The Invention of Air Conditioning :: essays research papers

Willis Haviland Carrier invented the first air conditioner in 1902. This was designed to boost the working process control in a printing plant. Carrier’s invention controlled temperature and humidity. The low heat and humidity helped keep the paper dimensions and ink alignment the same. Later his invention was used to populate productivity in the workplace. The Carrier Air Conditioning Company of America developed for the increasing demands. Gradually, air conditioning was used to help increase comfort in homes and cars. Residential sales increased rapidly in the 1950's. Carrier lived from 1876-1950. He graduated with a Masters in Engineering from Cornell University. One of Carrier’s first patents was awarded to him in 1906,â€Å"The Apparatus for Treating Air†. The American Society of Mechanical Engineers was given Willis Carrier’s formula for the Rational Psychrometric Formulae. The Carrier Engineering Corporation was formed in 1915. The factors for exponential growth for air-conditioning are the HVAC Market, energy, environment, communication, societal, political, preparing for the future, looking ahead, and the conclusion. Buildings of the U.S. use approximately 35% of the nation’s precise total of energy consumption. The worth of shipments by U.S. HVAC manufacturers was over $28 billion of 1996. Since there are 52,000 CHC chillers needed to be replaced among the U.S., there’s a large opportunity for new chillers, new technology for the HVAC industry. The ozone depletion is an international issue in which is currently being resolved. The 3rd world countries are still allowed to manufacture CFC’s. Illegal imports of CFC’S to the U.S. is a consistent concern. Many illegal imports are virgin CFC’s. Those whom have a political overtones are specifically the ones whom create a protectionism of local commerce, having a negative impact on those inside and out of the country.

Douglasian Cultural Model in Indian Context Essay

Introduction Today’s world is being dominated by daily innovations in technology and increasing globalization which helps organizations to spread and to operate globally in a successful way. Every organisation operating at a global level is trying to improve their financial profits. The success of such organizations greatly depends on their workforce and their decision-making capabilities. Many times the ethicality of such decisions have been questioned because of the profit driven strategies of these organizations. As Nobel Prize winner economist Milton Friedman quotes, â€Å"An executive’s responsibility generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom.† The decision-making process and hence ethicality of the decisions in such organisations is greatly influenced by the culture of the workforce. Bartels (1967) was one of the first to note the importance of the role of culture in ethical decision-making. There are different studies which discuss the diversity of ethical decision-making based on different perspective for example, Vitell, Nwachukwu and Barnes, 1993 discuss the effect of culture on ethical decision-making with the help of Hofsted’s typology while Patel and Schaefer, 2009 discuss the same with the help of Douglasian Cultural Theory (CT) perspective in the Indian context. Summary Patel and Schaefer’s article discusses the impact of culture on ethical decision-making from a Douglasian Cultural Theory (CT) perspective. It explains the dynamic ethical behaviour of the individual with four solidarities of CT. The Article also discusses the business ethics in the Indian context. Authors argue that applying static conception of culture to the process of ethical decision-making in business results in several problems. The Authors propose CT as an alternative model to these static conceptions to avoid these problems. The Article says that every social system is ethically plural because of the presence of all four solidarities together. An Individual from different solidarities may have a different perception of an issue’s moral intensity which may lead to different levels of moral awareness and hence to different moral judgements. The Article explores the dynamicity and diversity of ethical decision-making in business using the CT framework within the I ndian context with examples of Amul, SEWA, Tata Steel, ONGC and Reliance. Strengths This article offers an alternative approach of CT stating the impact of culture on ethical decision-making process in business. Authors argue that applying the static conception of culture to the business ethics results in different problems like national stereotyping, focus on only national cultural aspect ignoring the other aspects and broad generalisation of culture at national level. This article strongly supports the scholars who challenge the essentialist culture approach like Hofstedian framework. Singh (1990) and Bosland (1985a) have shown that it is possible to have different scores on the four Hofstedian dimensions within the same country. Hence there is possibility of difference in ethical behaviour within the same country. The Authors also talk about the same ethical dynamicity in behaviour. The article powerfully illustrates the diversity in business ethics within Indian context using CT model. The Article talks about the different cultural patterns existing in same corporation at same time. This article supports the argument by Sathe (1985) which says that although, the term â€Å"corporate culture† is used as if organisations have a monolithic culture, most companies have more than one set of beliefs influencing the behaviour of employees. The Article also supports the Thompson’s (1997 a-c) theory who argues that same individual could be a member of different solidarities in different contexts which explains the different ethical behaviour of an individual at a different social context. Also the article studies the ethical practices of different types of companies and business entities to understand the business ethics beyond large private corporations with respect to all the four solidarities of CT. The article debates about the dynamicity of ethical decision-making by citing the examples of all the solidarities existing in different Indian corporations. Also it talks over about the historical and philosophical background for the adoption of different ethical strategies by different corporations. Weaknesses The article explains the process of ethical decision-making in business from a ‘Douglasian Cultural Theory’ perspective only. The article does not identify many other factors beyond culture that may account for differences in work behaviour across nations. Scholars like