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31. Post-privatisation Corporate Performance in Poland. Evidence from Companies Privatized in 2008-2011

Author:
Barbara Błaszczyk and Wiktor Patena
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The study concerns the effects of Polish privatisation program conducted in the years 2008-2011. After drawing a broad picture of this process we investigate the performance of 59 privatised companies, and finally focus on a deeper analysis of three companies, which is the core part of our study. We test the hypotheses that privatisation increases a company's profitability, labour productivity, capital investment spending, plow-back ratio and leverage. In case studies, we additionally explore the effect of privatization on each company’s value. The outcomes concerning the larger group of companies are partly ambiguous (with four hypotheses confirmed and four rejected). Profitability has been not visibly improved, although a number of positive initiatives and improvements in performance occurred. By contrast, the three case studies showed a significant improvement of profitability and all other performance indicators observed, as well as a considerable increase of company value. Our results show that privatisation works, though its full effects need time to occur.
Topic:
Privatization, Financial Markets, Economy, Economic growth, State, Innovation, and Trade
Political Geography:
Europe, Central Asia, Caucasus, Eastern Europe, and Poland

32. The Banking Union: State of Art

Author:
Andrzej Reich and Stefan Kawalec
Publication Date:
06-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
It is widely believed that the creation of the banking union initiated the integration of the EU banking market. The process is traced back to June 2012 (EU Summit decided to create the banking union), 4 November 2013 (effective date of the Banking Union Regulation), or 4 November 2014 (operational launch of the Single Supervisory Mechanism, SSM). However, the integration of the EU banking market began much earlier and the creation of the banking union should be considered the final rather than the initial step in the process.
Topic:
Finance, Financial Markets, Regional Integration, Banks, and Fiscal Policy
Political Geography:
Europe and European Union

33. Rio de Janeiro as a Global Financial Center

Author:
Virgílio Gibbon
Publication Date:
10-2015
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
Situational crises tend to concentrate economic activity in centers where such activity already is historically more significant. As a result, financial markets — especially the organized markets — tend to coalesce around these same centers because they benefit from the higher level of liquidity that concentrated economic activity offers. This undoubtedly was one of the major causes of the waning of the financial market in Rio de Janeiro, and the hegemony conquered by São Paulo as of the 1980s.
Topic:
International Political Economy, International Trade and Finance, Financial Crisis, and Financial Markets
Political Geography:
Brazil

34. Power to the States: Making Fiscal Transfers Work for Better Health

Author:
Center for Global Development
Publication Date:
12-2015
Content Type:
Special Report
Institution:
Center for Global Development
Abstract:
Most money and responsibility for health in large federal countries like India rests with subnational governments — states, provinces, districts, and municipalities. The policies and spending at the subnational level affect the pace, scale, and equity of health improvements in countries that account for much of the world’s disease burden: India, Indonesia, Nigeria, and Pakistan. Fiscal transfers between levels of government can — but do not always — play an important role in turning money into outcomes at the subnational level. Well designed, transfers can help put states on a level financial playing field by equalizing spending across states and adjusting allocations for the health risks of each state’s population. Transfers can increase accountability and create incentives for greater spending or effectiveness in service delivery. But transfers are rarely designed with attention to their desired outcomes. To get to better outcomes, international experience suggests that transfers need to be reexamined and reformed along three dimensions. First, central government’s allocation of national revenues to subnational governments should respond to needs and population size. Second, transfers should generate incentives to improve subnational governments’ spending quality and performance on outcomes. Third, independent systems to monitor, evaluate, and provide feedback data on subnational performance can generate greater accountability to the central government, parliaments, and legislatures as well as to citizens. These insights are seemingly simple and suggestive, but each country starts from its own unique history that requires careful technical analysis and political savvy to define reforms with genuine potential to improve health.
Topic:
International Political Economy, International Trade and Finance, and Financial Markets
Political Geography:
Global Focus

35. Natural Resources and Capital Flight: A Role for Policy?

Author:
Lemma W. Senbet, Gregoire Rota-Graziosi, and Rabah Arezki
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper investigates the relationship between natural resources and capital flight in the form of tax avoidance from multinational corporations. In particular, it focuses on the spillover effects in terms of tax revenue mobilization and stock market development from the thin capitalization rule, a policy instrument aimed at limiting firm tax avoidance through setting limits on a firm’s foreign indebtedness. We exploit the plausibly exogenous within-country variations of data on oil discoveries for a panel of 117 countries during the period 1970–2012. We find evidence that oil discoveries significantly enhance both tax revenue mobilization and stock market development, but only when a thin capitalization rule is in place. We argue that these findings can be explained through the limiting role of a thin capitalization rule in multinational companies’ use of financial transactions among their affiliates or tax havens to transfer part of the profit. The thin capitalization rule may thus not only help limit the erosion of the domestic tax base but may also entice multinational corporations to resort to using and developing the domestic financial system.
Topic:
Development, Economics, International Trade and Finance, Financial Markets, Economic growth, Capital Flows, and Capital Flight
Political Geography:
Africa

