Tied aid, unemployment and welfare

The effect of foreign aid on the welfare levels of both the recipient and the donor country has been a much analysed topic for research in both the theory of international trade and development economics. In the development economics literature, concerns have been raised since the 1960s on the possible adverse effect of foreign aid on domestic savings and growth.1 The trade theory literature in this respect is much older and dates back to the 1920s when Professors Keynes and Ohlin debated on the effect of foreign aid on international terms of trade.2 Ever since, the terms of trade effect has been the cornerstone in the analysis of the welfare effect of foreign aid in the trade theory literature.3 After some early confusion, it is now well established that in a Walrasian stable world economy with two countries, a necessary condition for foreign aid to have perverse effects is that there is some distortion in either of the two countries.4 It is also known that, under normality and substitutability of goods, untied aid cannot be strictly Pareto-improving in a tariff distorted world.5

Welfare effects of aid under quantitative trade restrictions

The paper examines the effects of tied-aid on the welfare of both the donor and the recipient countries. We depart from the previous literature by assuming preexistence of quantitative trade distortions. To mitigate these distortions the donor country provides aid that is tied to the rationed good. Conditions for the presence of the transfer paradox and of the enrichment of both countries are derived and interpreted under the stability of the system. Furthermore, we show that whereas untied aid cannot increase global welfare, tied-aid unambiguously does so.

Lowering grain boundary resistance of BaZr0.8Y0.2O3−δ with LiNO3 sintering-aid improves proton conductivity for fuel cell operation

A novel sintering additive based on LiNO3 was used to overcome the drawbacks of poor sinterability and low grain boundary conductivity in BaZr0.8Y0.2O3-δ (BZY20) protonic conductors. The Li-additive totally evaporated during the sintering process at 1600°C for 6 h, which led to highly dense BZY20 pellets (96.5% of the theoretical value). The proton conductivity values of BZY20 with Li sintering-aid were significantly larger than the values reported for BZY sintered with other metal oxides, due to the fast proton transport in the "clean" grain boundaries and grain interior. The total conductivity of BZY20-Li in wet Ar was 4.45 × 10-3 S cm-1 at 600°C. Based on the improved sinterability, anode-supported fuel cells with 25 μm-thick BZY20-Li electrolyte membranes were fabricated by a co-firing technique. The peak power density obtained at 700°C for a BZY-Ni/BZY20-Li/La0.6Sr0.4Co0.2Fe 0.8O3-δ (LSCF)-BZY cell was 53 mW cm-2, which is significantly larger than the values reported for fuel cells using electrolytes made of BZY sintered with the addition of ZnO and CuO, confirming the advantage of using Li as a sintering aid.

Financial liberalization and sectoral reallocation of capital in South Africa

We examine the impact of financial reforms on efficient reallocation of capital within and between sectors in South Africa using firm-level panel data for the period 1991–2008. The measure of efficient allocation of capital is based on the Tobin’s Q. We find that financial reforms are associated with improvements in within-sector, but not between-sector allocation of capital. These results imply that for South Africa to unleash the potential for take-off that is often associated with reallocation of resources from the primitive to modern sectors, reforms that focus beyond the financial sector are necessary. While more research is necessary to determine what would fully constitute such additional reforms, our analysis shows that reforms that improve the quality of economic institutions may be a step in the right the direction.

Relationship between quality certification and financial and non-financial performance of organizations

At present, many countries have either embraced ISO9001 or used it as the basis of their national quality certification systems. However, few studies have been conducted to examine the benefits companies’ gain from achieving and implementing ISO9001 standards (Chikuku et al. 2012; Psomas et al. 2013; Sampaio et al. 2011a,b). Analysis has brought much more confused and uneven results across the countries. Turning to the experience of Malaysia, this country has witnessed a spectacular growth at an average rate of 9.89% per annum of ISO certificates issued to companies operating within its borders (ISO Survey 2012). While many companies rush to be ISO 9001 certified whether this brings about better benefits (both the financial and the non-financial) is still an open question. In this study, the research problems were first formulated from the literature and then a questionnaire survey was conducted to test the hypotheses. A survey was administered to chief executives officers and managers across manufacturing and service organizations in Malaysia. Multivariate analysis and SPSS macro developed by Preacher and Hayes were used as statistical techniques to the financial and non-financial benefits of ISO9001 certification. The survey instrument was a two-page questionnaire comprising three sections. The first section of the questionnaire covered the company’s profile. The second section consisted of 25 items on internal benefits and third section consisted of 7 items on external benefits measured on 1–5 Likert scale to assess the benefits of ISO9001 certification. Total 201 valid responses were received. Results of the study indicate that there was no significant direct relationship between ISO9001 certification and organizational financial performance, while strong statistical evidence was found to support the direct relationship between ISO9001 certification and non-financial performance. The findings of the study discovered that financial performance is actually directly related to two non-financial measures, namely quality performance and local and international business performance, which are directly and significantly influenced by ISO9001 certification. Therefore non-financial performance measures are involved in the mediational process. The findings will assist practitioners in taking right courses of action that make the implementation of this standard more effective. For example, the study findings study suggests that companies should put emphasize on nonfinancial factors to improve their financial performance.

Field placement and the impact of financial stress on social work and human services students

While significant research has been undertaken exploring the pedagogical benefits of undertaking lengthy social work and human services field placements, there has been very little consideration regarding the potential financial stress involved for students. This study has addressed this knowledge gap. Research was conducted in 2014 using quantitative and qualitative methods with students, academic and professional staff from six Queensland Universities. The findings show a significant relationship between unpaid placements and financial hardship creating considerable stress for students and at times a compromised learning experience whilst on placement. The limited flexibility in the requirements of professional bodies and universities for how placements are undertaken has been identified as a key contributor to financial hardship. Addressing the complexities inherent in this issue requires a collaborative effort from multiple stakeholders and should not be regarded as a problem for students to endure and manage.

