This paper aims to examine in-depth the events leading up to the partial privatisation in Indonesian State-Owned Banks (SOBs). The paper addresses the following questions: What is the meaning of ‘partial privatisation’ in the banking sector? How has partial privatisation of banking been carried out in Indonesia? What lessons can be learned about the strengths and weaknesses of partial privatisation as a method of reforming SOBs in developing economies?
{"title":"Partial Privatisation in Banking: The Indonesian Experience","authors":"Yuli Rindyawati, C. Gordon","doi":"10.2139/ssrn.1662822","DOIUrl":"https://doi.org/10.2139/ssrn.1662822","url":null,"abstract":"This paper aims to examine in-depth the events leading up to the partial privatisation in Indonesian State-Owned Banks (SOBs). The paper addresses the following questions: What is the meaning of ‘partial privatisation’ in the banking sector? How has partial privatisation of banking been carried out in Indonesia? What lessons can be learned about the strengths and weaknesses of partial privatisation as a method of reforming SOBs in developing economies?","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"58 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115067301","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 current microfinance practices in Kenya and some of the inherent challenges that hinder human development of microfinance clients beyond accessing financial services. As microfinance providers and supporters continue to promote the importance of improving access to financial services amongst micro and small business owners, they will need to augment their microfinance services with basic entrepreneurial training.
{"title":"Creating Value Beyond Microfinance Through Entrepreneurship Development","authors":"J. Matu, T. Kimani","doi":"10.2139/ssrn.1652265","DOIUrl":"https://doi.org/10.2139/ssrn.1652265","url":null,"abstract":"This article looks at current microfinance practices in Kenya and some of the inherent challenges that hinder human development of microfinance clients beyond accessing financial services. As microfinance providers and supporters continue to promote the importance of improving access to financial services amongst micro and small business owners, they will need to augment their microfinance services with basic entrepreneurial training.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"201 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123027395","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}
Émilie Caldeira, Grégoire Rota-Graziosi, M. Foucault
Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on communes' fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions. Cet article applique la theorie du federalisme budgetaire a l'analyse du processus de decentralisation d'un pays en developpement (le Benin) et teste l'existence d'interactions strategiques parmi les juridictions locales du Benin. A partir d'un modele de concurrence budgetaire a 2 juridictions, nous definissons les conditions d'un equilibre de Nash contraint pour capturer les effets d'extreme pauvrete de certaines communes. Nous montrons que des externalites entre communes impliquent des comportements strategiques des decideurs publics locaux pour ceux disposant de ressources budgetaires suffisantes. Ensuite, en estimant un modele d'interactions spatiales, nous montrons la presence d'interactions strategiques pour les communes du Benin, contingentes a leur autonomie budgetaire. De telles interactions emergent parmi les communes geographiquement et ethniquement proches. Par ailleurs, ces interactions surviennent dans le cadre d'un cycle electoral opportuniste de depenses publiques et sont sensibles a l'affiliation partisane des maires. En conclusion, le Benin apparait aussi touche que les democraties developpees par des comportements strategiques en depenses publiques locales.
