Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Generation of parabolic trajectories for current error space phasor similar to an SVPWM controller for control of switching frequency variation in current hysteresis PWM controlled IM drives

Switching frequency variation over a fundamental period is a major problem associated with hysteresis controller based VSI fed IM drives. This paper describes a novel concept of generating parabolic trajectories for current error space phasor for controlling the switching frequency variation in the hysteresis controller based two-level inverter fed IM drives. A generalized algorithm is developed to determine unique set of parabolic trajectories for different speeds of operation for any given IM load. Proposed hysteresis controller provides the switching frequency spectrum of inverter output voltage, similar to that of the constant switching frequency VC-SVPWM based IM drive. The scheme is extensively simulated and experimentally verified on a 3.7 kW IM drive for steady state and transient performance.

Theoretical foundations for multiple rendezvous of glowworm-inspired mobile agents with variable local-decision domains

We present the theoretical foundations for the multiple rendezvous problem involving design of local control strategies that enable groups of visibility-limited mobile agents to split into subgroups, exhibit simultaneous taxis behavior towards, and eventually rendezvous at, multiple unknown locations of interest. The theoretical results are proved under certain restricted set of assumptions. The algorithm used to solve the above problem is based on a glowworm swarm optimization (GSO) technique, developed earlier, that finds multiple optima of multimodal objective functions. The significant difference between our work and most earlier approaches to agreement problems is the use of a virtual local-decision domain by the agents in order to compute their movements. The range of the virtual domain is adaptive in nature and is bounded above by the maximum sensor/visibility range of the agent. We introduce a new decision domain update rule that enhances the rate of convergence by a factor of approximately two. We use some illustrative simulations to support the algorithmic correctness and theoretical findings of the paper.

Surface Ligand Population Controlled Oriented Attachment: A Case of CdS Nanowires

using two types of organic ligands having similar chemical structure but different physical properties and varying their dynamic population at the surface of zinc blende seed nanocrystals, self-assembled zinc blende semicircular-shaped bent nanowires of CdS are synthesized via a colloidal synthetic approach. It is found that the hydrophobic tail interaction of long-chain ligands puts strain on these thin nanowires (< 2 nm diameter) and bend them to some extent, forming strained nanowires.

Popular Matchings with Variable Job Capacities

We consider the problem of matching people to jobs, where each person ranks a subset of jobs in an order of preference, possibly involving ties. There are several notions of optimality about how to best match each person to a job; in particular, popularity is a natural and appealing notion of optimality. However, popular matchings do not always provide an answer to the problem of determining an optimal matching since there are simple instances that do not adroit popular matchings. This motivates the following extension of the popular rnatchings problem:Given a graph G; = (A boolean OR J, E) where A is the set of people and J is the set of jobs, and a list < c(1), c(vertical bar J vertical bar)) denoting upper bounds on the capacities of each job, does there exist (x(1), ... , x(vertical bar J vertical bar)) such that setting the capacity of i-th, job to x(i) where 1 <= x(i) <= c(i), for each i, enables the resulting graph to admit a popular matching. In this paper we show that the above problem is NP-hard. We show that the problem is NP-hard even when each c is 1 or 2.

Nonlinear measures of heart rate time series: influence of posture and controlled breathing

In this study, we investigated measures of nonlinear dynamics and chaos theory in regards to heart rate variability in 27 normal control subjects in supine and standing postures, and 14 subjects in spontaneous and controlled breathing conditions. We examined minimum embedding dimension (MED), largest Lyapunov exponent (LLE) and measures of nonlinearity (NL) of heart rate time series. MED quantifies the system's complexity, LLE predictability and NL, a measure of deviation from linear processes. There was a significant decrease in complexity (P<0.00001), a decrease in predictability (P<0.00001) and an increase in nonlinearity (P=0.00001) during the change from supine to standing posture. Decrease in MED, and increases in NL score and LLE in standing posture appear to be partly due to an increase in sympathetic activity of the autonomous nervous system in standing posture. An improvement in predictability during controlled breathing appears to be due to the introduction of a periodic component. (C) 2000 published by Elsevier Science B.V.

Surface diffusion driven nanoshell formation by controlled sintering of mesoporous nanoparticle aggregates

We report a general method for the synthesis of hollow structures of a variety of functional inorganics by partial sintering of mesoporous nanocrystal aggregates. The formation of a thin shell initiates the transport of mass from the interior leading to growth of the shell. The principles are general and the hollow structures thus produced are attractive for many applications including catalysis, drug delivery and biosensing.

