Productivity growth and biased technological change : Credit banks in Japan

This paper investigates the productivity change of Japanese credit banks with a Malmquist index and the input technological bias during 2000-2006. Our results indicate that the traditional growth accounting method, which assumes Hicks neutral technological change, is not appropriate for analyzing changes in productivity. Our analysis unambiguously shows that management of Shinkin banks has to be improved. These must be based on the improvement of technical efficiency and/or technological change, emulating the procedures of the best-practice banks, i.e., those banks with Malmquist productivity scores higher than one and simultaneously with technical efficiency and technological change higher than one.

Corporate credit risk prediction under stochastic volatility and jumps

This paper examines the impact of allowing for stochastic volatility and jumps (SVJ) in a structural model on corporate credit risk prediction. The results from a simulation study verify the better performance of the SVJ model compared with the commonly used Merton model, and three sources are provided to explain the superiority. The empirical analysis on two real samples further ascertains the importance of recognizing the stochastic volatility and jumps by showing that the SVJ model decreases bias in spread prediction from the Merton model, and better explains the time variation in actual CDS spreads. The improvements are found particularly apparent in small firms or when the market is turbulent such as the recent financial crisis.

Do Students Not Care about Extra Credit Opportunities? Investigating Student Perceptions of Extra Credit Value vs. Effort

Giving “extra credit” work to students has been a controversial and hotly debated pedagogical issue for the last 20 years (Blood et al. 1993; Groves 2000; Muztaba Fuad and Jones 2012; Norcross et al. 1989; Weimer 2011). Previous work has focused on the faculty perspective discussing benefits and drawbacks associated with extra credit work (e.g. Hill et al. 1993; Norcross et al. 1989). Other scholars have investigated the use and effects of pop quizzes and other extra credit assignments on students’ final grades (Thorne 2000; Oley 1993). Some authors have criticized that the empirical exploration of understanding students’ motivational and performance efforts remains scarce and “rarely appears in the literature” (Mays and Bower 2005, p. 1). Besides a gap of empirical work it further appears that most existing studies stem from Psychology or Information Science. Yet it is surprising that, even though the topic of extra credit is considered a common practice in marketing education (Ackerman and Kiesler 2007), there is a wide gap within the marketing education literature. For example, a quick search in the Journal of Marketing Education for the keyword “extra credit” shows only 25 search results; yet none of those papers address motivational or performance effects of extra credit. A further search in Marketing Education Review yielded no results at all. To the authors’ knowledge, the topic has only been addressed once by Ackerman and Kiesler in the 2007 MEA Proceedings who conclude that for “such a common part of the marketing education curriculum, we know surprisingly little about its impact on students” (p. 123).

Petition for Artist Cards

This work was a interactive object piece that was installed at West Space as part of the 'Conceted Efforts' exhibition. Three clipboards hosted a petition addressed to Australian Museum Directors urging them to accept this artist card in lieu of payment when artists visit their institution, a list of potential elements of proof of position as an Australian artist, and an example of the artist card. The work explored the potential for collaboration between artists and institutions and explored the value of artists in the contemporary art world.

The credit risk(+) model with general sector correlations

We consider an enhancement of the credit risk+ model to incorporate correlations between sectors. We model the sector default rates as linear combinations of a common set of independent variables that represent macro-economic variables or risk factors. We also derive the formula for exact VaR contributions at the obligor level.

Membership cards of Judith Rosenthal, Elma Rosenthal and Arthur Rosenthal to the Jüdischer Kulturbund Berlin Portraits Family

Digital Image

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.

Credit Default Swaps and Insurance: Against the Potts Opinion

Little attention has been given to the possibility that CDS transactions might be construed as insurance contracts in English law. This article challenges the widespread “Potts opinion”, which states that CDSs are not insurance, because they do not require the protection buyer to sustain a loss or to have an insurable interest in the subject matter. CDSs often do provide protection against loss that the buyer is exposed to; loss indemnity is not a necessary characterisation of an insurance contract; insurable interest does not form part of the definition of insurance, but is an additional requirement of valid insurance; and what matters is the substance not the form of the contract. The situation in the US and Australia is also briefly considered.