Corporate Governance in China (summary section only)

The negative relationship between economic growth and stock market return is not an anomaly according to evidence documented in many economies. It is argued that future economic growth is largely irrelevant for predicting future equity returns, since long-run equity returns depend mainly on dividend yields and the growth of per share dividends. The economic growth does result in a higher standard of living for consumers, but does not necessarily translate into higher returns for owners of the capital. The divergence in performance between the real sector and stock markets appears to support the above argument. However, this thesis strives to offer an alternative explanation to the apparent divergence within the framework of corporate governance. It argues that weak corporate governance standards in Chinese listed firms exacerbated by poor inventor protection results into a marginalized capital market. Each of the three essays in the thesis addresses one particular aspect of corporate governance on the Chinese stock market in a sequential way through gathering empirical evidence on three distinctive stock market activities. The first essay questions whether significant agency conflicts do exist by building a game on rights issues. It documents significant divergence in interests among shareholders holding different classes of shares. The second essay investigates the level of agency costs by examining value of control through constructing a sample of block transactions. It finds that block transactions that transfer ultimate control entail higher premiums. The third essay looks into possible avenues through which corporate governance standards could be improved by investigating the economic consequences of cross-listing on the Chinese stock market. It finds that, by adopting a higher disclosure standard through cross-listings, firms voluntarily commit themselves to reducing information asymmetry, and consequently command higher valuation than their counterparts.

Privatisation, corporate control and employment growth:evidence from a panel of large Polish firms, 1996-2002

Using data on Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change. Privatised and de novo firms are the main drivers of employment growth; in the case of de novo firms, it is foreign ownership which underpins the result. Being privatised has a positive impact on employment but this is concentrated within a range of 3–6 years after privatisation. There are no systematic differences in employment response to negative sales growth across the ownership categories. Employment in state firms is less responsive to positive sales growth. From these results we infer that the behaviour of state firms is affected by both insider rent sharing and binding budget constraints.

Privatisation, corporate control and employment growth:evidence from a panel of large Polish firms, 1996-2002

Using panel data on large Polish firms this paper examines the relationship between corporate control structures, sales growth and the determinants of employment change during the period 1996-2002. We find that privatised and de novo firms are the main drivers of employment growth and that, in the case of de novo firms, it is foreign ownership which underpins the result. Interestingly, we find that being privatised has a positive impact on employment growth but that this impact is concentrated within a range of three to six years after privatisation. In contrast with the findings of earlier literature, we find evidence that there are no systematic differences in employment response to negative sales growth across the ownership categories. On the other hand, employment in state firms is less responsive to positive sales growth. From these combined results we infer that the behaviour of state firms is constrained by both insider rent sharing and binding budget constraints. Consistent with this, we find that privatised companies, three to six years post-privatisation, are the firms for whom employment is most responsive to positive sales growth and as such, offer the best hope for rapid labour market expansion.

Recasting the theory of mosquito-borne pathogen transmission dynamics and control

Mosquito-borne diseases pose some of the greatest challenges in public health, especially in tropical and sub-tropical regions of theworld. Efforts to control these diseases have been underpinned by a theoretical framework developed for malaria by Ross and Macdonald, including models, metrics for measuring transmission, and theory of control that identifies key vulnerabilities in the transmission cycle. That framework, especially Macdonald’s formula for R0 and its entomological derivative, vectorial capacity, are nowused to study dynamics and design interventions for many mosquito-borne diseases. A systematic review of 388 models published between 1970 and 2010 found that the vast majority adopted the Ross–Macdonald assumption of homogeneous transmission in a well-mixed population. Studies comparing models and data question these assumptions and point to the capacity to model heterogeneous, focal transmission as the most important but relatively unexplored component in current theory. Fine-scale heterogeneity causes transmission dynamics to be nonlinear, and poses problems for modeling, epidemiology and measurement. Novel mathematical approaches show how heterogeneity arises from the biology and the landscape on which the processes of mosquito biting and pathogen transmission unfold. Emerging theory focuses attention on the ecological and social context formosquito blood feeding, themovement of both hosts and mosquitoes, and the relevant spatial scales for measuring transmission and for modeling dynamics and control.

