John J. Carney, Jonathan R. Barr, Teresa Goody Guillén, Jimmy Fokas, Kevin R. Edgar, Michelle Tanney, Bari Nadworthy and Madison Gaudreau
To examine what to expect from Chair Gary Gensler’s SEC and the new Biden presidential administration following Chair Gensler’s U.S. Senate confirmation on April 14, 2021.
Abstract
Purpose
To examine what to expect from Chair Gary Gensler’s SEC and the new Biden presidential administration following Chair Gensler’s U.S. Senate confirmation on April 14, 2021.
Design/methodology/approach
Reviews past SEC Chair Jay Clayton’s legacy and Chair Gensler’s prior regulatory actions and focus, and outlines Chair Gensler’s expected initiatives, including a heightened focus on cryptocurrency regulation, investigation of COVID-19-related fraud, and ESG and climate change disclosure.
Findings
This change will bring forth a Democratic majority at the SEC which, in turn, suggests that the Commission will change its current emphasis on capital formation to focus more on investor protection, rules required by the Dodd-Frank Act, inspections, examinations, and enforcement
Practical implications
Firms should examine their compliance programs in anticipation of heightened advocacy for investor protection; an increased focus on cryptocurrency and blockchain technology, as well as ESG disclosures with an emphasis on climate change; and an increase in inspections and examinations which will drive more enforcement in the fund industry, as well as increases in initiatives regarding transparency, additional disclosures, and investor protection. Organizations will also benefit by reexamining their existing compliance programs with the advice of counsel as a mechanism to mitigate the risk of potential securities laws violations.
Originality/value
Practical guidance from experienced securities enforcement and litigation lawyers.
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John Carney and Arthur Wilbraham
In the great trading days of the 16th and 17th century it was often trade which preceded the flag. Today there is still clearly a ‘push‐pull’ relationship between international…
Abstract
In the great trading days of the 16th and 17th century it was often trade which preceded the flag. Today there is still clearly a ‘push‐pull’ relationship between international business and international politics. Interwoven with the warp of international politics is the weft of international business. As the Whitehall Eurocrats polish up their French prior to descending on Brussels a growing number of businessmen are choosing and being chosen to settle temporarily in foreign countries.
On its 5th anniversary since the management buy out from Plessey Microsystems, Radstone Technology PLC has announced record results for the 1992/1993 financial year.
Harvey M. Silets and Michael C. Drew
For someone seeking to place his assets out of the reach of creditors, Offshore Asset Protection Trusts (OAPTs) offer the potential settlor secrecy, control, choice of law and…
Abstract
For someone seeking to place his assets out of the reach of creditors, Offshore Asset Protection Trusts (OAPTs) offer the potential settlor secrecy, control, choice of law and jurisdiction, and favourable taxation. While many legitimate entities make use of the benefits of OAPTs, criminal entities have also seized upon them as a means of furthering their crimes.
Rolls‐Royce has received certification for the RB211‐535 to be used for test flights on Russia's Tupolev Tu‐204 airliner.
George (Yiorgos) Allayannis and Christopher Brandriff
This case examines the causes and consequences of the Lehman Brothers bankruptcy during one of the most fascinating weekends in financial history. It's about the commercial paper…
Abstract
This case examines the causes and consequences of the Lehman Brothers bankruptcy during one of the most fascinating weekends in financial history. It's about the commercial paper market, a major funding market served by Lehman Brothers, and the events that led to “breaking the buck” on money market funds. It also examines the CDS market where Lehman was such a big player, the potential impact that CDSs had on the crisis, and the notion and validity of the too-big-to-fail hypothesis.
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Michael Carney, Marc Van Essen, Saul Estrin and Daniel Shapiro
The purpose of this paper is to examine two prominent perspectives on business group functioning, institutional void (IV) and entrenchment/exploitation (EE), that make different…
Abstract
Purpose
The purpose of this paper is to examine two prominent perspectives on business group functioning, institutional void (IV) and entrenchment/exploitation (EE), that make different predictions about the effect of business group (BG) on the economy. The authors examine the effects of BG prevalence in an economy and its effect on macroeconomic outcomes including foreign direct inward and outward investment, innovation and development of the financial sector.
Design/methodology/approach
The authors build a unique database by extracting estimates of BG prevalence for multiple countries between 1978 and 2012 from the existing literature and use this to test conflicting predictions derived from the IV and EE perspectives, respectively.
Findings
The authors find no consistent evidence that BG prevalence diminishes over time with economic development as IVs diminish, which is predicted by the IV perspective. Instead, the long-term persistence of BGs in many countries appears to be more consistent with the EE perspective. However, this study also finds no support for the perspective that high levels of BG prevalence are negatively associated with country-level indicators and determinants of economic development and competitiveness, as suggested by that perspective.
Originality/value
The authors conclude that there is no robust support for either the IV or the EE perspective and highlight the need for more contextualized theorizing about the evolution of BGs.
