Private investment in Latin America by citizens of the United States, as well as in other less-developed areas of the world, is widely regarded as a valuable—if not an indispensable—component of the overall U.S. foreign assistance program. By quickly identifying and exploring promising new business opportunities, and by providing financial resources and human skills required to translate them into going ventures, U.S. investment activities can make a vital contribution to economic development. Recognizing the role of private investment in furthering its national interests, the U.S. government has for a number of years sought to promote the flow of new investment: a rapidly growing investment guarantee program, direct government loans to eligible private investors, and investment information services are some of the instruments employed by the government in pursuing this objective. To provide additional incentives, a bill currently before Congress stipulates that U.S. investors making certain kinds of new investments in eligible, less-developed countries would be permitted to deduct 30 per cent of the cost of the investment from their total federal income-tax obligations.
"The definitive guide to private equity for investors, finance professionals, managers and business owners. Mastering Private Equity: Growth via Venture Capital, Minority Investments & Buyoutspresents a valuable on-demand tool and unique handbook for investors, finance professionals, managers and business owners looking to engage with private equity or venture firms. The book distills the essence of private equity into core concepts ranging from fundraising over investment process execution to institutional investors building and managing a private equity fund portfolio, always referring to standard market practice across all steps of the private equity life cycle. The book is complimented by Private Equity in Action: Case Studies from Developed and Emerging Markets, an INSEAD case book which provides rich, real-life applications of these core concepts. The complexity of the private equity model continues to confuse industry outsiders, with the success of the industry often attributed either to a mystical & ldquo;secret sauce & rdquo; or a ruthless approach to cost cutting and asset stripping. In the authors & rsquo; experience, however, the competitive advantage of private equity comes from the diligent application of best practices, as described in this book, a corporate governance model which provides alignment of interest among managers and owners, a keen focus on major drivers of risk and opportunity and, above all, a lot of hard work. This book provides a comprehensive, unbiased guide to investing market practices, enabling its readers to better understand the inner workings of the private equity model. It can equally serve as a standard introduction for investment professionals new to the field, as a reference book for specific steps along the investment process, or as a comprehensive overview of the mechanics of private equity to students of alternative investing. Each diligently researched and concisely presented chapter focuses on one specific aspect of private equity and is complemented by a comment from a guest author, all of whom are seasoned private equity and venture capital professionals or founding partners of established funds. The team of experienced authors ensures the right balance of academic rigor and industry relevancy, given their experience in the world of alternative investments and their regular engagement with both PE investors and the fund managers themselves. The chapters and case studies have been refined through in-class discussion at one of the world & rsquo;s preeminent business schools, INSEAD, and bolstered by the research engine of the Global Private Equity Initiative (GPEI), a leading private equity research institution"--
Purpose Building on the institutional theory perspective on corporate governance change and based on interviews with investor relations (IR) managers in large Japanese companies, this study aims to examine Japanese IR managers' perceptions of the influence of foreign shareholders on Japan's corporate governance reform and stakeholder-based system. The paper examines tensions, conflicts and collaborations among different stakeholders involved in corporate governance changes in Japan, especially in the areas of firm ownership, employment relations and boards of directors. The paper explains why convergence does not happen in some large Japanese companies by investigating Japanese managers' responses to and perceptions of foreign shareholders in multiple corporate contexts.
Design/methodology/approach The author conducted in-depth interviews with ten IR managers at large, listed Japanese companies in Kyoto and Tokyo and two managers at foreign investment banks in Tokyo, between 2018 and 2021.
Findings This paper explores five themes that emerged from my interviews: Chief executive officers' (CEOs') mixed perceptions of foreign investors, the effectiveness of CEO compensation and outside directors, managers' reluctance to accept stock price-driven business strategies, foreign investors' engagement vs investments in index funds and gender patterns, including the effectiveness of token female outside directors. The Japanese companies the author looked at incorporated foreign shareholders as consultants and adopted a few major shareholder-based customs, such as CEOs communicating with investors, having outside directors, increasing CEO compensation and slimming down unprofitable parts of the business via restructuring and downsizing. Simultaneously, they resisted a few major shareholder-based practices. Foreign shareholders' pressure revealed tensions and contradictions between the Japanese stakeholder system and shareholder primacy-based customs.
