Political Risk, Economic Integration, and the Foreign Direct Investment Decision

In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. We also consider the impact of economic integration upon FDI decisions. The paper follows the real options approach, which allows investigating the value to a firm of waiting to invest and/or disinvest, when payoffs are stochastic due to political uncertainty and investments are partially reversible. Across the board we find that political uncertainty can be very detrimental to FDI decisions while economic integration leads to an increasing benefit of investing abroad.

The role of attention in multisensory integration processes

Report for the scientific sojourn at the University of Queensland, Australia, between June to October 2007. The integration of sensory information coming from different modalities is a subjectively effortless and automatic process. However, recent findings converge on the idea that there might be some limitations on how much multisensory information can our brains integrate at a given moment. The overall objective of this research visit was to expand and reinforce our current line of research addressing the role that attention plays on the mechanisms responsible for multisensory integration. There is also a critical review of the literature as well as a list of research questions of potential interest in the area of the neuropsychology of multisensory attention.

Scheduling of straddle carriers in a container terminal

Report for the scientific sojourn at the University of California at Berkeley between September 2007 to February 2008. The globalization combined with the success of containerization has brought about tremendous increases in the transportation of containers across the world. This leads to an increasing size of container ships which causes higher demands on seaport container terminals and their equipment. In this situation, the success of container terminals resides in a fast transhipment process with reduced costs. For these reasons it is necessary to optimize the terminal’s processes. There are three main logistic processes in a seaport container terminal: loading and unloading of containerships, storage, and reception/deliver of containers from/to the hinterland. Moreover there is an additional process that ensures the interconnection between previous logistic activities: the internal transport subsystem. The aim of this paper is to optimize the internal transport cycle in a marine container terminal managed by straddle carriers, one of the most used container transfer technologies. Three sub-systems are analyzed in detail: the landside transportation, the storage of containers in the yard, and the quayside transportation. The conflicts and decisions that arise from these three subsystems are analytically investigated, and optimization algorithms are proposed. Moreover, simulation has been applied to TCB (Barcelona Container Terminal) to test these algorithms and compare different straddle carrier’s operation strategies, such as single cycle versus double cycle, and different sizes of the handling equipment fleet. The simulation model is explained in detail and the main decision-making algorithms from the model are presented and formulated.

Genetic diversity and differentiation processes in the ploidy series of Olea europaea L.: a multiscale approach from subspecies to insular populations.

Geographical isolation and polyploidization are central concepts in plant evolution. The hierarchical organization of archipelagos in this study provides a framework for testing the evolutionary consequences for polyploid taxa and populations occurring in isolation. Using amplified fragment length polymorphism and simple sequence repeat markers, we determined the genetic diversity and differentiation patterns at three levels of geographical isolation in Olea europaea: mainland-archipelagos, islands within an archipelago, and populations within an island. At the subspecies scale, the hexaploid ssp. maroccana (southwest Morocco) exhibited higher genetic diversity than the insular counterparts. In contrast, the tetraploid ssp. cerasiformis (Madeira) displayed values similar to those obtained for the diploid ssp. guanchica (Canary Islands). Geographical isolation was associated with a high genetic differentiation at this scale. In the Canarian archipelago, the stepping-stone model of differentiation suggested in a previous study was partially supported. Within the western lineage, an east-to-west differentiation pattern was confirmed. Conversely, the easternmost populations were more related to the mainland ssp. europaea than to the western guanchica lineage. Genetic diversity across the Canarian archipelago was significantly correlated with the date of the last volcanic activity in the area/island where each population occurs. At the island scale, this pattern was not confirmed in older islands (Tenerife and Madeira), where populations were genetically homogeneous. In contrast, founder effects resulted in low genetic diversity and marked genetic differentiation among populations of the youngest island, La Palma.

Does Semantic Context Benefit Speech Understanding through "Top-Down" Processes? Evidence from Time-resolved Sparse fMRI.

When speech is degraded, word report is higher for semantically coherent sentences (e.g., her new skirt was made of denim) than for anomalous sentences (e.g., her good slope was done in carrot). Such increased intelligibility is often described as resulting from "top-down" processes, reflecting an assumption that higher-level (semantic) neural processes support lower-level (perceptual) mechanisms. We used time-resolved sparse fMRI to test for top-down neural mechanisms, measuring activity while participants heard coherent and anomalous sentences presented in speech envelope/spectrum noise at varying signal-to-noise ratios (SNR). The timing of BOLD responses to more intelligible speech provides evidence of hierarchical organization, with earlier responses in peri-auditory regions of the posterior superior temporal gyrus than in more distant temporal and frontal regions. Despite Sentence content × SNR interactions in the superior temporal gyrus, prefrontal regions respond after auditory/perceptual regions. Although we cannot rule out top-down effects, this pattern is more compatible with a purely feedforward or bottom-up account, in which the results of lower-level perceptual processing are passed to inferior frontal regions. Behavioral and neural evidence that sentence content influences perception of degraded speech does not necessarily imply "top-down" neural processes.

Realised and Optimal Monetary Policy Rules in an Estimated Markov-Switching DSGE Model of the United Kingdom

This paper investigates underlying changes in the UK economy over the past thirtyfive years using a small open economy DSGE model. Using Bayesian analysis, we find UK monetary policy, nominal price rigidity and exogenous shocks, are all subject to regime shifting. A model incorporating these changes is used to estimate the realised monetary policy and derive the optimal monetary policy for the UK. This allows us to assess the effectiveness of the realised policy in terms of stabilising economic fluctuations, and, in turn, provide an indication of whether there is room for monetary authorities to further improve their policies.

Economising, Strategising and the Decision to Outsource

We study the make-or-buy decision of oligopolistic firms in an industry in which final good production requires specialised inputs. Firms’ mode of operation decision depends on both the incentive to economize on costs and on strategic considerations. We explore the strategic incentives to outsource and show that asymmetric equilibria emerge, with firms choosing different modes of operation, even when they are ex-ante identical. With ex-ante asymmetries, higher cost firms are more likely to outsource. We apply our model to a number of different international trading setups.

Adaptive Continuous time Markov Chain Approximation Model to General Jump-Diusions

We propose a non-equidistant Q rate matrix formula and an adaptive numerical algorithm for a continuous time Markov chain to approximate jump-diffusions with affine or non-affine functional specifications. Our approach also accommodates state-dependent jump intensity and jump distribution, a flexibility that is very hard to achieve with other numerical methods. The Kolmogorov-Smirnov test shows that the proposed Markov chain transition density converges to the one given by the likelihood expansion formula as in Ait-Sahalia (2008). We provide numerical examples for European stock option pricing in Black and Scholes (1973), Merton (1976) and Kou (2002).

Fact And Fiction In FX Arbitrage Processes

The efficient markets hypothesis implies that arbitrage opportunities in markets such as those for foreign exchange (FX) would be, at most, short-lived. The present paper surveys the fragmented nature of FX markets, revealing that information in these markets is also likely to be fragmented. The “quant” workforce in the hedge fund featured in The Fear Index novel by Robert Harris would have little or no reason for their existence in an EMH world. The four currency combinatorial analysis of arbitrage sequences contained in Cross, Kozyakin, O’Callaghan, Pokrovskii and Pokrovskiy (2012) is then considered. Their results suggest that arbitrage processes, rather than being self-extinguishing, tend to be periodic in nature. This helps explain the fact that arbitrage dealing tends to be endemic in FX markets.

Fact And Fiction In FX Arbitrage Processes

The efficient markets hypothesis implies that arbitrage opportunities in markets such as those for foreign exchange (FX) would be, at most, short-lived. The present paper surveys the fragmented nature of FX markets, revealing that information in these markets is also likely to be fragmented. The “quant” workforce in the hedge fund featured in The Fear Index novel by Robert Harris would have little or no reason for their existence in an EMH world. The four currency combinatorial analysis of arbitrage sequences contained in Cross, Kozyakin, O’Callaghan, Pokrovskii and Pokrovskiy (2012) is then considered. Their results suggest that arbitrage processes, rather than being self-extinguishing, tend to be periodic in nature. This helps explain the fact that arbitrage dealing tends to be endemic in FX markets.

Nano-electro-mechanical in dynamical cellular processes

Report for the scientific sojourn carried out at the Department of Structure and Constituents of Matter during 2007.The main focus of the work was on phenomena related to nano-electromechanical processes that take place on a cellular level. Additionally, it has also been performed independent work related to charge and energy transfer in bio molecules, energy transfer in coupled spin systems as well as electrodynamics of nonlinear metamaterials.

A Behavioural Model of Choice in the Presence of Decision Conflict

This paper proposes a model of choice that does not assume completeness of the decision maker’s preferences. The model explains in a natural way, and within a unified framework of choice when preference-incomparable options are present, four behavioural phenomena: the attraction effect, choice deferral, the strengthening of the attraction effect when deferral is per-missible, and status quo bias. The key element in the proposed decision rule is that an individual chooses an alternative from a menu if it is worse than no other alternative in that menu and is also better than at least one. Utility-maximising behaviour is included as a special case when preferences are complete. The relevance of the partial dominance idea underlying the proposed choice procedure is illustrated with an intuitive generalisation of weakly dominated strategies and their iterated deletion in games with vector payoffs.