How can a Bourdieusian perspective aid the analysis of MBA education?

There is a lack of integrative conceptual models that would help to better understand the underlying reasons for the alleged problems of MBA education. To address this challenge, we draw on the work of Pierre Bourdieu to examine MBA education as an activity with its own ‘economy of exchange’ and ‘rules of the game.’ We argue that application of Bourdieu’s theoretical ideas elucidates three key issues in debate around MBA education: the outcomes of MBA programs, the inculcation of potentially problematic values and practices through the programs, and the potential of self-regulation such as accreditation and ranking for impeding development of MBA education. First, Bourdieu’s notions of capital – intellectual, social and symbolic – shed light on the ‘economy of exchange’ in MBA education. Critics of MBA programs have pointed out that the value of MBA degrees lies not only in ‘learning.’ Bourdieu’s framework allows further analysis of this issue by distinguishing between intellectual (learning), social (social networks), and symbolic capital (credentials and prestige). Second, the concept of ‘habitus’ suggests how values and practices are inculcated through MBA education. This process is often a ‘voluntary’ one where problematic or ethically questionable ideas may be regarded as natural. Third, Bourdieu’s reflections on the ‘doxa’ and its reproduction and legitimation illuminate the role of accreditation and ranking in MBA education. An analysis of such self-regulation explains in part how the system may turn out impeding change.

Essays on the Linkages Between Financial Markets, and Risk Asymmetries (summary section only)

During the last few decades there have been far going financial market deregulation, technical development, advances in information technology, and standardization of legislation between countries. As a result, one can expect that financial markets have grown more interlinked. The proper understanding of the cross-market linkages has implications for investment and risk management, diversification, asset pricing, and regulation. The purpose of this research is to assess the degree of price, return, and volatility linkages between both geographic markets and asset categories within one country, Finland. Another purpose is to analyze risk asymmetries, i.e., the tendency of equity risk to be higher after negative events than after positive events of equal magnitude. The analysis is conducted both with respect to total risk (volatility), and systematic risk (beta). The thesis consists of an introductory part and four essays. The first essay studies to which extent international stock prices comove. The degree of comovements is low, indicating benefits from international diversification. The second essay examines the degree to which the Finnish market is linked to the “world market”. The total risk is divided into two parts, one relating to world factors, and one relating to domestic factors. The impact of world factors has increased over time. After 1993, when foreign investors were allowed to freely invest in Finnish assets, the risk level has been higher than previously. This was also the case during the economic recession in the beginning of the 1990’s. The third essay focuses on the stock, bond, and money markets in Finland. According to a trading model, the degree of volatility linkages should be strong. However, the results contradict this. The linkages are surprisingly weak, even negative. The stock market is the most independent, while the money market is affected by events on the two other markets. The fourth essay concentrates on volatility and beta asymmetries. Contrary to many international studies there are only few cases of risk asymmetries. When they occur, they tend to be driven by the market-wide component rather than the portfolio specific element.

Essays on Financial Analyst Forecasts and Recommendations

The trade of the financial analyst is currently a much-debated issue in today’s media. As a large part of the investment analysis is conducted under the broker firms’ regime, the incentives of the financial analyst and the investor do not always align. The broker firm’s commercial incentives may be to maximise its commission from securities trading and underwriting fees. The purpose of this thesis is to extend our understanding of the work of a financial analyst, the incentives he faces and how these affect his actions. The first essay investigates how the economic significance of the coverage of a particular firm impacts the analysts’ accuracy of estimation. The hypothesis is that analysts put more effort in analysing firms with a relatively higher trading volume, as these firms usually yield higher commissions. The second essay investigates how analysts interpret new financial statement information. The essay shows that analysts underreact or overreact to prior reported earnings, depending on the short-term pattern in reported earnings. The third essay investigates the possible investment value in Finnish stock recommendations, issued by sell side analysts. It is established that consensus recommendations issued on Finnish stocks contain investment value. Further, the investment value in consensus recommendations improves significantly through the exclusion of recommendations issued by banks. The fourth essay investigates investors’ behaviour prior to financial analysts’ earnings forecast revisions. Lately, the financial press have reported cases were financial analysts warn their preferred clients of possible earnings forecast revisions. However, in the light of the empirical results, it appears that the problem of analysts leaking information to some selected customers does not appear systematically on the Finnish stock market.

Value Creation in Professional Service Processes. Propositions for Understanding Financial Value from a Customer Perspective

Many service management studies have suggested that service providers benefit from having long-term relationships with customers, but the argument from a customer perspective has been vague. However, especially in the business-to-business context, an analysis of financial value creation seems appropriate also from a customer perspective. Hence, the aim of this study is to develop a framework for understanding monetary value creation in professional service assignments from a customer perspective. The contribution of this study is an improved insight and framework for understanding financial value creation from a customer perspective in a professional service delivery process. The sources for monetary differences between transactional and long-term service providers are identified and quantified in case settings. This study contributes to the existing literature in service and relationship management by extending the customer’s viewpoint from perceived value to measurable monetary value. The contribution to the professional services lies in the process focus as opposed to the outcome focus, which is often accentuated in the existing professional services literature. The findings from the qualitative data suggest that a customer company may benefit from having an improved understanding of the service delivery (service assignment) process and the factors affecting the monetary value creation during the process. It is suggested that long-term relationships with service providers create financial value in the case settings in the short term. The findings also indicate that by using the improved understanding, a customer company can make more informed decisions when selecting a service provider for a specific assignment. Mirel Leino is associated with CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration