Blockchain, or “distributed ledger” technology, has been devised as an alternative to the law of finance. While it has become clear by now that regulation in the public interest is necessary, for example to avoid money laundering, drug dealing or tax evasion, the particularly thorny issues of private law have been less discussed. These include, for instance, the right to reverse an erroneous transfer, the ownership of stolen coins and the effects of succession or bankruptcy of a bitcoin holder. All of these questions require answers from a legal perspective because the technology ignores them. Particular difficulties arise when one tries to apply a property analysis to the blockchain. Surprisingly, it is far from clear how virtual currencies and other crypto assets are transferred and acquired. The traditional requirements posed by private law, such as an agreement between the parties and the transfer of possession, are incompatible with the technology. Moreover, the idea of a “void” or “null” transfer is hard to reconcile with the immutability that characterizes the blockchain. Before any such questions can be answered, it is necessary to determine the law governing blockchain transfers and assets. This is the point where conflict of laws, or “private international law”, comes into play. Conflicts lawyers are used to submitting legal relations to the law of the country with the most significant connection. But seemingly insurmountable problems occur because decentralized ledgers with no physical connecting factors do not lend themselves to this type of “localization” exercise. The issue of this paper therefore is: How can blockchain be squared with traditional categories of private law, including private international law? The proposal made herein avoids the recourse to a newly fashioned “lex digitalis” or “lex cryptographica”. Rather, it is suggested that the problems can be solved by using existing national laws, supplemented by an international text. At the same time, the results produced by DLT should also be accepted as legally protected and corrected only where necessary under the applicable national rules. In this way, a symbiosis between private law and innovative technology can be created.
{"title":"Who Owns Bitcoin? Private Law Facing the Blockchain","authors":"Matthias B. Lehmann","doi":"10.2139/ssrn.3402678","DOIUrl":"https://doi.org/10.2139/ssrn.3402678","url":null,"abstract":"Blockchain, or “distributed ledger” technology, has been devised as an alternative to the law of finance. While it has become clear by now that regulation in the public interest is necessary, for example to avoid money laundering, drug dealing or tax evasion, the particularly thorny issues of private law have been less discussed. These include, for instance, the right to reverse an erroneous transfer, the ownership of stolen coins and the effects of succession or bankruptcy of a bitcoin holder. All of these questions require answers from a legal perspective because the technology ignores them. \u0000 \u0000Particular difficulties arise when one tries to apply a property analysis to the blockchain. Surprisingly, it is far from clear how virtual currencies and other crypto assets are transferred and acquired. The traditional requirements posed by private law, such as an agreement between the parties and the transfer of possession, are incompatible with the technology. Moreover, the idea of a “void” or “null” transfer is hard to reconcile with the immutability that characterizes the blockchain. \u0000 \u0000Before any such questions can be answered, it is necessary to determine the law governing blockchain transfers and assets. This is the point where conflict of laws, or “private international law”, comes into play. Conflicts lawyers are used to submitting legal relations to the law of the country with the most significant connection. But seemingly insurmountable problems occur because decentralized ledgers with no physical connecting factors do not lend themselves to this type of “localization” exercise. \u0000 \u0000The issue of this paper therefore is: How can blockchain be squared with traditional categories of private law, including private international law? The proposal made herein avoids the recourse to a newly fashioned “lex digitalis” or “lex cryptographica”. Rather, it is suggested that the problems can be solved by using existing national laws, supplemented by an international text. At the same time, the results produced by DLT should also be accepted as legally protected and corrected only where necessary under the applicable national rules. In this way, a symbiosis between private law and innovative technology can be created.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126469227","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper tests the Fama-French five-factor asset-pricing model on average stock returns for emerging and selected developed equity markets. We deploy the GMM regression on 313 weekly data observations for the period January 2010 through December 2015. Unlike studies in developed countries, we find that the profitability factor is the most useful for explaining the cross-section of emerging markets equity returns. Surprisingly, our tests reject the market factor for many countries and emerging markets in general. The five-factor model performs dismally on country-specific portfolios and on geographically diversified portfolios using the GRS tests. Our results are broadly similar to those of studies that use Australian, Chinese and South African data but contrary to studies examining American and Japanese data.
