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This paper compares alternative estimation procedures for multi-level factor models which imply blocks of zero restrictions on the associated matrix of factor loadings. We suggest a sequential least squares algorithm for minimizing the total sum of squared residuals and a two-step approach based on canonical correlations that are much simpler and faster than Bayesian approaches previously employed in the literature. An additional advantage is that our approaches can be used to estimate more complex multi-level factor structures where the number of levels is greater than two. Monte Carlo simulations suggest that the estimators perform well in typical sample sizes encountered in the factor analysis of macroeconomic data sets. We apply the methodologies to study international comovements of business and financial cycles.

This chapter examines herd behavior across national borders. A dynamic latent factor model with Gibbs sampling is used to decompose the national herd behavior into the world, regional, and country-specific components. Testing the daily data from 2000 through 2014 for 47 countries, we find that the impact of world factor on national herd behavior is short-lived. This study indicates that world and regional factors play a significant role in explaining the variations of national herd behavior, constituting 33% of the herding variability. The significance of world and regional components is likely to produce a biased herding estimator.

We consider whether there has been a gradual decoupling of the Australian business cycle from its trading partners in Europe and North America and a closer convergence toward its trading partners in Asia. We set up a dynamic latent factor model to estimate common dynamic components or factors for the real GDP growth rate of 19 countries. From variance decomposition over the 1991–2009 sample, we find that a global factor contributed the most in explaining Australian output growth variations, followed by a European factor, an Asian factor, and finally a North American factor. However, the correlation between Australian output growth movements and the Asian business cycle factor evolved from negative and small to positive and large after 2002. The European and North American factors were negatively correlated with Australian output growth for most of the sample period before turning positive in the global financial crisis of 2007–2008. This evidence supports the hypothesis that the Australian economy has decoupled to some extent from Europe, was not much coupled with North America except insofar as the United States drove the global factor, and has increasingly become positively coupled with Asia.

Recently East Asian policymakers have focused on facilitating corporate bond market development through a host of financial market reforms including greater foreign participation in the domestic markets as issuers and investors. However, the alternate approach – the encouragement of domestic issuers to further tap international markets – remains largely ignored. The objective of this study is to investigate these issues in the context of reform undertaken by Thailand following the Asian Crisis of 1997. As a small and open economy, Thailand was forced to become more receptive to foreign investment and capital market participation. We raise the significance of bond return volatility and skewness as an impediment to greater involvement by international investors. Empirical analysis highlights the time-varying nature of both variance and skewness of bond returns, which can only be overcome through government policy that focuses upon stabilizing the macroeconomic environment and not simply enhancing domestic and regional financial market infrastructure.

This paper focuses on the impact of country and sector effects in Asia Pacific equity market returns. Our study concludes that Asia Pacific market returns are mainly driven by country effects. Accordingly, country diversification is the most useful tool for managing portfolio risk. Recent evidence from developed markets indicates that country effect is no longer dominant and that sector exposure is of increasing significance in managing portfolio risk. We observed the same phenomenon; the difference is that it happened after the crisis period, not during the period as observed in the previous study.

A Bayesian probit model with individual effects that exhibit spatial dependencies is set forth. Since probit models are often used to explain variation in individual choices, these models may well exhibit spatial interaction effects due to the varying spatial location of the decision makers. That is, individuals located at similar points in space may tend to exhibit similar choice behavior. The model proposed here allows for a parameter vector of spatial interaction effects that takes the form of a spatial autoregression. This model extends the class of Bayesian spatial logit/probit models presented in LeSage (2000) and relies on a hierachical construct that we estimate via Markov Chain Monte Carlo methods. We illustrate the model by applying it to the 1996 presidential election results for 3,110 U.S. counties.

This study investigated four different economic level areas of China (Shanghai, Shandong, Shaanxi, and Guizhou) to analyze the eastern and western urban and rural media service status at different development stages. This set of data comes from the comparison of regional urban and rural areas and indicates the various aspects of differences in the survey area, including the media use habits, media resources, media consumer demand, evaluation of media services, the role of media in public life, public knowledge level, and so on. On analyzing data comprehensively, one thing can be found that there is a positive correlation between the public media contact degree and the public knowledge level. The media plays an extremely important role in public life and regional public knowledge gap between urban and rural areas exists. Furthermore, this gap is positively correlated to the media resources and media exposure. The trend of media using on mobile phone and computer in urban areas increases significantly greater than in rural areas. Then, how to narrow the urban–rural and regional public knowledge gap and reduce the negative impact of the digital divide will be an important urgent task.