Parboteeah and Cullen (2003) have suggested the need to include noncultural factors to isolate the influence of culture on ethical behaviour. Also many scholars have talked about the other personal characteristics like education, age, gender and religion that affect the ethical decision-making but they have not put any light on this part in the article. According to Kracher, Chatterjee and Lundquist, education plays an important and positive role in one’s ethical decision-making. Also Singhapakdi et al.: JBE (1996) talk about the relationship between ethical sensitivity and age being significantly positive. Ameen, et al., (1996) suggests that ethical judgments vary according to gender, where females have historically been more ethical compared to males. According to Singhapakdi et al :JBE (2000), there is a positive relationship between religion and perception of an ethical problem. The article has not mentioned all these perspectives while considering the process of ethical decision-making. Patel and Schaefer explained the ethical behaviour in Indian business context with the help of CT and argue that as CT is not limited in its scope of application, what is true for one country should also be true for other countries. This contradicts the findings of the researchers like Tsui which states â€Å"The major contexts that may separate one nation from another include the physical, historical, political, economic, social, and cultural.† This may cause an individual from another country to behave differently in the same context compare to individual in India. My standpoint The research article applies CT model to explain the ethical decision-making process in business within Indian context which allows us to look beyond static and limited conception of national culture. The authors have explained the ethical behaviours using examples of different Indian business entities. Since India is one of the largest growing economies, this research paper will be useful in providing the insights of the ethical practices in India. In my opinion, the authors have raised valid questions about the studies that link static conceptions of the culture to the business ethics. The authors have successfully associated dynamicity in ethical behaviours with the different cultural patterns as per CT which proves the existence of all the four solidarities in every social system. Paper also gives us insights about how all the solidarities co-exist and try to dominate each other. The Authors explain it in an Indian context citing examples for each solidarity. Moreover, authors have highlighted the important fact that managers operating under different cultural patterns may perceive and attend to information about moral issues differently which results in different ethical behaviours. The article considered the very important factors of history and politics that may have influenced while discussing dynamicity of ethical behaviours within Indian context. I am of the opinion that the Douglasian cultural theory is not sufficient to judge the ethical behaviour in business. There are many other factors like education, age, gender and religion which hold a significant role in the decision-making process. The authors have failed to consider these factors. I believe the consideration of the above mentioned factors would have made this research work more reliable. Also I disagree with the authors’ argument of what is true for India should also be true for other countries since every country has a different political, economical, cultural and physical background. Conclusion Taran Patel and Anja Schaefer have criticized the static and limited conception of culture to ethical decision-making in business. They have provided the alternative approach of Douglasian cultural theory to explain the dynamicity and diversity in ethical behaviours with the help of examples from business entities in India. The Authors advocate that the managers should be sensitive to the beliefs of all the four solidarities to be more effective. The Authors also agree that more empirical and theoretical work is needed to strengthen the relationship between the cultural patterns and business ethics. References Bartels, R.: 1967, ‘A Model for Ethics in Marketing’, Journal of Marketing, Vol. 31, No. 1 (Jan., 1967), pp. 20-26 Vitell S, Nwachukwu S and Barnes J. : 1993, ‘The Effects of Culture on Ethical Decision-Making: An Application of Hofstede’s Typology’, Journal of Business Ethics,Vol. 12, No. 10 (Oct., 1993), pp. 753-760 Hofstede, G. 1980. (Revised in 1984). Culture’s Consequences – International Differences in Work-related Values. Sage Publications. Singh, J. 1990. Managing Culture and Work-related Values in India. Organization Studies, 11(1): 75-101 Bosland, N. 1985a.An evaluation of Replication Studies using the Values Survey Module.Institute for Research on Intercultural Cooperation, Rijks-universiteit Limburg Working Paper 85-2, Maastricht Sathe, V. (1985), Culture and Related Corporate Realities, Irwin, Homewood, IL. Thompson, M.: 1997a, ‘Rewriting the Precepts of PolicyAnalysis’, in M. Thompson and R. J. Ellis (eds.),Culture Matters: Essays in Honour of Aaron Wildavsky(Westview Press, Boulder, CO). Thompson, M.: 1997b, ‘Cultural Theory and TechnologyAssessment’, in F. Fischer and M. Hajer (eds.),Living with Nature: Environmental Discourse and Cultural Politics (Oxford University Press, Oxford). Thompson, M.: 1997c, ‘Cultural Theory and IntegratedAssessment’,Environmental Modelling and Assessment 2,139–150. Kracher, B., A. Chatterjee and A. R. Lundquist: 2002, ‘Factors Related to the Cognitive Moral Development of Business Students and Business Professionals in India and the United States: Nationality, Education, Sex and Gender’, Journal of Business Ethics 35(4), 255–268 Parboteeah, K. P., & Cullen, J. B. 2003. Social institutions and work centrality: Explorations beyond national culture. Organization Science, 14(2): 137-148. Patel, T.: 2005, Using Dynamic Cultural Theories to explain the Viability of International Strategic Alliances: A Focus on Indo-French Alliances. PhD Thesis, Open University. Milton Keynes, UK. Singhapakdi, A., S. J. Vitell and K. L Kraft: 1996, ‘Moral Intensity and Ethical Decision-Making of Marketing Professionals’, Journal of Business Research 36, 245–255. Ameen, E., Guffey, D. and J. McMillan. 1996. Gender Differences in Determining the Ethical Sensitivity of Future Accounting Professionals. Journal of Business Ethics 15: 591-597. Singhapakdi, Anusorn, Janet K. Marta, Kumar C. Rallapalli, and C.P. Rao (2000), â€Å"Toward an Understanding of Religiousness and Marketing Ethics: An Empirical Study,† Journal of Business Ethics, Vol. 27, No. 4, 305-319.

