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While China is currently moving toward the full development of its own financial derivatives markets, to date, China's experience with these has been a negative one. This paper examines the importance to China of developing a fully integrated financial derivatives market from both the economic and financial market perspectives. It examines the best way forward for derivative trading, both market based and over-the-counter, and the types of products best suited to both, given the current state of the Chinese financial markets. Consideration is given to market structure, regulation, trading and settlement systems and international cooperation.

To explore the shifting contours of politico-economic governmental responsibility and accountability from the consensually driven Keynesian welfare state model through to the market focused neo-liberal new public management (NPM) approach and beyond. In particular the chapter addresses the post-2008 crisis and austerity environment. It questions why the apparent failure of the market privileged neo-liberal model resulting in financial crisis and the prolonged aftermath has not led to an alternative recognizably coherent or consensually based approach to government and state responsibility for politico-economic management, and the implications of this for the accountability of public services.

The chapter draws on extensive literature across economic, social policy, public management and other fields as well as government and key institutional documents and reports. This enables a comparative perspective on governmental approaches to politico-economic management and management of public services, addressing key areas of consensus, responsibility and accountability.

The chapter traces the trajectory of governmental accountability and responsibility from Keynesianism to neo-liberalism and NPM, conceptually grounding these policy shifts and punctuations. It suggests that the key issue – why the dramatic failure of the neo-liberal model from 2008 has not led to a new emerging paradigm – may be answered not simply by reference to the continuation of neo-liberal approaches, but by appreciating that a number of countries have in fact implemented adaptive and resilient systems which have accommodated many of the neo-liberal NPM prescriptions. The findings conclude with some speculation on the future of government and public sector accountabilities and responsibilities.

The purpose of this chapter is to provide an understanding of the trend of corporate social responsibility (CSR) in Taiwan. It seeks to explore the relationship between corporate governance and CSR from a perspective of developing countries.

Using stakeholder theory as an analytical framework, this chapter presents an analysis based on literature review and secondary data on empirical research.

A company’s CSR performance can be regarded as the outcome of the responses to its multiple stakeholders’ expectations. Most Taiwanese firms were not actively engaging in CSR activities, from an international standard. On the whole, they also showed that local companies lacked of both internal dimension and external dimension to carry out CSR strategy. From the CSR performance of Taiwanese firms, it was a typical pattern that the management responded to the expectations based on the stakeholders’ power.

The chapter does not include the primary data. To improve our understanding of how corporate governance influences CSR, more and detailed research is needed.

This chapter highlights that corporate governance structure significantly influences CSR performance. This also explains the difference in CSR performance of companies between developed and developing countries. Using a stakeholder perspective on corporate governance, CSR performance reflects the typical management intent – voluntary responses to the stakeholders’ expectations.

This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

This paper examines the role of structured products in the 2008–2009 financial crisis. The growth of asset securitization has allowed loans that used to be funded by traditional intermediaries, including commercial banks, to be funded in securities markets. As credit-related services became unbundled, layers of transactions were added to the financial intermediation process. These layers were added as structured products, e.g., credit default swaps, in the over-the-counter market. This paper looks at the evolution of credit markets and the importance of using off-balance-sheet-based measures as an alternative in assessing the financial sector.

Social scientists have long been interested in how political institutions affect economic performance. Nowhere are these effects more apparent today than in the current U.S. financial meltdown. This article offers an analysis of the meltdown by showing how government regulation among other things helped cause it. Specifically, the article shows how regulatory reforms closely associated with neoliberalism created perverse incentives that contributed significantly to the increased lending in the mortgage market and increased speculation in other financial markets even as such behavior was becoming increasingly risky. The result was the failure of mortgage firms, banks, a major insurance company, and eventually the market for short-term business loans, which triggered a general liquidity crisis thereby thrusting the entire economy into a severe recession. Implications for future research are explored. The article also offers a few policy prescriptions and an assessment of their political viability going forward.

In some contexts, this illiquidity of executive stock options is referred to as non-transferability. In others, the problem is cast in terms of the highly concentrated portfolios that managers hold, an implication of which is that managers could not trade the options to diversify. The notion of option liquidity usually conjures up images of trading pits at the Chicago Board Options Exchange or other exchanges. The existence of an active trading pit gives a powerful visual image of liquidity, but, as evidenced by the success of electronic options exchanges such as New York's International Securities Exchange and Frankfurt's EUREX, a trading pit is hardly a requirement for liquidity. The existence of a guaranteed market for standardized options as implied by options exchanges (whether pit-based or electronic) further gives a misleading appearance of high liquidity. There is also a very large market for customized over-the-counter options. It is a misconception to think that these options are not liquid when they are simply not standardized. If an investor can create a highly customized long position in an option, that investor should be able to create a highly customized short position in the same option at a later date before expiration. If both options are created through the same dealer, they will usually be treated as an offset, as they would if they were standardized options clearing through a clearinghouse. If the two transactions are not with the same dealer, they would both remain alive, but the market risks would offset. Only the credit risk, a factor we ignore in this paper, would remain. Hence, these seemingly illiquid options are, for all practical purposes, liquid.²

In terms of notional value outstanding, derivatives markets declined in both over-the-counter and exchange-traded transactions during the 2007–2009 global financial crisis (GFC) period, as counterparty and credit concerns became pre-eminent. However, during the 2010–2011 second stage of the GFC, markets rebounded and by June 2011 outstandings reached new levels which highlight the importance these contracts continue to play in the day-to-day risk management and trading activities of corporations and financial intermediaries. The bulk of the contracts traded are interest rate-related instruments and are denominated in either US dollars or Euro. Credit-related instruments remain an important market segment, although outstandings remain at pre-crisis period levels. Of particular concern for regulators is the role of non-bank financial intermediaries, which are the main counterparty to derivatives transactions. While their share of the market remains unchanged over the last decade, outstandings overall have increased more than fourfold. The present volume considers the issues that participants face in today's derivatives markets including the potential impact of derivatives on economic stability, pricing issues, modelling as well as model performance and the application of derivatives for risk management and corporate control.