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Research Roundup: Foreign Diversification, Social Comparisons and Consumer Identity
Is investing in foreign stocks still a good strategy for offsetting risk and boosting returns in your portfolio? How do social comparisons impact on the different dimensions of trust that people can have for each other? How can companies use emotional cues to convey a particular identity to consumers? Wharton professors Karen Lewis, Maurice Schweitzer and Patti Williams, respectively, examined these issues – and what they mean for business and consumers – in recent research papers.
From: May 21, 2013
Asian Partners: How Korea is Overlooked in Coming Fourth
South Korea – officially the Republic of Korea – has Asia's fourth-largest economy and is Australia's fourth-largest trading partner, a relationship in which Australia enjoys a significant surplus. Yet Korean was omitted as a priority language in the Australian government's future blueprint, the Asian Century White Paper. Chung-Sok Suh, from the Korea Research Institute at the Australian School of Business, is at the heart of efforts to expand collaboration with our affluent regional neighbour. He notes existing ties but sees plenty of scope for improvement and further opportunities. Companies need to understand that Korean business culture is different to that of Japan or China.
From: May 21, 2013
Accounting in Progress: Have Rising Standards Improved Earnings Quality in China?
A lack of transparency in the accounts of listed Chinese companies has long sounded warning bells for outside investors, particularly in the context of an insider economy with weak legal enforcement and low investor protection. But China has made great strides in adopting international financial accounting standards during the past 20 years. Researchers from the Australian School of Business have found this progress has improved earnings quality, though not across the board. In some cases, improving quality in one aspect of earnings has been at the cost of sacrificing another. Poor corporate governance is still a pressing concern.
From: May 21, 2013
The Mysterious World of Bitcoin: Does It Have Staying Power?
Just what exactly should we make of Bitcoin? The once-obscure digital currency has had quite a ride, with the value of a single Bitcoin soaring from US$13 in January to a peak of US$237 by mid-April before collapsing to US$83 in a day and then recovering to around US$134. The roller-coaster ride has raised many questions. Is Bitcoin a legitimate alternative currency – an online replacement for dollars and euros, as backers claim? Or are we witnessing a giant bubble waiting to burst?
From: May 07, 2013
Global Currency Battles: A Waiting Disaster or a Win for All?
To many, Japan's recent moves to devalue the yen looked like the spark that could ignite a global currency war – a series of competitive devaluations that, last century, helped plunge the world into the Great Depression. Until now, central bankers have been resisting the urge to politicise exchange rates. However, while currency skirmishes can be dangerous and require monitoring, they are also necessary for establishing equilibrium in markets and will help in the global economic recovery, some experts say.
From: March 14, 2013
New Order: Tim Steele on the Future of Financial Planning
The collapse of a number of financial planning firms in recent years has dented consumer confidence in financial advisers, but changes are afoot. The government has tackled conflicts of interest with its Future of Financial Advice reforms and the Australian Securities and Investment Commission has proposed a national exam as an industry qualification. Moves to lift educational requirements for financial planners had already been signalled by the industry. This year, the Australian School of Business (ASB) commenced degree courses in financial planning and has responded to an approach from Tim Steele, director of AMP's Horizons Academy, which trains and licenses that company's financial planners. Under a new agreement, eligible graduates from AMP's Horizons program will be able to gain academic credit towards further study at the ASB. Steele recently spoke with Knowledge@Australian School of Business.
From: March 04, 2013
Kilkenomics: A Festival Where the 'Dismal Science' Meets Comedy
British historian Thomas Carlyle in 1849 described economics as the "dismal science". Most economists have helped maintain that reputation over the past century by being a generally humourless bunch. For the past three years, though, an unusual event in Ireland has been trying in its own way to prove Carlyle wrong. Kilkenomics is an economics festival – and if that term sounds like the mother of all oxymorons, consider this: Kilkenomics puts economists, businessmen and finance executives on a stage together with stand-up comedians, where they engage one another in intense and highly irreverent debates.
From: February 27, 2013
A Bold New Direction for Japan's Economy
Newly elected Prime Minister Shinzo Abe wants to take Japan's economy in a daring new direction to pull it out of two decades of stagnation and deflation. It turns out that his policies closely resemble past efforts – but he wants to put far more firepower behind them this time. He aims to relax already very loose monetary policies and sharply raise government spending to boost demand. Some analysts say it's just the medicine Japan needs and, on the spending side at least, the opposite of what Europe and the U.S. are doing. But Wharton finance professor Franklin Allen, in an interview with Knowledge@Wharton, says the plan carries serious risks and could even lead to a big meltdown. And while the new policies may help in the short run, they will not combat the serious structural problems that have sapped Japan's competitiveness.
From: February 13, 2013
Maneet Ahuja on Hedge Funds and the 'Alpha Masters'
Maneet Ahuja began her career at age 17 as a credit risk analyst at Citigroup. Now, 10 years later, she has been named to the Forbes2012 "30 under 30" list, works as a producer for CNBC's Squawk Box and has written a new book called, The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds. She earned a scholarship from the South Asian Journalists Association to attend Wharton's Seminar for Business Journalists, where Knowledge@Wharton recently had an opportunity to talk with her about the Alpha Masters she profiled in her book and where the hedge fund industry is headed.
An edited transcript of the conversation follows.
From: December 17, 2012
'Bull by the Horns': Sheila Bair's Insider View of the 2008 Financial Crisis
The 2008 financial crisis caused a recession in the United States, forced the government to bail out several banks and investment firms to the tune of $125 billion and led to 1.9 million housing foreclosures in 2008 and 2009 due to lax and often predatory subprime mortgages. One of the few industries that may have benefited from this debacle was publishing, given that the economic collapse produced a number of books dissecting what went wrong. Sheila Bair, director of the Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, has added to that collection. In Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself, Bair gives an insider's view of what caused the crisis and what can be done to prevent similar meltdowns in the future.
From: December 17, 2012