The Spanish Civil War - Free Essay Example

Sample details Pages: 6 Words: 1838 Downloads: 2 Date added: 2019/05/18 Category History Essay Level High school Tags: Civil War Essay War Essay Did you like this example? Tratando De Cambiar El Mundo: The Theater of the Spanish Civil War The Spanish Civil War is burned into Spains collective memory perhaps their greatest scar, and it has created a permanent effect on their languages, art, literature, and theater. The theater in Spain at the time was used as a vehicle for change, and the contemporary theater that depicts it shows that just as it was used for change then, it is used to encourage change and healing today. In the 1930s, Spain was a country in turmoil. Unrest between the divided elite and working classes and the devastation that the Great Depression wreaked on Spains existing economic problems meant that the people were desperate for change. In 1936, Spains socialist party won a narrow victory against the nationalist party, and they immediately put their plans for reform into effect. They sought to secularize the government, create labor unions, and enact other reforms that threatened the wealthy elite that had been in power for so long. The widespread violence that resulted from the nationalists attempt to seize power back from the republicans is now known as the Spanish Civil War. Don’t waste time! Our writers will create an original "The Spanish Civil War" essay for you Create order Much of the war was fought not with weapons, but with propaganda. Both the republicans, also known as the Popular Front, and the nationalists used education and the arts in their cultural crusades in order to justify their respective ideologies. A key weapon in this fight to win over the populace was theater. Seeing its importance and efficacy in conveying messages to the people, both sides went as far as to establish official organizations to create and circulate their brand of cultural instruction (Parker 215). On the left, the Alianza de Intelectuales Antifacistas (alliance of antifascist intellectuals) created several groups: Nueva Escena, Teatro de Arte, y Propaganda, and Guerrillas Teatrales. On the right, the nationalists had the Junta Nacional de Teatros y Conciertos (national committee of theatres and concerts). Both sides wrote essays explaining the roles of the theater in their respective ideologies, and while the right thought restoring Spanish theater to the days of autos sacramentales and mystery plays would best serve their mission, the left wanted to purge the bourgeois plays thathad dominated Spanish stages, and instead return the stage to the masses with avant garde political plays (Parker 215). Reaching into the theatrical roots of Spain has propagandistic power, and both the left and right sought to claim cultural images to prove their dominance as the true essence of Spain (Parker 216). Nationalist playwright Gimenez Caballero likened the goals of theatre to a bullfight:a series of symbols that inherently lead the spectator to the absolute truth of the divine (Parker 219). Incredibly, the companies of both sides performed several of the same Golden Age plays in order to convey their discordant messages. Lope de Vegas Fuenteovejuna and Calderons La Vida es Sueo, were performed by both the republicans and nationalists during the Spanish Civil War. Both plays were deemed to be accessible constants in Spanish culture that could be bent to serve their respective ideological agendas. Lope de Vega became an especially strong symbol for the cultural legitimacy of the nationalist party. Strangely enough, however, both sides also found use in the old religious autos sacramentales a nd performed them often. The right used them to combine their ideologies with the universal truth of Catholicism in an attempt to make the two inextricable in the minds of the audience, while the left favored them for their didactic potential (Parker). However, the republicans were still able to extort the religious imagery that did not fit in with their ideology. Delgado writes, the deity becomes, rather than the Christian God, an amalgam of various totemic conepts which teatro de urgencia represents in solemn, semi-mystical terms: People, Land, Spain, the Workers Republic, and, as might be expected in a country which practices Mariolatry, Mother. The military training of the republicans largely relied on improvised propagandist plays. The propagandist theater they used to teach and rally support for their cause was called teatro de urgencia (theater of urgency), and the fervor that went behind its creation is evident in the name. Teatro de urgencia was performed on the front lines and nearby towns, and was created with three goals in mind: to instill confidence in the people of the republic, to reinvigorate the faith of the soldiers, and to teach recruits appropriate behavior. In every play of teatro de urgencia, the audience is meant to relate to the central character of each: the soldier, or milicano (Delgado 51). Delgado writes, In his doubts and fea rs, strength and hope, a collective Everyman figure emerges from the corpus of the texts, and, just as his medieval counterpart [in autos sacramentales] undertook a journey towards the heaven of unification with God, so too can the miliciano be seen in teatro de urgencia at various stages of a journey toward an afterlife which is victory (51). The journey Delgado refers to is framed by the republican ideology, and is meant to symbolize the devotion to their cause that they want the audience to strive for. The tactic was specific, pointed, and effective. One example is Max Aubs Pedro Lopez Garcia. In the play, the titular character is convinced that he can remain neutral in the