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The purpose of this paper is to review characteristics and functions of an advance payment guarantee (AP-Bond), and to analyse some legal and practical issues concerning a “reduction clause” in an AP-Bond under an overseas construction contract.

This paper compares relevant provisions of the URDG 758, the UN Convention, the ISP 98, and the FIDIC Silver Book, and also cites relevant case laws of the USA, UK and Korea. This paper also refers many Korean scholars’ views on characteristics of an independent guarantee including an AP-Bond.

A demand for payment under an AP-Bond shall not be honoured in the event that an employer wrongfully refuses to issue documents required for reduction of an AP-Bond. A beneficiary shall not be favoured by independence nature of an AP-Bond in case of fraud or abuse of right.

This paper originally analyzes a “reduction clause” in an AP-Bond. This paper provides logics that a demand for payment shall not be honoured in the event that a beneficiary wrongfully refuses to issue documents required for reduction of an AP-Bond.

The purpose of this paper is to highlight the importance of independence principle of refund guarantees (RGs) and how to make the best of an arbitration clause in the guarantees so that a Korean shipbuilder, a guarantor and an export credit agency (ECA) may possibly protect themselves from buyers’ unlawful demand.

This paper firstly introduces a brief elucidation about RG and the concept of independence principle. By way of presenting factual backgrounds, legal and policy evaluation and analyses, this paper covered all issues and disputes arising out of one shipbuilding contract and the independent RG drawn from the shipbuilding contract, through in-depth cases studies of a judicial case on the matter of independence principle of RG between the beneficiary (the buyer or its assignee) and the guarantor reviewed by an English court, an arbitration case regarding whether the beneficiary (the buyer or its assignee) has any right of refund in the event of the acceptance of a repudiatory breach by the applicant (the builder) in the London Maritime Arbitrators Association, and the beneficiary (the buyer or its assignee)’s appeal to an English court against the award and a judicial case reviewing whether the guarantor has right of reimbursement in accordance with the terms of the export bond insurance with the Korean ECA.

While most RGs, in practice, are drawn as an independent guarantee which is payable on call without any evidence of default, there is another payment scheme in RGs, such as payment upon the submission of an arbitral award which may enhance the application of RGs in shipbuilding contracts. The paper suggested that under these circumstances, Korean builders may opt to make their shipbuilding contract be governed by Korean laws, with the Korean Commercial Arbitration Board as a competent arbitral jurisdiction and forum as far as possible.

This paper proposes prudent approaches and considerations in the issuance and application of RGs which are independent from shipbuilding contracts. The hope is to increase awareness in the utility of arbitration system as well as for fiduciary Korean banks and ECAs to play a more pivotal role in guiding shipbuilding industry stakeholders.

This paper aims to explore the extent of adequacy and confidence that can be enjoyed by minority shareholders in the supervisory controls on Boards in listed companies in China.

This study draws upon the legislative controls and case‐studies in China.

Being the cornerstone of the development of capital markets, listed companies are in complementary relationship with the latter, which in turn serves as the financing tool for the former. Recently, the financial markets all over the world have been thrown into deep crisis and the financing functions of the domestic capital markets have almost been paralyzed. In this context, it is high time for us to exert more efforts to improve the institutional arrangements of the supervisory functions in the governance of listed companies in China, to strengthen corporate governance, to restrain the actions and behaviors of major shareholders, directors and the executives, to strengthen their concerned responsibilities, to put greater attention and more protection on the promotion of minor shareholders' confidence on capital markets, and to maintain the steady and sustainable development of capital markets in the long run.

This study and findings should be of interest to those seeking to assess the adequacy of minority protection in China.

This study examines the role of financial service providers (FSPs) in assessing the supply chain credit of small and medium-sized enterprises (SMEs) and how they help SMEs obtain supply chain finance (SCF) through an established digital platform using big data analytics (BDA).

This study conducted data mining analysis on the archival data of China's FSPs in the mobile production industry from 2015 to 2018, using neural networks in the first stage and multiple regression in the second stage.

The findings suggest that digital platforms sponsored by FSPs have a discriminative effect based on implicit BDA on identifying the quality and potential risks of borrowers. The results also show that tailored information utilised by FSPs has a supportive effect based on explicit BDA in helping SMEs obtain financing.