{"title":"The Fama-French Five-Factor Asset Pricing Model and Emerging Markets Equity Returns","authors":"Selebogo Mosoeu, Odongo Kodongo","doi":"10.2139/ssrn.3377918","DOIUrl":"https://doi.org/10.2139/ssrn.3377918","url":null,"abstract":"This paper tests the Fama-French five-factor asset-pricing model on average stock returns for emerging and selected developed equity markets. We deploy the GMM regression on 313 weekly data observations for the period January 2010 through December 2015. Unlike studies in developed countries, we find that the profitability factor is the most useful for explaining the cross-section of emerging markets equity returns. Surprisingly, our tests reject the market factor for many countries and emerging markets in general. The five-factor model performs dismally on country-specific portfolios and on geographically diversified portfolios using the GRS tests. Our results are broadly similar to those of studies that use Australian, Chinese and South African data but contrary to studies examining American and Japanese data.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115093105","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EU countries have traditionally protected trade secrets in different ways but after the adoption of the EU Directive on the protection of trade secrets (TSD) they now have to change their ways and implement the common provisions. However, defining the room of maneuverer which is left for national legislators and courts is a complicated matter not least because the Directive relies on a complicated mix of minimum standards and maximum obligations. Using examples from the Nordic countries this article first uses general principles of EU law to identify the floors and ceilings of the TSD and then assesses some of the choices made by the Nordic countries and identifies outstanding issues.
{"title":"From Smorgasbord to New Nordic Cuisine - Eu-Harmonization of Trade Secrets Protection in the Nordic Countries","authors":"Jens Schovsbo","doi":"10.2139/ssrn.3366894","DOIUrl":"https://doi.org/10.2139/ssrn.3366894","url":null,"abstract":"EU countries have traditionally protected trade secrets in different ways but after the adoption of the EU Directive on the protection of trade secrets (TSD) they now have to change their ways and implement the common provisions. However, defining the room of maneuverer which is left for national legislators and courts is a complicated matter not least because the Directive relies on a complicated mix of minimum standards and maximum obligations. Using examples from the Nordic countries this article first uses general principles of EU law to identify the floors and ceilings of the TSD and then assesses some of the choices made by the Nordic countries and identifies outstanding issues.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121891863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide a methodology to estimate a global credit risk factor from credit default swap (CDS) spreads that can be very useful for risk management. The global risk factor (GRF) reproduces quite well the different episodes that have affected the credit market over the sample period. It is highly correlated with standard credit indices, but it contains much higher explanatory power for fluctuations in CDS spreads across sectors than the credit indices themselves. The additional information content over iTraxx seems to be related to some financial interest rates. We first use the estimated GRF to analyze the extent to which the eleven sectors we consider are systemic. After that, we use it to split the credit risk of individual firms into systemic, sectorial, and idiosyncratic components, and we perform some analyses to test that the estimated idiosyncratic components are actually firm-specific. The systemic and sectorial components explain around 65% of credit risk in the European industrial and financial sectors and 50% in the North American sectors, while 35% and 50% of risk, respectively, is of an idiosyncratic nature. Thus, there is a significant margin for portfolio diversification. We also show that our decomposition allows us to identify those firms whose credit would be harder to hedge. We end up analyzing the relationship between the estimated components of risk and some synthetic risk factors, in order to learn about the different nature of the credit risk components.
{"title":"Splitting Credit Risk into Systemic, Sectorial and Idiosyncratic Components","authors":"A. Novales, Álvaro Chamizo","doi":"10.2139/ssrn.3322246","DOIUrl":"https://doi.org/10.2139/ssrn.3322246","url":null,"abstract":"We provide a methodology to estimate a global credit risk factor from credit default swap (CDS) spreads that can be very useful for risk management. The global risk factor (GRF) reproduces quite well the different episodes that have affected the credit market over the sample period. It is highly correlated with standard credit indices, but it contains much higher explanatory power for fluctuations in CDS spreads across sectors than the credit indices themselves. The additional information content over iTraxx seems to be related to some financial interest rates. We first use the estimated GRF to analyze the extent to which the eleven sectors we consider are systemic. After that, we use it to split the credit risk of individual firms into systemic, sectorial, and idiosyncratic components, and we perform some analyses to test that the estimated idiosyncratic components are actually firm-specific. The systemic and sectorial components explain around 65% of credit risk in the European industrial and financial sectors and 50% in the North American sectors, while 35% and 50% of risk, respectively, is of an idiosyncratic nature. Thus, there is a significant margin for portfolio diversification. We also show that our decomposition allows us to identify those firms whose credit would be harder to hedge. We end up analyzing the relationship between the estimated components of risk and some synthetic risk factors, in order to learn about the different nature of the credit risk components.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128330080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article looks at insurance companies in the UK. The insurance industry is an important contributor to the economy, a major employer and a significant source of overseas earnings. Insurance industry helps businesses to protect themselves from risk and provides a wide range of services to people. But what is the mean of the term insurance? Insurance is a service and a promise to pay if the insured event occurs. This means that the purpose of insurance is to help to manage the negative effects of risk on our personal and working lives. Insurance is a highly effective risk-transfer mechanism because it allows for the effects of the risk to be passed from the insured to the insurer. In return for accepting this risk, the insurer charges a premium that reflects the level of risk it is accepting from the insured. Insurance is an intangible product. There is no physical evidence of the purchase beyond a policy document. An insurance company or insurer or underwriter is the business, which takes on the risks in the insurance policy. In contrast, an intermediary sells or advises on insurance policies. Examples of intermediaries are: insurance brokers, insurance consultants, independent financial advisers, accounts and solicitors, banks and building societies, travel agents, and estate agents.
{"title":"The UK Insurance Market","authors":"Michel Guirguis","doi":"10.2139/ssrn.3253122","DOIUrl":"https://doi.org/10.2139/ssrn.3253122","url":null,"abstract":"This article looks at insurance companies in the UK. The insurance industry is an important contributor to the economy, a major employer and a significant source of overseas earnings. Insurance industry helps businesses to protect themselves from risk and provides a wide range of services to people. But what is the mean of the term insurance? Insurance is a service and a promise to pay if the insured event occurs. This means that the purpose of insurance is to help to manage the negative effects of risk on our personal and working lives. Insurance is a highly effective risk-transfer mechanism because it allows for the effects of the risk to be passed from the insured to the insurer. In return for accepting this risk, the insurer charges a premium that reflects the level of risk it is accepting from the insured. Insurance is an intangible product. There is no physical evidence of the purchase beyond a policy document. An insurance company or insurer or underwriter is the business, which takes on the risks in the insurance policy. In contrast, an intermediary sells or advises on insurance policies. Examples of intermediaries are: insurance brokers, insurance consultants, independent financial advisers, accounts and solicitors, banks and building societies, travel agents, and estate agents.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130117985","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Manufacturing digitalization promises to transform how products are designed, fabricated, used, and serviced, but more needs to be done to facilitate the uptake of digital technologies by manufacturers in the United States, Korea, and beyond.
{"title":"Manufacturing Digitalization: Extent of Adoption and Recommendations for Increasing Penetration in Korea and the U.S.","authors":"Stephen Ezell, R. Atkinson, I. Kim, Jaehan Cho","doi":"10.2139/ssrn.3264125","DOIUrl":"https://doi.org/10.2139/ssrn.3264125","url":null,"abstract":"Manufacturing digitalization promises to transform how products are designed, fabricated, used, and serviced, but more needs to be done to facilitate the uptake of digital technologies by manufacturers in the United States, Korea, and beyond.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"104 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115677745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Employment in the public and social services sector is on a rising trend in Korea, in terms not only of the number of jobs, but also of the share of these jobs within the whole economy. The latest data suggests that this sector could soon account for more than 20% of total employment.
This trend is likely to continue under the current government. This is because, for instance, the Moon Jae-in administration has included detailed and explicit plans for job creation in this sector (Tasks 16 and 17) in its 100 Policy Tasks. Also, cross-sectional evidence from European countries suggests the possibility that this sector’s employment expands with income level, as explained below. Against this background, and given Europe’s reputation for high levels of development in this sector, this Brief looks at the public and social services employment in Europe and draws policy implications for Korea.
{"title":"Public and Social Services Employment in Europe and its Implications for Korea","authors":"D. Joe","doi":"10.2139/ssrn.3299381","DOIUrl":"https://doi.org/10.2139/ssrn.3299381","url":null,"abstract":"Employment in the public and social services sector is on a rising trend in Korea, in terms not only of the number of jobs, but also of the share of these jobs within the whole economy. The latest data suggests that this sector could soon account for more than 20% of total employment.<br><br>This trend is likely to continue under the current government. This is because, for instance, the Moon Jae-in administration has included detailed and explicit plans for job creation in this sector (Tasks 16 and 17) in its 100 Policy Tasks. Also, cross-sectional evidence from European countries suggests the possibility that this sector’s employment expands with income level, as explained below. Against this background, and given Europe’s reputation for high levels of development in this sector, this Brief looks at the public and social services employment in Europe and draws policy implications for Korea.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122441899","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We establish that cryptocurrency returns are driven and can be predicted by factors that are specific to cryptocurrency markets. Cryptocurrency returns are exposed to cryptocurrency network factors but not cryptocurrency production factors. We construct the network factors to capture the user adoption of cryptocurrencies and the production factors to proxy for the costs of cryptocurrency production. Moreover, there is a strong time-series momentum effect, and proxies for investor attention strongly forecast future cryptocurrency returns.
{"title":"Risks and Returns of Cryptocurrency","authors":"Yukun Liu, Aleh Tsyvinski","doi":"10.2139/ssrn.3226952","DOIUrl":"https://doi.org/10.2139/ssrn.3226952","url":null,"abstract":"\u0000 We establish that cryptocurrency returns are driven and can be predicted by factors that are specific to cryptocurrency markets. Cryptocurrency returns are exposed to cryptocurrency network factors but not cryptocurrency production factors. We construct the network factors to capture the user adoption of cryptocurrencies and the production factors to proxy for the costs of cryptocurrency production. Moreover, there is a strong time-series momentum effect, and proxies for investor attention strongly forecast future cryptocurrency returns.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"130 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122125397","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
C. Larkin, M. Sanders, Isabelle Andresen, Felicity Algate
The use of behavioral science interventions, and particularly social norms, in tax compliance is a growing industry for scholars and practitioners alike in recent years. However, the causal mechanism of these interventions is unknown, where effects could be explained by a pro-social desire to support one’s community, conditional cooperation, desire to conform, or fear of reprisals. We conduct a field experiment in local government taxation in the United Kingdom which tests the effectiveness of a social (descriptive) norm against a control condition and against messages that highlight the enforcement process. The social norm outperforms enforcement salience, suggesting that this explanation, although more powerful than the control, does not fully explain compliance effects. This study further provides evidence that social norm type interventions can be effective at the subnational level, a context where previous work has shown they may produce null effects.
{"title":"Testing Local Descriptive Norms and Salience of Enforcement Action: A Field Experiment to Increase Tax Collection","authors":"C. Larkin, M. Sanders, Isabelle Andresen, Felicity Algate","doi":"10.2139/ssrn.3167575","DOIUrl":"https://doi.org/10.2139/ssrn.3167575","url":null,"abstract":"The use of behavioral science interventions, and particularly social norms, in tax compliance is a growing industry for scholars and practitioners alike in recent years. However, the causal mechanism of these interventions is unknown, where effects could be explained by a pro-social desire to support one’s community, conditional cooperation, desire to conform, or fear of reprisals. We conduct a field experiment in local government taxation in the United Kingdom which tests the effectiveness of a social (descriptive) norm against a control condition and against messages that highlight the enforcement process. The social norm outperforms enforcement salience, suggesting that this explanation, although more powerful than the control, does not fully explain compliance effects. This study further provides evidence that social norm type interventions can be effective at the subnational level, a context where previous work has shown they may produce null effects.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124067327","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze an operational policy for a multinational manufacturer to hedge against exchange rate uncertainties and competition. We consider a single product and single period. Because of long-lead times, the capacity investment must done before the selling season begins when the exchange rate between the two countries is uncertain. we consider a duopoly competition in the foreign country. We model the exchange rate as a random variable. We investigate the impact of competition and exchange rate on optimal capacities and optimal prices. We show how competition can impact the decision of the home manufacturer to enter the foreign market.
{"title":"Optimal Capacity Investment, and Pricing Across International Markets Under Exchange Rate Uncertainty and Duopoly Competition","authors":"M. Erkoc, Huaqing Wang, Anas Ahmed","doi":"10.2139/ssrn.3152729","DOIUrl":"https://doi.org/10.2139/ssrn.3152729","url":null,"abstract":"We analyze an operational policy for a multinational manufacturer to hedge against exchange rate uncertainties and competition. We consider a single product and single period. Because of long-lead times, the capacity investment must done before the selling season begins when the exchange rate between the two countries is uncertain. we consider a duopoly competition in the foreign country. We model the exchange rate as a random variable. We investigate the impact of competition and exchange rate on optimal capacities and optimal prices. We show how competition can impact the decision of the home manufacturer to enter the foreign market.","PeriodicalId":114907,"journal":{"name":"Global Business Issues eJournal","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123422386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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