war, and that it wont affect his life. This changes when he is forcibly enlisted in the nationalist army. In the trenches, he is visited by Death, who shows him visions of a nationalist soldier killing his mother and their animals, and destroying their land. He is too frightened to desert, but when La Tierra appears to him with his mother in its skirts, he gathers the courage to return to your brothers trench (McCarthy 55). Pedro Lopez Garcia both demonizes the enemy and glorifies the journey back to the side of the republic. McCarthy writes, for the republican propagandists, therefore, it is as if, having won Pedro Lopez Garcia from the loyalist trenches, their subsequent mission is to translate his faith into deeds, when, reappearing as milicanos in subsequent teatro de urgencia, he continues on a journey in which spiritual conviction is emphasized more than spiritual comfort (55). Pedro Lopez Garcia, and many other plays of teatro de urgencia resemble a sheep being herded back to God, and the symbolism is no coincidence. Religious symbolism and references are abundant in teatro de urgencia in order to convince the audience that the path of the republicans is a righteous one. Despite the years since its end, the scars of the Spanish Civil War are still felt in Spain today. Carlota Leret, whose father was executed during the conflict, says, This is not a historical event that is buried in the past, but something that is very fresh in the memory of Spaniards (New York Times). The truth in this is evident. Playwrights still write about the impact of the Spanish Civil War on their people, and on the world, . One example is Ay Carmela! written by Joso Sanchis Sinisterra in 1986 to mark the fiftieth anniversary of the war. The set is sparse, and the play takes place in an unspecified region of Spain. This ambiguity is intended to help let all memories of the war come forth to exist and be addressed in the space. The play follows performers Carmela (who is dead in the beginning of the play) and Paulino who accidentally cross from republican territory into nationalist territory. They are apprehended and are forced to perform for the nationalist forces despite witnessing an execution and other horrors at their hands. Of the play, researcher Helena Buffery writes, Radically open in structure, through its mimicry of the cyclic, repetitive patterns of trauma and melancholia, the play closes with a short epilogue in which the culture of forgetting accepted by Paulino in order to survive under Francoism is set against the culture of remembering the past, championed by Carmela, in a world of the dead which, though increasingly distant from the world of the living, seems to become the only place where resistance is possible (865). The cyclical pattern of Ay Carmela! echoes the futility and trauma of the Spanish Civil War and how the fallout has lasted, even though the first shots of the conflict had been fired fifty years prior. In more recent history, Laila Rip olls plays have shed light on the effects of the war on those that were not directly involved. In her 2005 play, Los Nigos Perdidos, Laila Ripoll exposes the atrocities and abuses that the children of Republican families underwent in religious orphanages and social assistance hostels after the end of the war. The protagonist is Tuso, a grown man with special needs, who remembers his childhood after experiencing a hallucination. He then relives these memories as a child in a religious orphanage, where one child was thrown from a window by a nun, and others were starved or beaten to death. Raquel Garcia-Pascual writes, These events are remembered by means of ghostly evocations, which in the play communicate their fear faced with the apparition of death symbolically and physically knocking at their door, personified in the figure of the Sister, in several prolepses of the ending (449). The play is shown through the lens of a child, and features puppets, masks, and childrens language. The play also depicts the transport of children on livestock trains without food or water. Those who did not die were repatriated without permission to homes around Europe and South America. A new surname gave these children an identity, but most were silenced and forgotten (Garcia-Pascual). Los Nigos Perdidos finally gives these forgotten children a voice. It lays bare the abuses and confinement they experienced, and leaves them in the audiences memory. At the end of the play, Tuso says, Decidieron no dar parte para no montar un escendalo. Total, ya erais nigos perdidos. Al fin y al cabo, los nigos de aque no existen. Son como fantasmas y nadie va a reclamar por ellos. They decided not to give you a part to avoid a scandal. You are forgotten children. In the end, the children of this place dont exist. They are like ghosts, and no one is going to claim them (Ripoll 310). Ripoll uses th eir story to condemn the history and suffering that is silenced, and to resurrect their memory. The Spanish Civil War was a bloody, turbulent time in Spains history, and the repercussion still echo throughout the country. It is written into the memory of its people through art, literature, and especially theater. The propagandistic theater of the Spanish Civil War was used as a vehicle for political change in the 1930s, but the contemporary theater that sheds light on the war and its devastating effects on its people is used to enlighten audiences today, and help them work through the past. Works Cited https://www.researchgate.net/publication/324398874_Francoist_repression_and_moral_reparation_in_the_theatre_of_Laila_Ripoll Anderson, Tim. Chapter One: Prelude to War. Spanish Civil War, Great Neck Publishing, 2009, p. 1. https://www.nytimes.com/2007/11/23/world/europe/23wargames.html