在不否认撒哈拉以南国家分权的特定维度的情况下，本文将财政联邦制文献中的标准推理应用于一个发展中国家，并测试贝宁地方政府(称为“公社”)之间战略互动的存在。我们首先提出了一个公共支出相互作用的双辖区模型，考虑了约束纳什均衡来捕捉一些社区的极端贫困。我们发现，司法管辖区之间的溢出效应涉及拥有充足财政资源的地方官员的战略行为。其次，通过估算空间滞后模型，我们的分析为贝宁存在战略互动提供了证据，这取决于社区的财政自治。这种相互作用发生在地理上或种族上接近的公社之间。我们还强调了地方政府在地方选举前的机会主义行为和党派关系的影响。这个非洲民主国家似乎与发达民主国家一样关注战略性财政互动。文章《联邦制预算理论的应用》、《权力下放进程的分析》和《贝宁地方司法的存在与互动战略》。一个参与者在两个司法管辖区建立了并行预算模型，在纳什约束条件下建立了平衡条件，在某些社区极端贫困的情况下建立了捕获者效应。外部性的管理是指公共部门的管理、战略和决策、公共场所的管理、资源和预算的管理。Ensuite, en estiement unmodel d'interaction spatiales, nous montrons la presence and 'interaction strateques pour les communes du Benin, contingency a leleautonomie budget。De telles相互作用，涌现的parmi，公社，地理和种族方法。更重要的是，这种相互作用、生存方式和选举机会的循环取决于公众、敏感人士和无党派人士。总而言之，贝宁政府已经接触到民主国家的发展，其发展战略取决于公共场所。
{"title":"Decentralisation in Africa and Fiscal Competition: Evidence from Benin","authors":"Émilie Caldeira, Grégoire Rota-Graziosi, M. Foucault","doi":"10.2139/ssrn.1685905","DOIUrl":"https://doi.org/10.2139/ssrn.1685905","url":null,"abstract":"Without denying particular dimensions of the decentralisation in Sub-Saharan countries, this paper applies standard reasoning from the fiscal federalism literature to a developing country and tests the existence of strategic interactions among local Beninese governments, called communes'. We first propose a two-jurisdiction model of public expenditure interactions, considering a constrained Nash equilibrium to capture the extreme poverty of some communes. We show that spillovers among jurisdictions involve strategic behaviours of local officials who have sufficient levels of fiscal resources. Second, by estimating a spatial lag model, our analysis provides evidence for the presence of strategic interactions in Benin, contingent on communes' fiscal autonomy. Such interactions arise among communes which are geographically or ethnically close. We also highlight both an opportunistic behaviour of local governments before local elections and an effect of partisan affiliations. This African democracy appears to be as concerned as developed democracies with strategic fiscal interactions. Cet article applique la theorie du federalisme budgetaire a l'analyse du processus de decentralisation d'un pays en developpement (le Benin) et teste l'existence d'interactions strategiques parmi les juridictions locales du Benin. A partir d'un modele de concurrence budgetaire a 2 juridictions, nous definissons les conditions d'un equilibre de Nash contraint pour capturer les effets d'extreme pauvrete de certaines communes. Nous montrons que des externalites entre communes impliquent des comportements strategiques des decideurs publics locaux pour ceux disposant de ressources budgetaires suffisantes. Ensuite, en estimant un modele d'interactions spatiales, nous montrons la presence d'interactions strategiques pour les communes du Benin, contingentes a leur autonomie budgetaire. De telles interactions emergent parmi les communes geographiquement et ethniquement proches. Par ailleurs, ces interactions surviennent dans le cadre d'un cycle electoral opportuniste de depenses publiques et sont sensibles a l'affiliation partisane des maires. En conclusion, le Benin apparait aussi touche que les democraties developpees par des comportements strategiques en depenses publiques locales.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"87 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124162425","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}
The paper examines the economic implications of Belarus' participation in the newly created EURASEC Customs Union. The results of the calculations show that after the introduction of a common external tariff (CET) the level of tariff protection in Belarus has not increased noticeably. The reduction in the volume of imports from non-CIS countries equal to USD 1.1 bn (8% of Belarusian non-CIS import in 2008) will be mainly brought about by cancellation of used cars imports from non-member countries. The analyses revealed that Belarusian budget can benefit from participation in the Customs Union (CU). The amount of possible gain will be about 28.3% of total budget revenues from customs duties and customs charges in 2008 due to the fact that approximately 40% of Russian imports may go through customs clearance in Belarus owning to less bureaucracy at the border with respect to Russia, and the revenues from customs charges, which is not planned to be distributed among member countries, will be transferred to Belarusian budget. However, it is unlikely that CU membership will increase foreign direct investment (FDI) inflow to Belarus, since in the case of South-South regional trade agreements (the type of EURASEC countries CU) FDI usually goes to the bigger country, i.e. to the bigger market. Therefore, most probably that in the regional arrangement in question Russia followed by Kazakhstan will be the main beneficiaries of foreign direct investments.