36. Reinsurance in Brazil: the challenges and opportunities of the opening of the market

Author:
Claudio Contador
Publication Date:
07-2014
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
The opening of the reinsurance market in Brazil finally took place in 2007, amidst euphoria and great expectations. The process lasted nearly two decades, with little movement, to the great frustration of the companies, international investors and, especially, the domestic insurance market, which was in need of modernization and less government involvement. The exhaustion of the nationalized reinsurance model created in 1939 was evident by the 1990s and became even more visible in that decade, in the face of opportunities for insurance offered by the large investments in infrastructure, and rural, environmental and disaster insurance, among others.
Topic:
International Trade and Finance, Global Markets, Financial Markets, and Global Political Economy
Political Geography:
Brazil and Global Focus

37. Foreign Exposure to Asset-Backed Securities of U.S. Origin

Author:
Daniel O. Beltran, Laurie Pounder, and Charles Thomas
Publication Date:
08-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The financial turmoil which began in August 2007 originated, in part, because investors reassessed the quality of the assets underlying many asset-backed securities (ABS), particularly U.S. mortgages. The prominence of European banks in the early stages of the turmoil created the perception that foreigners held an outsized share of risky U.S. securities and prompted questions of why Europeans were so exposed. This paper evaluates that perception by quantifying foreign exposure to ABS with U.S. underlying collateral. Using the latest survey data on foreign portfolio holdings of U.S. securities, we find that the ultimate losses that foreigners could incur arising from U.S. underlying assets are small relative to most scale variables, although initial total mark-to-market losses are estimated to be significantly larger. Among other reasons for this difference between ultimate and initial losses, we demonstrate that the securitization chain can amplify mark-to-market price declines in the presence of uncertainty or illiquidity. Finally, we show that, relative to the size of the market, foreigners’ holdings of U.S. mortgage-backed securities do not appear to be elevated compared with their holdings of other U.S. assets.
Topic:
Economics, Financial Crisis, Financial Markets, and Mortgages
Political Geography:
United States and North America

38. Friends or Foes? The Stock Price Impact of Sovereign Wealth Fund Investments and the Price of Keeping Secrets

Author:
Jason Kotter and Uger Lel
Publication Date:
08-2008
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the stock price impact of 163 announcements of Sovereign Wealth Fund (SWF) investments. We document an average positive risk-adjusted return of 2.1 percent for target firms during two days surrounding SWF acquisition announcements. The announcement effect is both statistically and economically significant. A multivariate analysis shows that the degree of transparency of SWF activities is an important determinant of the market reaction, and both the SWF and the existing shareholders of the target firm benefit from improved SWF disclosure. In addition, target firms’ profitability, growth, and governance do not change significantly in the three-year period following the SWF investment relative to a control sample. These results are robust to a battery of tests. Overall, our findings suggest that SWF investments convey a positive signal to market participants about the target firm, increased SWF transparency
Topic:
International Trade and Finance, Global Markets, Financial Markets, and Investment
Political Geography:
Global Focus

39. Privatisation in the Meda Region

Author:
Celine Kauffmann and Lucia Wegner
Publication Date:
07-2007
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
This paper builds on a new database (PRIVMEDA) in order to assess the progress of the privatisation process in the MEDA countries of Algeria, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia and Turkey. The first part of the paper offers an overview of the privatisation record from 1990 to 2006. It shows that, as in other parts of the world, the first wave of privatisations in the 1990s, which focused almost exclusively on profit-making enterprises in the tourism, transport, food and construction material sectors, slowed down towards the early 2000s and rebounded in 2005 when larger utilities where earmarked for sale. The second part of the paper assesses the outcome of the privatisation process in light of three key objectives: fiscal proceeds, economic efficiency and the development of the local private sector. It concludes that privatisation in the MEDA region can successfully promote efficiency and private sector development only when embedded in a package of measures, including the setting up of a proper regulatory framework, the improvement of the business climate and the liberalisation of financial markets.
Topic:
Privatization, Tourism, Regulation, and Financial Markets
Political Geography:
Turkey, Israel, Algeria, Lebanon, Syria, Egypt, Jordan, Morocco, Tunisia, and Malta