Information functions - Free Essay Example

Sample details Pages: 21 Words: 6222 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Essay any type Did you like this example? 1. Introduction Information functions as the core of capital market in the sense that all sides of market participants make decisions based on their accessible information sets. As one of the major sources of information in public equity market, company financial reporting lies in the center of company performance relevant information set and is the basis of most investors analysis and decision-making process. Don’t waste time! Our writers will create an original "Information functions" essay for you Create order ‘Fundamental analysis is how people usually refer to for this kind financial performance information analysis, and it is critical especially to long-term value stock investors who have much heavier reliance on analyzing ‘fundamentals among other factors than short-term investors to implement investment strategy. At the same time, multiples including price to earnings (P/E) or price to book (P/BV) are two most commonly used metrics now in assisting the ‘fundamental based investment decision-making. Studies on the value relevance of company financial indicators or multiples become potentially interesting from a value investor perspective. There had been some studies along the above-mentioned directions and especially together with the fact of segmented Chinese stock markets, in an effort to derive implications on asset pricing or potential trading strategies by looking at price or return premium for dual-listed companies as well as value relevance with accountin g information for Chinese listed company. Key research from these various angles, which will be reviewed in more detail in later section, gave some insightful findings although empirical findings may not always be consistent due to different research design or samples difference. There is still considerable space for further research to contribute. By taking up one specific angle, this paper aims to provide more recent evidence on Chinese dual-listing return association with the two multiples (P/E and P/BV, the inverses are used in the model) in the condition of segmented Chinese share market. Most prior studies were conducted based on AB dual-listing samples, and not so much recent similar studies were done on AH dual-listed share samples. This paper therefore looked at Chinese dual-listed companies on A and H share market to supplement this less researched area. Another reason why a AH dual-listing study can be more practically interesting than that on AB dual-listings is due to t he fact that B share market was far less liquid as H share market thus less meaningful for most investors. The paper is organized as follows. Section 2 discusses the background of this study, including introductions of Chinese stock market especially A and H share markets, followed by a sub-section introducing Chinese accounting and auditing system. Section 3 reviews prior research on stock value relevance of company financial information given market segmentation as well as return predictability based on price multiples. Hypotheses and assumptions of this paper are derived accordingly Section 4, elaborated with Section 5 and 6 on data and research methodology respectively. The last section reports the empirical results and provides explanations for the results. References for this research are listed in the appendix. 2. Background 2.1 China A and H stock market Chinese stock market has been segmented ever since 1991 when the first stock exchange opened in Shanghai, along with its gradual development path was †¦(brief history) Currently there are four major types of shares in Chinese corporations, namely government shares, legal entity shares, employee shares and traded shares which further comprise of A-shares, B-shares, H-shares and N-shares. Differences among these shares mainly lie in the ownership restrictions, as further demonstrated in Table XX. The ownership restrictions therefore create another layer of segmentation on top of the investment barrier the central government set between mainland China stock market as a semi-open market and Hong Kong stock market as an international market. The long term direction of Chinese capital market reform is towards a more integrated and open market, and the Chinese government had carried out a series of important barrier releasing actions including ‘Reform of Non-tradable Shar es in A share market that aims to release the trading restrictions on government shares and legal entity shares. Removal of certain restrictions laid between markets, for example, impoving A and B share market integration by allowing mainland China investors buying B shares directly, had also been good example of Chinese capital market liberalization. However, the not yet integrated market of A and H shares and investment strategy implications of it is the focus of this paper. Table XX. Comparison of main Chinese stock markets Exchange Investor Currency Settlement A share Shanghai Stock Exchange (SSE) Domestic individual investor (mainland China citizens), institutional investors including QFII CNY T+1 Shenzhen Stock Exchange (SZSE) B share Shanghai Stock Exchange (SSE) Foreign and domestic (opened to domestic individuals since Feb 2002) individual or institutional investors USD T+3 Shenzhen Stock Exchange (SZSE) H share Hong Kong Stock Exchange (HKSE) All investors in HKSE, except for China mainland individual investors, who can only indirectly invest through mainland QDII HKD T+0 T+2 HKSE SSE SZSE No. of listed companies Market cap No. of listed companies Market cap No. of listed companies