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This study seeks to explore the presence and the relative strength of market efficiency in the onshore and offshore Renminbi (RMB) forward markets.

In the onshore and offshore foreign exchange markets, the RMB forward contracts are designed in similar ways. However, the underlying economic forces and regulatory frameworks are very different in these two markets. We first analyze the functioning of each market, by examining the covered interest rate parity (CIRP) conditions. Second, we explore the CIRP deviations in the two markets and quantify the role of market frictions and government interventions.

We find that the CIRP condition does not hold in either the onshore or the offshore RMB forward markets. We also find that the offshore market is more efficient than the onshore market in conveying private information about investors’ expectation.

Our results reveal that the onshore RMB forward market provides an imperfect platform for investors to manage their currency exposures. We suggest that by opening the offshore market to domestic participants and the onshore market to more foreigners, the forward rates may become more informative with a greater investor mix. These liberalization efforts are important steps in the right directions to improve market efficiency in the Chinese FOREX market.

This article brings a new, broad conceptual framework to the quest for understanding dynamic capability in organizations (i.e., “managing on the edge of chaos”). This approach rests on two major ideas: (i) a duality–paradox perspective and (ii) new typologies of organizational learning (OL) and individual action/thinking. A case of radical innovation at Microsoft provides a multilevel stimulus. Understanding it requires a focus on two dualistic challenges. For use in future ODC research and practical assessment, this broad new conceptual framework includes: (i) collaboration as a central concept; (ii) duality–paradox as a key source of conflicts that can threaten collaboration; (iii) five types of OL, (iv) four types of individual action/thinking, including paradoxical thinking, and (v) the proposition that “golden dualities” can be created from once-troubling duality situations (where critical collaboration was in danger) which have been transformed from the metaphorical “odd (contentious) couple” into a “productive (collaborative) partnership.”

This chapter adopts value at risk (VaR) to analyze the hedge timing issue. Suppose that a producer, at a give time, recognizes the possible need of a futures contract for risk reduction purpose. Should the producer trade in the futures market immediately or should he wait? Conditions are characterized under which delaying the hedge decision is preferred as it produces a smaller VaR. For an efficient futures market, it appears that the producer is better off delaying the hedge decision as long as possible. However, strong backwardation promotes early hedging.

Traffic accident on inter-city expressways might cause large-scale traffic congestion. It might increase travel times of many drivers and it produces a large social loss. This study aims to estimate the social loss of travel time of drivers caused by traffic accidents on inter-city expressway using traffic simulation model, and to evaluate the effects of outflow recommendations when an accident occurs on the expressway. The traffic simulation model on Tomei Expressway is constructed to estimate the dynamic traffic congestion. Travel time losses of drivers are estimated by the simulation results with hypothetical traffic accidents. It is understood that the total losses of travel times are depending on the positions of accident spots and the occurrence times of accidents, because it might influence to congestion at the bottlenecks of flow capacity. Moreover, the effect of traffic control in emergency situation is discussed. The influences of outflow recommendations for drivers are estimated using the traffic simulation model.

This paper complements previous research on investment in firm-specific human capital by applying real options analysis. Our framework suggests that the parties receive valuable options to exit the contract when information becomes revealed in the future, but these options may be more valuable for one party than the other. Companies and workers attempt to reduce the value of the options through contractual mechanisms that either shift wealth to the party granting the option or prevent the option from being exercised. In both cases, the mechanisms cause the parties to invest in firm-specific capital, resulting in higher output and higher wages.