{"title":"The Customs Union Between Belarus, Kazakhstan and Russia: An Overview of Economic Implications for Belarus","authors":"I. Tochitskaya","doi":"10.2139/ssrn.1670130","DOIUrl":"https://doi.org/10.2139/ssrn.1670130","url":null,"abstract":"The paper examines the economic implications of Belarus' participation in the newly created EURASEC Customs Union. The results of the calculations show that after the introduction of a common external tariff (CET) the level of tariff protection in Belarus has not increased noticeably. The reduction in the volume of imports from non-CIS countries equal to USD 1.1 bn (8% of Belarusian non-CIS import in 2008) will be mainly brought about by cancellation of used cars imports from non-member countries. The analyses revealed that Belarusian budget can benefit from participation in the Customs Union (CU). The amount of possible gain will be about 28.3% of total budget revenues from customs duties and customs charges in 2008 due to the fact that approximately 40% of Russian imports may go through customs clearance in Belarus owning to less bureaucracy at the border with respect to Russia, and the revenues from customs charges, which is not planned to be distributed among member countries, will be transferred to Belarusian budget. However, it is unlikely that CU membership will increase foreign direct investment (FDI) inflow to Belarus, since in the case of South-South regional trade agreements (the type of EURASEC countries CU) FDI usually goes to the bigger country, i.e. to the bigger market. Therefore, most probably that in the regional arrangement in question Russia followed by Kazakhstan will be the main beneficiaries of foreign direct investments.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115540186","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}
For several years, when setting discount rates Damodaran has advocated more consideration of country risk premiums (CRP) when it comes to assessing companies with activities in emerging markets. In this paper we want to perform a systematic analysis and critical discussion of his CRP concept. It will turn out that Damodaran’s concept of a country risk premium (CRP) is of no relevance in academic circles, has no theoretical basis neither is the CRP concept empirically supported. Furthermore, the rates of return on capital that are derived by such methods are highly arbitrary.
{"title":"Damodaran’s Country Risk Premium: A Serious Critique","authors":"L. Kruschwitz, Andreas Loeffler, G. Mandl","doi":"10.2139/ssrn.1651466","DOIUrl":"https://doi.org/10.2139/ssrn.1651466","url":null,"abstract":"For several years, when setting discount rates Damodaran has advocated more consideration of country risk premiums (CRP) when it comes to assessing companies with activities in emerging markets. In this paper we want to perform a systematic analysis and critical discussion of his CRP concept. It will turn out that Damodaran’s concept of a country risk premium (CRP) is of no relevance in academic circles, has no theoretical basis neither is the CRP concept empirically supported. Furthermore, the rates of return on capital that are derived by such methods are highly arbitrary.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126254410","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}
Underdeveloped financial markets and periods of high inflation have stimulated dollarization and currency substitution in the economies of Central Asia. Some authors argue that the latter can pose serious obstacles for the effective conduct of monetary policy and can affect households' welfare. This study uses a model with money-in-the-utility function to estimate the elasticity of substitution between domestic and foreign currencies in three economies of Central Asia - Kazakhstan, the Kyrgyz Republic and Tajikistan. Utility derived from holding money balances is represented by a CES function with money holdings denominated in two currencies. The residents are assumed to diversify their monetary holdings due to instability of the domestic currency. The steady state analysis reveals that though currency substitution decreases governments' seigniorage revenue, holding foreign money can be welfare generating if domestic currency depreciates vis-a-vis the currencies in which households' foreign balances holdings are denominated. De-dollarization can only be achieved through further macroeconomic stabilization that will bring price and exchange rate stability. Financial sector development will also decrease currency substitution through the provision of reliable financial instruments and the gaining of public confidence.