Diesel Engine Driven Stand-Alone Variable Speed Constant Frequency Slip Ring Induction Generator - Theory and Experimental Results

The operation of a stand-alone, as opposed to grid connected generation system, using a slip-ring induction machine as the electrical generator, is considered. In contrast to an alternator, a slip-ring induction machine can run at variable speed and still deliver constant frequency power to loads. This feature enables optimization of the system when the prime mover is inherently variable speed in nature eg. wind turbines, as well as diesel driven systems, where there is scope for economizing on fuel consumption. Experimental results from a system driven by a 44 bhp diesel engine are presented. Operation at subsynchronous as well as super-synchronous speeds is examined. The measurement facilitates the understanding of the system as well as its design.

Simplified Analysis of Steady-State Performance of a Voltage Controlled Induction Motor Drive

Utilizing a circuit model [1, 2] of an induction motor, a simplified analysis of steady state performance of a voltage controlled induction motor (VCIM) drive is described in this paper. By solving a set of nonlinear algebraic equations which describe the VCIM drive under steady operation, the operating variables such as constant components of torque, rotor flux linkages, fundamental components of stator voltage and current and phase angle are obtained for any given value of slip, triggering angle and supply voltage.

Controlled photoluminescence from self-assembled semiconductor-metal quantum dot hybrid array films

Thin films of hybrid arrays of cadmium selenide quantum dots and polymer grafted gold nanoparticles have been prepared using a BCP template. Controlling the dispersion and location of the respective nanoparticles allows us to tune the exciton-plasmon interaction in such hybrid arrays and hence control their optical properties. The observed photoluminescence of the hybrid array films is interpreted in terms of the dispersion and location of the gold nanoparticles and quantum dots in the block copolymer matrix.

Polarization Caging in Diffusion-Controlled Electron Transfer Reactions in Solution

In some bimolecular diffusion-controlled electron transfer (ET) reactions such as ion recombination (IR), both solvent polarization relaxation and the mutual diffusion of the reacting ion pair may determine the rate and even the yield of the reaction. However, a full treatment with these two reaction coordinates is a challenging task and has been left mostly unsolved. In this work, we address this problem by developing a dynamic theory by combining the ideas from ET reaction literature and barrierless chemical reactions. Two-dimensional coupled Smoluchowski equations are employed to compute the time evolution of joint probability distribution for the reactant (P-(1)(X,R,t)) and the product (p((2))(X,R,t)), where X, as is usual in ET reactions, describes the solvent polarization coordinate and R is the distance between the reacting ion pair. The reaction is described by a reaction line (sink) which is a function of X and R obtained by imposing a condition of equal energy on the initial and final states of a reacting ion pair. The resulting two-dimensional coupled equations of motion have been solved numerically using an alternate direction implicit (ADI) scheme (Peaceman and Rachford, J. Soc. Ind. Appl. Math. 1955, 3, 28). The results reveal interesting interplay between polarization relaxation and translational dynamics. The following new results have been obtained. (i) For solvents with slow longitudinal polarization relaxation, the escape probability decreases drastically as the polarization relaxation time increases. We attribute this to caging by polarization of the surrounding solvent, As expected, for the solvents having fast polarization relaxation, the escape probability is independent of the polarization relaxation time. (ii) In the slow relaxation limit, there is a significant dependence of escape probability and average rate on the initial solvent polarization, again displaying the effects of polarization caging. Escape probability increases, and the average rate decreases on increasing the initial polarization. Again, in the fast polarization relaxation limit, there is no effect of initial polarization on the escape probability and the average rate of IR. (iii) For normal and barrierless regions the dependence of escape probability and the rate of IR on initial polarization is stronger than in the inverted region. (iv) Because of the involvement of dynamics along R coordinate, the asymmetrical parabolic (that is, non-Marcus) energy gap dependence of the rate is observed.

Controlled Diffusions with Constraints, II

We consider the ergodic control for a controlled nondegenerate diffusion when m other (m finite) ergodic costs are required to satisfy prescribed bounds. Under a condition on the cost functions that penalizes instability, the existence of an optimal stable Markov control is established by convex analytic arguments.