This study contributes to the emergent research on BDA in supply chain management by extending the contextual research on information signalling and platform theory in SCF. Furthermore, it examines the distinctive financing decision models of FSPs and provides a solution that addresses the information deficiency and overload of both lenders and borrowers and plays a certain reference role in alleviating the financing problems of SMEs.

Under IAS 24 a related party transaction (RPT) is a “transfer of resources, services or obligations between related parties, regardless of whether a price is charged” (IASB). The purpose of this paper is to consider the interest of the business group and the directing activity of the parent company for the interpretation of the RPT. Considering the interest of the group means to interpret the intra-group transactions not as isolated transactions, as usually done by the empirical studies, but in a wider perspective, that of the group.

This paper builds on explanatory multiple case studies in order to answer the following research questions: why the interest of the business group and the directing activity of the subsidiaries by the parent company are important in the interpretation of RPTs. How RPTs can be interpreted in the light of the directing activity of the holding company.

Dominant shareholder tends to demonstrate that the group it is not managed as a single economic entity and sometimes that subsidiaries are not really controlled. The case studies show that a regulation that imposes the transparency of the directing activity has at least two effects: the controlling shareholder finds it convenient to delegate the decision-making power and to not carry out RPTs among firms that do not present clear economic links. Thus, the transparency of the directing activity seems to be a disincentive to the establishment of a pyramidal group with expropriation purposes.

It is appropriate that the interpretation of the RPT take into account not only the disclosure of the RPT (e.g. type and nature), but also the following disclosure: the reason and the business purpose that lead to RPT; the interest of the company in engaging such transactions; and the procedures for their approval. The independence of subsidiaries directors is necessary to ensure the management autonomy of the boards, and in the case of directing activity they have to protect outsiders in the case of detrimental transactions ordered by the controlling and directing company that are not carried out in the interest of the group.

Unlike what has been done so far by the literature on RPT, this paper considers the interest of the group to interpret the intra-group transactions and the separation between control and direction. It means do not interpret RPT as isolated transactions, as usually done by the empirical studies, but in a wider perspective, that of the group.

Islamic financing is based on the ideology of Islam, proposing a different economic system than capitalism. The essence of Islamic financing lies in trading of goods, provision of services and/or investment under profit and loss sharing. This study aims to examine legal forms and economic substance of the contracts used by the Islamic financial industry.

To conclude on the objectives of the study, five most widely used contracts (modes/products), including Murabaha, Ijarah, Diminishing Musharaka, Sukuk and Mudaraba (deposits), were selected to test against the theory of the Islamic financial system.

It is found in the process that legally (legal form) contracts/products are in line with theory; however, economic substance is not very different from conventional counter parts.

Through application of alternative calculation measures/methods and proper training of human resources, Islamic financial institutions can shift economic substance of contracts in line with the theory of Islamic finance.

Islamic finance is an emerging area, and reasonably good amount of literature is available; however, perhaps, this is the only piece of work focusing on calculation methods, contributing in economic substance of contracts, being used in modern Islamic finance in addition to legal form as per essence of Islamic financial system.

The purpose of the article is to move beyond positivistic political economy analysis of fair trade, and to examine competitive dynamics between competing interpretations in terms of the very fair trade concept itself.

Grounded in an ideational ontology, the paper provides a theoretical framework concerned with the contestation of meaning. Analysis applies this framework through a heuristic reading of fair trade's history, drawing on secondary literature, documents and primary qualitative research; and the discursive construction of Fair for Life – a new programme seeking to negotiate the “constitutive rules” of fair trade.

The article identifies that the history of fair trade and its current competitive dynamics are constituted by a negotiation and contestation of the constitutive rules that set the parameters of the fair trade concept.

The paper complements political economy analysis of socially constructed governance such as fair trade, and adds value to academic analysis by exposing important, yet previously unconsidered, micro‐politics of language and practice. The description and initial analysis of “Fair for Life” opens a new area of empirical interest for scholars of fair trade and sustainability governance.

Analysis highlighting the important implication of discourse and practice for the very definition of fair trade offers practitioners important insights into little considered implication of their practices and their representations in language.

The article complements political economy analysis by demonstrating the value of an ideationally grounded analysis of fair trade and similar socially constructed governance systems.

The purpose of this paper is to investigate the drivers influencing the risk of default on mutual guaranteed loans. The authors aim to verify whether default is influenced by the specific business policies of mutual guarantee institutions (MGIs) and to recommend guidelines for directing their operating management.