{"title":"Currency Substitution in the Economies of Central Asia: How Much Does it Cost?","authors":"A. Isaková","doi":"10.2139/ssrn.1665043","DOIUrl":"https://doi.org/10.2139/ssrn.1665043","url":null,"abstract":"Underdeveloped financial markets and periods of high inflation have stimulated dollarization and currency substitution in the economies of Central Asia. Some authors argue that the latter can pose serious obstacles for the effective conduct of monetary policy and can affect households' welfare. This study uses a model with money-in-the-utility function to estimate the elasticity of substitution between domestic and foreign currencies in three economies of Central Asia - Kazakhstan, the Kyrgyz Republic and Tajikistan. Utility derived from holding money balances is represented by a CES function with money holdings denominated in two currencies. The residents are assumed to diversify their monetary holdings due to instability of the domestic currency. The steady state analysis reveals that though currency substitution decreases governments' seigniorage revenue, holding foreign money can be welfare generating if domestic currency depreciates vis-a-vis the currencies in which households' foreign balances holdings are denominated. De-dollarization can only be achieved through further macroeconomic stabilization that will bring price and exchange rate stability. Financial sector development will also decrease currency substitution through the provision of reliable financial instruments and the gaining of public confidence.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125564402","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}
China's securities markets are unlike those of Amsterdam, London or New York. Those markets evolved over centuries from myriad interactions among those seeking finance on the one hand and savers seeking rewarding investments on the other. Such spontaneous securities markets did emerge throughout China in the 1980s following the start of economic liberalization, but these spontaneous markets were closed by the government in favor of new and tightly controlled exchanges established in the early 1990s in Shanghai and Shenzhen. These new markets, have been designed to and largely limited to, serving state purposes, that is to assist in the financing of the state sector of the economy. Rather than evolving in a bottom-up pattern, they are controlled, top-down securities markets. This essay reviews as of June 2010, the development of these markets, the economic functions they perform, the regulatory structure that controls and shapes them, and the governance mechanisms - legal and otherwise - that controls the management of the PRC listed companies. These markets represent a signal accomplishment of the Chinese leadership in producing in less than twenty years' modern, albeit not yet fully developed, securities markets. Whether they can be further developed to serve more basic economic role than they have been permitted to play is a question with which the essay concludes.
{"title":"Assessing China's Top-Down Securities Markets","authors":"W. Allen, W. T. Allen, Hanxiao Shen","doi":"10.3386/W16713","DOIUrl":"https://doi.org/10.3386/W16713","url":null,"abstract":"China's securities markets are unlike those of Amsterdam, London or New York. Those markets evolved over centuries from myriad interactions among those seeking finance on the one hand and savers seeking rewarding investments on the other. Such spontaneous securities markets did emerge throughout China in the 1980s following the start of economic liberalization, but these spontaneous markets were closed by the government in favor of new and tightly controlled exchanges established in the early 1990s in Shanghai and Shenzhen. These new markets, have been designed to and largely limited to, serving state purposes, that is to assist in the financing of the state sector of the economy. Rather than evolving in a bottom-up pattern, they are controlled, top-down securities markets. This essay reviews as of June 2010, the development of these markets, the economic functions they perform, the regulatory structure that controls and shapes them, and the governance mechanisms - legal and otherwise - that controls the management of the PRC listed companies. These markets represent a signal accomplishment of the Chinese leadership in producing in less than twenty years' modern, albeit not yet fully developed, securities markets. Whether they can be further developed to serve more basic economic role than they have been permitted to play is a question with which the essay concludes.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"84 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133836611","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}
Pub Date : 2010-07-19DOI: 10.1111/j.1467-9361.2010.00567.x
Baomin Dong, Xuefeng Li, Boqiang Lin
The paper studies the behavior of mid- to long-run real coal price in the Chinese market. The problem is of great importance because the coal takes a 70% share in China's energy mix, and China is the world's second largest carbon emitter. An accurate forecast in coal price is crucial in predicting China's future energy consumption mix as well as the private sector's energy-type-related investment decisions. In estimation and forecasting, the shifting trend time-series model suggested by Robert Pindyck is used to capture the technological progress that is unobservable to the econometrician. It is found that the shifting trend model with continuous and random changes in price level and trend outperforms plain vanilla ARIMA models. It is argued that the model postulated by Pindyck is robust even in a transition economy where energy prices are subject to relatively rigid regulatory control. Out-of-sample forecasts are provided.