This study empirically identifies three strategies for creating shareholder value for firms who venture into Emerging markets (EMs) in search of corporate growth and profitability.

To uncover these value creating strategies, we apply Cluster analysis techniques, analysis of variance as well as survey several qualitative case-studies of firms who have entered EMs worldwide.

Our findings demonstrate how firms can – and do – tap into the potential that EMs offer, despite the inherent riskiness of these markets and/or constraints on corporate resources. Statistically, no single shareholder value creating strategy is more (or less) remunerative than other strategies. Many equally profitable trajectories coexist vis-à-vis corporate growth in EMs.

Our findings are based on stock-markets’ expectations of firm performance; these expectations may not correspond to the actual future firm performance.

The principles we have isolated have a broad appeal because they identify variety of paths that facilitate shareholder value creation via participation in EMs. We expose the inner workings of these trajectories and illustrate particular firm-specific and location-specific combinations associated with profitable EM ventures.

This study seriously challenges the conventional view that value creation is a function of singular positive influences. On the contrary, this study establishes that value creation is multi-dimensional and submits that a more refined way to augment performance is to develop an ability to combine relevant firm-specific and location-specific factors so that they can, if needed, offset the impositions of each other.

This chapter is aimed at contributing to the question of how institutional reforms affect multi-level governance (MLG) capacities and thus the performance of public task fulfillment with a particular focus on the local level of government in England, France, and Germany.

Drawing on concepts of institutional evaluation, we analytically distinguish six dimensions of impact assessment: vertical coordination; horizontal coordination; efficiency/savings; effectiveness/quality; political accountability/democratic control; equity of service standards. Methodologically, we rely on document analysis and expert judgments that could be gleaned from case studies in the three countries and a comprehensive evaluation of the available secondary data in the respective national and local contexts.

Institutional reforms in the intergovernmental setting have exerted a significant influence on task fulfillment and the performance of service delivery. Irrespective of whether MLG practice corresponds to type I or type II, task devolution (decentralization/de-concentration) furthers the interlocal variation and makes the equity of service delivery shrink. There is a general tendency of improved horizontal/MLG type I coordination capacities, especially after political decentralization, less in the case of administrative decentralization. However, decentralization often entails considerable additional costs which sometimes overload local governments.

The distinction between multi-purpose territorial organization/MLG I and single-purpose functional organization/MLG II provides a suitable analytical frame for institutional evaluation and impact assessment of reforms in the intergovernmental setting. Furthermore, comparative research into the relationship between MLG and institutional reforms is needed to reveal the explanatory power of intervening factors, such as the local budgetary and staff situation, local policy preferences, and political interests in conjunction with the salience of the transferred tasks.

The findings provide evidence on the causal relationship between specific types of (vertical) institutional reforms, performance, and task-related characteristics. Policy-makers and government actors may use this information when drafting institutional reform programs and determining the allocation of public tasks in the intergovernmental setting.

In general, the euphoric expectations placed upon decentralization strategies in modern societies cannot straightforwardly be justified. Our findings show that any type of task transfer to lower levels of government exacerbates existing disparities or creates new ones. However, the integration of tasks within multi-functional, politically accountable local governments may help to improve MLG type I coordination in favor of local communities and territorially based societal actors, while the opposite may be said with regard to de-concentration and the strengthening of MLG type II coordination.

The chapter addresses a missing linkage in the existing MLG literature which has hitherto predominantly been focused on the political decision-making and on the implementation of reforms in the intergovernmental settings of European countries, whereas the impact of such reforms and of their consequences for MLG has remained largely ignored.

Water has been called the oil of the 21st century. Global water consumption is rising steeply and the lack of adequate supplies of quality water is a problem in many parts of the world. Water is one of the most abundant elements of earth, covering nearly 1,400 million cubic kilometers, nearly 70 percent of the planet's surface. However, only a very minor portion of this huge volume is actually usable. The rest forms oceans and polar ice caps. Availability of usable water is further limited by the fact that it cannot be easily exported over long distances.