Originality/value This paper is one of the few qualitative studies that explores Japanese IR managers' responses to and perceptions of foreign shareholders in corporate governance reform, with a particular focus on ownership, employment relations and board members. This paper provides examples of tension, conflict and cooperation between Japanese managers and foreign investors, as seen through the eyes of Japanese IR managers. Examining changes in Japan's stakeholder-based system of corporate governance reform enables us to better understand the processes by which, with vigorous pressure from government and foreign shareholders, a non-western country like Japan may adopt shareholder-based customs and how such a change may also lead to institutional changes.
Defence date: 29 April 2015 ; Examining Board: Prof. Árpád Ábrahám, EUI, Supervisor; Prof. Mark A. Aguiar, Princeton University; Prof. Rodolfo Manuelli, Washington University in St. Louis and Fed St. Louis; Prof. Ramon Marimon, EUI. ; This dissertation contains two lines of research: the allocation of talent and development; and sovereign default. The first chapter contributes to the policy debate on whether the rapid growth of the US financial sector is socially desirable. I propose a heterogeneous agent model with asymmetric information and matching frictions that produces a tradeoff between finance and entrepreneurship. By becoming bankers, talented individuals efficiently match investors with entrepreneurs, but do not internalize the negative effect on the pool of talented entrepreneurs. Thus, the financial sector is inefficiently large in equilibrium, and this inefficiency increases with wealth inequality. The model explains the simultaneous growth of wealth inequality and finance in the US, and why more unequal countries have larger financial sectors. The second chapter explains the simultaneous growth of the services sector and income inequality by studying an endogenous educational choice of heterogeneous agents in the form of talent. There are two mechanisms of financing higher education: bequests and loans. The model with bequests predicts an endogenous and permanent separation of the population between the rich and the poor. The model with loans allows for social mobility, but still generates a persistent level of inequality. On the transition from the traditional economy with bequests to the economy with loans, the model qualitatively reproduces the dynamics of skill supply, the college wage premium, tuition fees and the labor allocation between sectors in the last century in the US. The third chapter provides a novel theory to explain why sovereigns borrow on both domestic and international markets and why defaults are mostly selective (on either domestic or foreign investors). Domestic debt issuance can only smooth tax distortion shocks, whereas foreign debt can also smooth productivity shocks. If the correlation of these shocks is sufficiently low, the sovereign borrows on both markets to avoid excess consumption volatility. Defaults on both types of investors arise in equilibrium due to market incompleteness and the government's limited commitment. The model matches business cycle moments and frequencies of different types of defaults in emerging economies. We also find, contrary to existing contributions, that secondary markets are likely to increase the risk of sovereign defaults. The outcome of the trade in bonds on secondary markets depends on how well each group of investors can coordinate their actions.
(Introduction, initial paragraphs) For more than a century, diversified longhorizon investors in America's stock market have invariably received much higher returns than investors in bonds: a return gap averaging some six percent per year that Rajnish Mehra and Edward Prescott (1985) labeled the "equity premium puzzle." The existence of this equity return premium has been known for generations: more than eighty years ago financial analyst Edgar L. Smith(1924) publicized the fact that longhorizon investors in diversified equities got a very good deal relative to investors in debt: consistently higher longrun average returns with less risk. It was true, Smith wrote three generations ago, that each individual company's stock was very risky: "subject to the temporary hazard of hard times, and [to the hazard of] a radical change in the arts or of poor corporate management." But these risks could be managed via diversification across stocks: "effectively eliminated through the application of the same principles which make the writing of fire and life insurance policies profitable." Edgar L. Smith was right. Common stocks have consistently been extremely attractive as longterm investments. Over the half century before Smith wrote, the Cowles Commission index of American 3 stock prices deflated by consumer prices shows an average real return on equities of 6.5 percent per year— compared to an average real longterm government bond return of 3.6 percent and an average real bill return of 4.5 percent. 1 Since the start of the twentieth century, the Cowles Commission index linked to the Standard and Poor's Composite shows an average real equity return of 6.0 percent per year, compared to a real bill return of 1.6 percent per year and a real longterm government bond return of 1.8 percent per year. Since World War II equity returns have averaged 6.9 percent per year, bill returns 1.4 percent per year, and bond returns 1.1 percent per year. Similar gaps between stock and bond and bill returns have typically existed in other economies. Mehra (2003) 2 reports an annual equity return premium of 4.6 percent in postWorld War II Britain, 3.3 percent in Japan since 1970, and 6.6 percent and 6.3 percent respectively in Germany and Britain since the mid1970s.