Market cap 1,426 2,751,672 905 2,905,570 1246 1,336,394 (no. of H shares: 163) Note: market cap in USD, all numbers are those as of 31 Mar 2011. B share market became a more integrated market with A share market after the policy change allowing domestic individual investors trading B shares in Feb 2002. H share market used to see a similar policy ease on allowing domestic individual investor buy Hong Kong listed shares (including H shares) directly through a program called ‘Hong Kong Stock Express, however the program was halted after being implemented for a while in the concern of over-release of Chinas capital account. Cautious but progressive efforts were being made after that to further strengthen the integration of Hong Kong and mainland China capital markets, but so far Chinese mainland investors can only directly invest in H shares through certain institutional investors authorized as qualified domestic institutional investors (QDII). Mainland Chinese companies have significant presence in Hong Kong stock market. As of March 2011, there are 163 H shares (companies incorporated in mainland China and listed in Hong Kong), 103 red chip stocks (companies incorporated outside China and listed in Hong Kong), and 334 Non-H share mainland private enterprises, totaling 57.2% of market capitalization and 65% equity turnover in Hong Kong stock exchange. 66 of the 163 H shares have dual-listing in mainlands two A share markets, called A-H companies. These A-H companies are the basis of the empirical study sample of this paper. Table XX Mainland Enterprises (Main Board and GEM) No. of H shares 163 No. of Red chips Stocks 103 No. of NHMPE 334 Market capitalisation (% of market total) 57.20% Turnover value (% of equity turnover) 65.00% Note: 1) NHMPE = Non-H Share Mainland Private Enterprises. 2) March 2011, Month-end figures 2.2 China accounting and auditing practices for A and H shares Companies that issue A- and H-shares follow different financial reporting systems, under which share companies prepare reports under PRC GAAP (ABSE) that are audited by local CPA firms, while H share companies prepare reports under and the International Financial Reporting Standards (IFRS) (IFRS) or Hong Kong GAAP that are audited by international auditors (Big 4). AH dual-listing companies have to file financial reports under both systems until December 2010, when, Hong Kong Stock Exchange announced accepting H share companies reporting under Chinese GAAP as a way of reducing company compliance costs. Differences between Hong Kong GAAP and IFRS is minimal since 2005 except for a few minor differences (Deloitte 2005), when great efforts were made to integrate Hong Kong GAAP and IFRS. Differences between PRC GAAP and IFRS are bigger than that of Hong Kong GAAP and IFRS, therefore in many cases, key company financials such as earnings or net assets appear differently in the same f inancial reports. This, together with segmented A and H share markets provide a practical need for research conducted in this paper. The latest approved one system reporting/auditing regulation by HKSE removed the policy barrier financial reporting gap now existing among AH companies, and it is expected that in the long run more AH companies will only adopt PRC GAAP to cut their compliance costs. However in the short term this policy will not change current practice of the majority AH companies mainly due to their concern on whether international investors can adapt well to the PRC GAAP reporting instead of IFRS reporting. As of 18 April 2011, only about 10% of the small and medium-sized AH companies shifted towards PRC GAAP reporting only (Sina.com.hk news), big companies took a wait-and-see strategy and mostly had concern on investors negatively interpret them shifting to one accounting system only immediately. Table XX. Comparison of accounting and auditing practise in Chinese stock markets Share Accounting standard Auditors A-shares PRC GAAP ocal auditing firms B-shares IFRS International auditing firms H-shares IFRS/HK GAAP International auditing firms AB-shares PRC GAAP IFRS dual reporting ocal CPA international auditing firms AH-shares PRC GAAP IFRS/HK GAAP dual reporting ocal CPA international auditing firms 3. Previous research 3.1 Chinese stock market segmentation and A-H share premium disparity There had been considerable amount of literature on how market segmentation affected share price premium for multi-listings. Empirical studies on this issue usually found out that countries where ownership restrictions of stocks exist, the foreign shares is trading at a price premium over the domestic counterpart shares. Countries of such example include Finland (Hietala, 1989), Thailand (Bailey and Jagtiani, 1994), Switzerland (Stulz and Wasserfallen, 1995), and Mexico (Domowitz et al., 1997). However the case for China is reversed in the way that Chinese foreign shares had been trading at price discount over domestic counterpart shares (Bailey, 1994; Su, 1997; and Fernald and Rogers, 1998). Reasons for Chinese foreign share price discounts were researched also, including four major hypotheses: Differential risk hypothesis, which assumes that foreign investors require lower risk premium than domestic investors on an unrestricted stock (Hietala 1989); Differential demand hypothesis , which assumes different stock demand elasticity facing different investor groups; liquidity hypothesis which is based on stocks traded with varied liquidity leve, and information asymmetry hypothesis addressing premium caused by information gap. Most literature research that test these hypotheses were based on empirical studies on A and B share market rather than A and H share markets but a few recent studies had provided more evidence on A and H share comparative studies which also laid out foundations for this paper. On what makes A and H share markets segmented, Wang and Jiang (2004) and Li et al. (2006) argue that stock ownership as well as listing and trading locations manifests the kind of segmentation between the A- and H-share markets. Hing-Wah Lee (2009) reinvestigated the liquidity hypothesis following a market-microstructure approach, and found out that first, China A-shares on average provide better market liquidity than their Hong Kong H-share counterparts do. S econd, after controlling for traditional liquidity measures and variables related to competing hypotheses, the percentage differences in quoted spread and depth between A-shares and H-shares still explain significantly the price premium. 