{"title":"Forecasting Long-Run Coal Price in China: A Shifting Trend Time-Series Approach","authors":"Baomin Dong, Xuefeng Li, Boqiang Lin","doi":"10.1111/j.1467-9361.2010.00567.x","DOIUrl":"https://doi.org/10.1111/j.1467-9361.2010.00567.x","url":null,"abstract":"The paper studies the behavior of mid- to long-run real coal price in the Chinese market. The problem is of great importance because the coal takes a 70% share in China's energy mix, and China is the world's second largest carbon emitter. An accurate forecast in coal price is crucial in predicting China's future energy consumption mix as well as the private sector's energy-type-related investment decisions. In estimation and forecasting, the shifting trend time-series model suggested by Robert Pindyck is used to capture the technological progress that is unobservable to the econometrician. It is found that the shifting trend model with continuous and random changes in price level and trend outperforms plain vanilla ARIMA models. It is argued that the model postulated by Pindyck is robust even in a transition economy where energy prices are subject to relatively rigid regulatory control. Out-of-sample forecasts are provided.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130786420","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}
Pub Date : 2010-07-19DOI: 10.1111/j.1467-9361.2010.00580.x
Zhongxiu Zhao, Kevin H. Zhang
How does foreign direct investment (FDI) affect China's industrial productivity? While the topic is important, the relevant empirical studies in the literature have been limited. This paper attempts to close the gap by investigating the issue with panel data in the period 2001–06. Empirical models for both productivity level and growth are developed, in which two channels are identified through which FDI may affect industrial productivity directly and indirectly. The estimates suggest that FDI has positive direct and spillovers effect on China's industrial productivity level and growth, and the contribution of FDI to productivity is enhanced by its interaction with China's human capital. While labor-intensive industries benefit more from FDI direct effects, capital-intensive industries gain more from FDI spillover effects.
{"title":"FDI and Industrial Productivity in China: Evidence from Panel Data in 2001–06","authors":"Zhongxiu Zhao, Kevin H. Zhang","doi":"10.1111/j.1467-9361.2010.00580.x","DOIUrl":"https://doi.org/10.1111/j.1467-9361.2010.00580.x","url":null,"abstract":"How does foreign direct investment (FDI) affect China's industrial productivity? While the topic is important, the relevant empirical studies in the literature have been limited. This paper attempts to close the gap by investigating the issue with panel data in the period 2001–06. Empirical models for both productivity level and growth are developed, in which two channels are identified through which FDI may affect industrial productivity directly and indirectly. The estimates suggest that FDI has positive direct and spillovers effect on China's industrial productivity level and growth, and the contribution of FDI to productivity is enhanced by its interaction with China's human capital. While labor-intensive industries benefit more from FDI direct effects, capital-intensive industries gain more from FDI spillover effects.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130131863","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}
Listed companies are now required to establish audit committees where at least one audit committee member must have specialist skill. This article examines the impact of the specialist skill requirement on the developing legal principles relating to directors’ oversight responsibility particularly in context of delegation and reliance. This article shows that in countries that have adopted the dual-standard of care, the specialist skill blends in with the imposition of the subjective standard and does not create a new standard. However, it does expose non-executive director to liability due to the fact that audit committee must comprise only non-executive directors. Using collected data of the enforcement activities of the Malaysian stock exchange, this article also shows that while there seems to be not much threat against directors from private enforcement of breach of directors’ duty of care in Malaysia, the oversight responsibility of both executive and non-executive directors is increasingly being enforced by the stock exchange.
{"title":"Directors' Oversight Responsibility and the Impact of Specialist Skill","authors":"Aiman Nariman Mohd-Sulaiman","doi":"10.2139/ssrn.1635154","DOIUrl":"https://doi.org/10.2139/ssrn.1635154","url":null,"abstract":"Listed companies are now required to establish audit committees where at least one audit committee member must have specialist skill. This article examines the impact of the specialist skill requirement on the developing legal principles relating to directors’ oversight responsibility particularly in context of delegation and reliance. This article shows that in countries that have adopted the dual-standard of care, the specialist skill blends in with the imposition of the subjective standard and does not create a new standard. However, it does expose non-executive director to liability due to the fact that audit committee must comprise only non-executive directors. Using collected data of the enforcement activities of the Malaysian stock exchange, this article also shows that while there seems to be not much threat against directors from private enforcement of breach of directors’ duty of care in Malaysia, the oversight responsibility of both executive and non-executive directors is increasingly being enforced by the stock exchange.","PeriodicalId":188920,"journal":{"name":"INTL: Managing in Emerging Markets (Topic)","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131095031","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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