The authors analyse the guaranteed portfolios of 19 Italian MGIs and investigate the determinants of the defaulted positions at the end of June 2011. The sample consists of 167,777 guaranteed loans, of which 11,349 are in default. Using regression models, we identify the variables related to the business model of MGIs that are significantly associated with default on their positions.

The defaulted positions of MGIs are significantly correlated with the type of issued guarantees. This condition should be considered in defining product and price policies.

The authors identify some critical issues in the risk-taking processes of MGIs. The tested hypothesis highlights the opportunities for the optimisation of guaranteed loan portfolios, which is necessary for reducing the profitability/liquidity pressures of these financial institutions and enhancing their efficiency as instruments for mitigating the effects of credit rationing and promoting the revitalisation of small-and medium-sized enterprises.

The results are based on an original and reserved dataset, which is not available in public financial statements or public statistics, but is collected directly from the MGIs that are part of the study.

The purpose of the paper is to examine the law relating to different types of guarantee schemes and the circumstances in which they are used to safeguard against default risks in international commercial practice. Different types of guarantee schemes are used in different contexts, often depending on which types and the purpose they have been sought.

The paper was undertaken by evaluating secondary data sources, empirical examples and case law to underscore the pitfalls commercial parties need to always bear in mind with regard to guarantees and factoring and their usage in international commercial practice.

The paper articulates the law relating to different types of guarantees and how they are harnessed to provide security against default risks in international commercial practice. By the very nature of guarantees, they tend to be in high demand in times of economic uncertainties when banks and other financial institutions find it less prudent to lend to borrowers without ensuring some form of security against potential defaults.

There are many different types of guarantee schemes clients can always opt for, but some of them are never written about as much. There is therefore limited data available to inform policy decisions by those who seek to use them. Lack of adequate information on any financial produces, leave alone guarantees, is not good for businesses and the public in terms of how to safeguard against risks inherent in usage and practice of guarantees. In this similar respect, there were not enough data available to evaluate the varied context in which guarantees are used.

There are limited data available on guarantees, and because they are speciality products, the way they are used in practice can never be overlooked. It was necessary to publish this paper not only to address the foregoing need but also to discuss different types of guarantees and enhance understanding on their usage and practice. The paper articulates the law relating to guarantees and what guarantors need to always bear in mind before they accept to sign contracts of guarantees.

Guarantees are important for markets to operate efficiently. Their usage and practice has wide implications for various stakeholders such as banks, businesses, economies, governments and people, especially where contracts relating to them are not constituted and executed properly. Defaults on borrowed loans can lead banks not to lend money to businesses and subsequently choke them of a source on which many depend.

This is the first paper that articulates the close relationship between guarantees, factoring and trusts. The paper has articulated the varied contexts in which each of the foregoing speciality products is harnessed in practice. Although this paper was written largely by reviewing and internalizing secondary data sources, it was done in a distinctive way to underscore the objectives it was written to achieve.

Many service providers feel confident about their service quality and thus offer service guarantees to their customers. Yet service failures are inevitable. As guarantees can only be invoked when customers report service failures, firms are given the opportunity to redress the original failure potentially influencing customer outcomes. The purpose of this paper is to provide the first empirical investigation of whether excellence in service recovery affects customers’ intentions to invoke a service guarantee, thereby discriminating between conditional and unconditional guarantees and testing for the impact of customers’ individualistic vs collectivistic cultural orientation.

In total, 171 respondents from four continents (spanning 23 countries) were recruited to participate in a quasi-experimental study in a hotel setting. A three-way analysis of variance was used to test the hypotheses.

All customers are very likely to invoke the service guarantee after an unsatisfactory service recovery. When customers are satisfied with the service recovery, they report lower invoke intentions, except for collectivistic individuals who are still inclined to invoke an unconditional service guarantee after a satisfactory service recovery. The finding supports an in-group/out-group rationale, whereby collectivists tend to behave more opportunistically toward out-groups than individualistic customers.

The study highlights the importance of excellence in service recovery, cultural differences and different types of service guarantees with respect to customers’ intentions to invoke the guarantee. The paper demonstrates how service guarantees should be designed in conjunction with service recovery strategies. Also, the paper shows that an unconditional service guarantee creates the condition in which collectivists might engage in opportunistic behavior; global service providers concerned about opportunistic customer claiming behavior thus might benefit from using conditional service guarantees.