3.2 Value relevance of company financials The effect of different accounting systems along with Chinas segmented share market had been researched in the past decade. And most of the research made efforts to address the issue of value relevance of accounting information in China as one of the emerging markets. There were mainly two types of models that were used, price model and return model (Ball and Brown, 1968; Collins and Kothari, 1989; Kothari and Zimmerman, 1995; Kothari, 2001) that used share price or return as dependant variables on a series of independent financial variables such as earnings and book value of equity. Evidence was found to support A share value relevance of earnings reported under PRC GAAP from studies including Haw et al. (1999) on their price model built on entire population A-share during 1994 and 1997, and Chen et al. (2001) with both price and return model built on a sample of A share companies during 1990 and 1997, who also found that the Chinese stock market perceives accounting information t o be more value-relevant for ?rms issuing both A- and B-shares than ?rms issuing only A-shares. Further researches that examine A, B share markets at the same time and found that along with A-share accounting information, the estimated B-share prices from the IAS model are signi?cantly related to the actual B-share prices, indicating that the IAS model has additional explanatory power over that contributed by PRC GAAP model (Bao and Chow, 1999). Hu (2002) used sample companies only listed on Shanghai Stock Exchange to replicate Hu (2002)s methodology but found opposite evidence that book value and earnings reported under PRC GAAP are more relevant than those based on IFRS. Samia and Zhou (2004) studied on AB dual-listed companies from 1994-2000 and obtained evidence that the accounting information in the B-share market is more value-relevant. Liu and Liu (2007) provided multi-faceted insights on the value relevance issue in the Chinese stock market with more comprehensive analysis o n data from 1999 to 2003. They found that accounting information issued by B-share and H-share companies that is prepared and audited under IFRS/H.K. GAAP is more value relevant than that prepared under PRC GAAP of the A-share ?rms. In addition, by further examining the A-share market, they ?nd that during the bearish market situation (since 2001), the incremental explanatory power of accounting information for equity book value increases, whereas it decreases for earnings. Within the A-share market, no signi?cant difference of the value relevance of accounting information can be found among only-A-share, AB- and AH-share subgroups. 3.3 Return explanation based on price multiples The earliest and most well-known model to explain stock return difference was the Capital Asset Pricing Model (CAPM) built on the Markowitz paradigm, by assuming that expected return of any risky assets linearly depend on its co-movement with the market portfolio. However after the development of CAPM model in 1960s, there were some cross-sectional studies on stock returns showing contradicting results against what CAPM model predicted, supported by large sample tests with the help of a few well-developed databases such as Compustat. Additional factors were found to explain stock return differences such as earnings/price, firm size, long-term return reversals, book-to-market equity, leverage and momentum. Another model developed by Fama and French (1992) synthesized empirical findings of some of these factors (size, leverage, book-to-market equity and beta) in a single one, although the model and the findings received some criticisms later on such as that the empirical finding was a result of data-mining (Black 1993a, 1993b), and/or there was survivorship bias in the sample used as well as beta mis-measurement (Kothari, Shanken and Sloan, 1995). Despite these controversies, more and more research seem to support the effect of other factors initiated in Fama and French (1992) model and the research focus shifted to explain why there are other factors explaining stock return. The Fama and French (1993) three-factor model found results supporting two additional factors besides access return specified in CAPM model, namely SMB based on investment strategies of long in small-cap stocks and short in large-cap stocks, and HML based on long in high book-to-market equity stock (value stocks) and short in low book-to-market stocks (growth stocks). And the three-factor regression reported significant coefficients on all three factors and improved R-square than a CAPM model. Research on finding the new factors to be priced by the market had not ceased since then and ne w models were tested against different markets outside the US. 4. Hypothesis Assumptions The author believes that given the capital market control and segmentation in China, the existing significant price or return disparity among segmented