Chinese foreign direct investment in the United States -- Chinese investments and U.S. legal and regulatory institutions -- State ownership and Chinese investors' reactions to U.S. institutions -- Chinese companies in the U.S. tax system -- Chinese companies and the U.S. employment law -- Chinese companies and the U.S.. national security review -- Implications and questions for the future
This report traces the consequences of the ""Arab Spring"" for labour markets in the wake of a surge in commodity and energy prices; the impacts of a global recession on public revenues; increased uncertainty for investors; a rise in unemployment; and greater demands for social justice. It concludes that economic growth in the next decade hinges on good governance to enable structural and institutional reforms
The backdrop -- Caste and economic identity of the Marwari community -- The history of migration of the Marwaris to the region : factors and forces -- Communication network and business ventures : a historical overview -- Emergence of the Marwaris in the region -- The early occupations : from money-lenders to money-investors -- Marwaris as traders and a business group in the districts -- The integrated outlook of the Marwaris in the region -- Concluding remarks
The capital asset pricing model (CAPM) is an influential paradigm in financial risk management. It formalizes mean-variance optimization of a risky portfolio given the presence of a risk-free investment such as short-term government bonds. The CAPM defines the price of financial assets according to the premium demanded by investors for bearing excess risk.
Countries are increasingly relying on corporate tax incentives to attract FDI. However, governments often overestimate the role of these instruments in swaying investors, translating to lost tax revenue, market distortions, and other unintended consequences. This Perspective provides good practice guidelines for policymakers to adopt incentives in a strategic, cost-effective manner.
In: Lu , L & Lu , L 2017 , ' Unveiling China's Stock Market Bubble : Margin Financing, the Leveraged Bull and Governmental Responses ' , Journal of International Banking Law and Regulation , vol. 32 , no. 4 , pp. 146-160 .
From 2014–15, China witnessed a super bull in its stock market, as the major SSE Composite Index was more than doubled, but it was followed by an unprecedented crash triggering a global sell-off. This article argues that margin trading, which means investors that borrow money from stock brokers or shadow banks to purchase shares, accounted for the stock bubble.
The populist reaction renders interest groups politics a less important determinant of economic policy than ideologically driven nationalism. Risk to MNEs and FDI will increase as policy becomes less predictable and "rational" arguments have less traction. Investors and corporations must address legitimate grievances and take nationalism into account in decision-making.
The populist reaction renders interest groups politics a less important determinant of economic policy than ideologically driven nationalism. Risk to MNEs and FDI will increase as policy becomes less predictable and "rational" arguments have less traction. Investors and corporations must address legitimate grievances and take nationalism into account in decision-making.
For more than 50 years, the Senegal River delta and Lake Guiers area has seen constant growth in hydro-agricultural developments. Today, the goals of food sovereignty and economic growth assigned to the agricultural sector by the government are being put forward to justify the arrival of agro-industrial investors, raising questions about the future of the region.
Several public enterprises in Singapore have been privatised after being criticised for their dominance in the economy. Others continue their pioneering role in expanding international operations especially in telecommunications and information technology. International diversification, visibility and technological advancement will ensure that their share will be well subscribed by both domestic and foreign investors in due course.