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Michael Carney, Saul Estrin, Zhixiang Liang and Daniel Shapiro
This study aims to advance an international political economy (IPE) perspective that geo-political events can have long-lasting imprint effects on countries and their firms. The…
Abstract
Purpose
This study aims to advance an international political economy (IPE) perspective that geo-political events can have long-lasting imprint effects on countries and their firms. The study also aims to explore the idea that shared political history and geography combine to create specific structural conditions that shape the international competitiveness of all firms in a region. In particular, the authors consider whether the Monroe Doctrine of 1823, which asserted American influence in the Western Hemisphere, contributed to the creation of institutional structures across Latin America (LA) affecting the strategies of all firms to this day. The authors also illustrate the IPE perspective using the example of the contemporary international competitiveness of LA business groups.
Design/methodology/approach
The authors illustrate the IPE perspective using the example of the contemporary international competitiveness of LA business groups. The exploratory framework of this study leads to a proposition about the export performance of Latin American business group affiliates. The authors use firm-level performance data for 32,000 firms across emerging economies to explore the proposition empirically while controlling for alternative explanations. To do this, the authors draw on the World Bank Economic Surveys.
Findings
The authors derive a proposition that argues the Monroe Doctrine has had a long-run imprint effect on economic policymaking in LA, resulting in a common, persistent and negative impact on the international competitiveness of firms. The authors find strong and consistent evidence that in terms of export performance, all Latin American firms export less and group affiliates do not outperform independent firms, This finding contrasts with the results for all the other emerging market regions around the world.
Research limitations/implications
The main contribution of this study has been to suggest the potential importance of shared regional geopolitical history and geography in explaining firm-level outcomes. However, this study is preliminary and introductory, although the authors seek to control for alternative country-specific explanations of the results. The analysis considers the effects of one particular IPE phenomenon, the Monroe Doctrine, in one particular location: LA. Future work should seek to contrast LA with other geopolitical security and alternative IPE structures. They might also address the time dimension from a historical perspective: is imprinting in LA driven by the length of the Monroe Doctrine arrangements?
Practical implications
The most important managerial learning point concerns the relevance of geography and political economy factors for multinational enterprises strategy formation. There is widespread understanding that context is an important determinant of subsidiaries’ performance, and that strategies need to be constructed to take account of country-specific characteristics, most importantly, in emerging economies and institutional arrangements. This paper proposes that managers also need to take account of IPE structures, including security arrangements, and to consider the resulting regional as well as national context.
Social implications
The analysis suggests that not only the performance of firms, including emblematic firms, but also the socially beneficial spillovers that might be generated from them, are contingent on the regional as well as national characteristics. Thus, business groups in most emerging economies are found to yield better performance and to provide higher levels of social impact, including concerning ESG goals. However, the findings of this study suggest that the former is not true for LA, which, the authors argue, is a consequence of imprinting as a result of the Monroe Doctrine. Further work is needed to establish whether the latter effect is also not true, but if that is the case, then regionally specific policies may be required to address the resulting corporate social shortfalls.
Originality/value
The core idea is that geo-political events can have long-lasting imprint effects on countries and their firms: that shared political history and geography create specific structural conditions that shape the international competitiveness of all firms in a region. The authors explore this concept with reference to the Monroe Doctrine, asking whether its assertion of US influence across the Americas contributed to the creation of institutional structures across LA affecting the strategies of all firms to this day.
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Until the 2008 Crash, the prevailing economic orthodoxy, accepted across the broad political spectrum, was that inequality was a necessary condition for economic health. The…
Abstract
Until the 2008 Crash, the prevailing economic orthodoxy, accepted across the broad political spectrum, was that inequality was a necessary condition for economic health. The evidence of the last four decades is that this trade-off theory – that you can have more equal or more efficient economies but not both – is incorrect. Not only do excessive concentrations of income and wealth bring social dislocation and breed public discontent with democratic institutions, but a number of studies have shown that inequality on today’s scale brings slower growth and greater economic turbulence. Although there is now a broad acceptance amongst global leaders that inequality poses significant risks for social cohesion and economic stability, there has been little or no action to match the high level verbal war against inequality. As a result, inequality has carried on rising within nations since 2008. In the United Kingdom, the gap between the top and bottom has continued to widen, in part because post-2010 governments have weakened the pro-equality role of the state. Tackling inequality is now one of the most pressing issues of the day – an economic as well as a social imperative – while reversing this four decade long trend will require a major restructuring of the pro-market economic models in place across most of the rich world.
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In January 2013, Irish authorities were the first to uncover the year's first food sourcing scandal: horsemeat sold as beef on supermarket shelves. It was not long before…
Abstract
In January 2013, Irish authorities were the first to uncover the year's first food sourcing scandal: horsemeat sold as beef on supermarket shelves. It was not long before regulators and retailers realized the problem was truly a continental one. The incident involved French exporters, Luxembourger production facilities, Cypriot and Dutch meat traders, British and Swedish retailers, and Romanian horsemeat. Food service providers and retailers were forced to test beef products to ensure they were horse-free, pulling products that contained traces of equine meat. British supermarkets alone disposed of an estimated 10 million “beef” burgers in the wake of the scandal.
This case is an example of the challenges of managing the complex global supply chains that make up the modern food industry. In this class discussion, students will use concepts from management, economics, and public policy to assess the damage of this event and to analyze strategies for preventing similar incidents in the future.
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