/demand, and marketing are but a few of the parenthetic factors also to be considered. “… there is no single method that can be used to mark up every item on any given restaurant menu. One must employ a combination of methodologies and theories,” says Professor Pavesic. “Therefore, when properly carried out, prices will reflect food cost percentages, individual and/or weighted contribution margins, price points, and desired check averages, as well as factors driven by intuition, competition, and demand.” Additionally, Professor Pavesic wants you to know that value, as opposed to maximizing revenue, should be a primary motivating factor when designing menu pricing. This philosophy does come with certain caveats, and he explains them to you. Generically speaking, Professor Pavesic says, “The market ultimately determines the price one can charge.” But, in fine-tuning that decree he further offers, “Lower prices do not automatically translate into value and bargain in the minds of the customers. Having the lowest prices in your market may not bring customers or profit. “Too often operators engage in price wars through discount promotions and find that profits fall and their image in the marketplace is lowered,” Professor Pavesic warns. In reference to intangibles that influence menu pricing, service is at the top of the list. Ambience, location, amenities, product [i.e. food] presentation, and price elasticity are discussed as well. Be aware of price-value perception; Professor Pavesic explains this concept to you. Professor Pavesic closes with a brief overview of a la carte pricing; its pros and cons.