Path-following steering control for articulated vehicles

Passive steering systems have been used for some years to control the steering of trailer axles on articulated vehicles. These normally use a 'command steer' control strategy, which is designed to work well in steady-state circles at low speeds, but which generates inappropriate steer angles during transient low-speed maneuvers and at high speeds. In this paper, 'active' steering control strategies are developed for articulated heavy goods vehicles. These aim to achieve accurate path following for tractor and trailer, for all paths and all normal vehicle speeds, in the presence of external disturbances. Controllers are designed to implement the path-following strategies at low and high speeds, whilst taking into account the complexities and practicalities of articulated vehicles. At low speeds, the articulation and steer angles on articulated heavy goods vehicles are large and small-angle approximations are not appropriate. Hence, nonlinear controllers based on kinematics are required. But at high-speeds, the dynamic stability of control system is compromised if the kinematics-based controllers remain active. This is because a key state of the system, the side-slip characteristics of the trailer, exhibits a sign-change with increasing speeds. The low and high speed controllers are blended together using a speed-dependent gain, in the intermediate speed range. Simulations are conducted to compare the performance of the new steering controllers with conventional vehicles (with unsteered drive and trailer axles) and with vehicles with command steer controllers on their trailer axles. The simulations show that active steering has the potential to improve significantly the directional performance of articulated vehicles for a wide range of conditions, throughout the speed range. © VC 2013 by ASME.

Implementation of trailer steering control on a multi-unit vehicle at high speeds

A high-speed path-following controller for long combination vehicles (LCVs) was designed and implemented on a test vehicle consisting of a rigid truck towing a dolly and a semitrailer. The vehicle was driven through a 3.5 m wide lane change maneuver at 80 km/h. The axles of the dolly and trailer were steered actively by electrically-controlled hydraulic actuators. Substantial performance benefits were recorded compared with the unsteered vehicle. For the best controller weightings, performance improvements relative to unsteered case were: lateral tracking error 75% reduction, rearward amplification (RA) of lateral acceleration 18% reduction, and RA of yaw rate 37% reduction. This represents a substantial improvement in stability margins. The system was found to work well in conjunction with the braking-based stability control system of the towing vehicle with no negative interaction effects being observed. In all cases, the stability control system and the steering system improved the yaw stability of the combination. © 2014 by ASME.

Limited managerial attention and corporate aging

As firms have more assets in place, more of management’s limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory predicts that Tobin’s q falls with age. Further, competition in the product market is expected to slow down the decrease in Tobin’s q because it forces firms to look for alternative sources of rents. Similarly, greater competition in the labor market reduces the decrease in Tobin’s q with age because old firms are in a better position to hire employees that can help with innovation. In contrast, competition in the market for corporate control should accelerate the decline because it forces management to focus more on managing assets in place whose performance is more directly observable than on developing growth options where results may not be observable for some time. We find strong support for these predictions in tests using exogenous variation in competition.

Limited managerial attention and corporate aging

As firms have more assets in place, more of management’s limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory predicts that Tobin’s q falls with age. Further, competition in the product market is expected to slow down the decrease in Tobin’s q because it forces firms to look for alternative sources of rents. Similarly, greater competition in the labor market reduces the decrease in Tobin’s q with age because old firms are in a better position to hire employees that can help with innovation. In contrast, competition in the market for corporate control should accelerate the decline because it forces management to focus more on managing assets in place whose performance is more directly observable than on developing growth options where results may not be observable for some time. We find strong support for these predictions in tests using exogenous variation in competition

Corporate governance and finance in Poland and Russia

This book provides a comparative analysis of the emerging corporate control structures in the transition economies. It details characteristics of corporate governance in the two largest transition economies: Russia and Poland. It explores what kind of ownership structures are emerging in these two countries and to what degree they are they path-dependent and conditional on the initial choice of privatisation methods - fast ownership transfer through the mass privatisation programme and loans-for-equity scheme in Russia, and a more 'organic' growth of the new private sector in Poland. It examines the directions of the subsequent, post-privatisation, secondary ownership flows in both countries and the impact of the government on corporations, implied both by the residual shareholding of the state and by its regulatory and administrative actions.

Different legislations regarding OPA's

An analysis was made of then effectof the Tender Offer Law in Chile, andof the related situation of five countrieswith a more developed marketthan the Chilean one, reaching theconclusion that in order to successfullyimplement a Tender Offer Lawit is necessary to bear in mind thatthe problem is not solved by establishingstandards that regulate transactions,but by creating instancesthat contribute to a more dynamicand efficient market. In addition,there should exist a balance betweenprotection of the minority stockholderand competition for corporate control.Finally, we can conclude that thereis evidence that the Tender Offer Lawhas depressed the Stock Exchange.