stock markets indicate potential arbitrage opportunities although other factors like investment barrier and transaction costs etc need to be taken into account when it comes to practical strategies. A wide range of literature had studied on finding out explanations for the disparity; however these are not the focus of this paper. Specifically, the paper tries to take the return disparity as given and examine how financial information (valuation multiples P/E and P/B) of AH dual-listed companies can be used for interpreting A and H share returns separately and jointed as AH return premium/discount. Although AH dual-listed companies had financial statement reports under both PRC GAAP and IFRS therefore information under both systems are accessible to all investors, it is assumed that international investors mainly use company finan cial reports under IFRS and domestic investors use that under PRC GAAP for the purpose of convenience and comparability with international and other A-listing domestic peers. Concerns of most AH companies on shifting to a single-system reporting stopped them to do so indirectly reflected that reporting under IFRS or HKGAAP is heavily relied on by international investors on H share markets. While in A-share markets, domestic investors heavily rely on PRC GAAP reporting. This situation is not likely to change swiftly and the convergence of all accounting stands sees only in the longer term. This paper takes the assumption of Chinese stock market being a weak-form-efficient market (Sun, Zhang, Zhou, 1997; Chen, Chen, Su, 2001). And it further assumes that information such as financial reporting is useful for investment decisions and is taken advantage of to predict future stock return (Francis Schipper, 1999). Therefore the key hypothesis of this research is that financial inform ation of A-H dual-listed companies can be taken advantage of to predict return in each market, and that arbitrage opportunities emerged from AH return premium/discount exist partially for the reason of financial reporting disparity within the same dual-listed company who faces different groups of investors on each market it lists in. 5. Data Sample selection 66 AH dual-listed companies are the focus of this research, therefore are set as the initial sample. Semi-annual stock return and company financial EPS and BPS (every 6-months) are collected for period 2002 first half (2002 S1) to 2010 first half (2010 S1). However some additional criteria are added on top of these sample companies to get the final sample data, for technical purposes. These criteria include: Financial sector companies (banks and insurance companies) are excluded due to that certain financial attributes may distort financial information of total sample where non-financial companies are majority. Same length of data points over time and entities are needed for a highly balanced panel dataset and a consistent comparison, however not all 66 companies are included in the sample due to that the AH companies have different listing time in A share and Hong Kong share market. Therefore AH companies that have long periods data missing on any of the variables are excluded. Filtering on these two criteria left a sample of 26 AH companies with A and H share prices (returns) respectively over a semi-annum period, 6-month earnings per share (EPS) and book value of equity per share (BPS) over the period of June 2002 to June 2010. The financials disclosed under PRC GAAP and IFRS were collected for A shares and H shares respectively. Variables are further outlined as below in Table X-X: Table X-X. Summary of variables 2002 S1 2002 S2 A/H share price/return Price: A/H share price as of 30 June 2002 Return: A/H share 6-month simple return over the period of 31 Dec 2001 to 30 June 2002 Price: A/H share price as of 31 Dec 2002 Return: A/H share 6-month simple return over the period of 30 June 2002 to 31 Dec 2002 A/H share EPS A share EPS: Earnings per share (January to June) of the company under PRC GAAP H share EPS:Earnings per share (January to June) of the company under IFRS or HKGAAP A share EPS: Earnings per share (June to December) of the company under PRC GAAP H share EPS: Earnings per share (June to December)of the company under IFRS or HKGAAP A/H share BPS A share BPS: Book value of equity per share (January to June) of the company under PRC GAAP H share BPS: Book value of equity per share (January to June) of the company under IFRS or HKGAAP A share BPS: Book value of equity per share (June to December) of the company under PRC GAAP H share BPS: Book value of equity per share (June to December)of the company under IFRS or HKGAAP In addition, the whole sample is divided into two periods, before and after the global financial crisis (start time taken as June 2008). Post-crisis sample is taken out and only pre-crisis sample is used for a comparative study with the full sample to see whether and how much the empirical results are influenced by the crisis. Descriptive statistics of all variables used are summarized in Table XX Table XX. Statistical summary of variables A share Full period Variable Obs Mean Std. Dev. Min Max areturn 442 0.107 0.478 -0.692 2.922 aep 439 0.013 0.091 -1.531 0.202 abp 436 0.458 0.305 -0.652 1.739 Pre-crisis period Variable Obs Mean Std. Dev. Min Max areturn 338 0.104 0.470 -0.692 2.922 aep 335 0.016 0.092 -1.531 0.202 abp 332 0.474 0.296 -0.526 1.476 H share Full period Variable Obs Mean Std. Dev. Min Max hreturn 442 0.168 0.500 -0.677 2.557 hep 442 0.014 0.244 -3.552 0.348 hbp 442 1.053 0.901 -2.612 6.588 Pre-crisis period Variable Obs Mean Std. Dev. Min Max hreturn 338 0.172 0.493 -0.677 2.557 hep 338 0.026 0.212 -3.552 0.348 hbp 338 1.109 0.871 -1.196 5.071 A simple correlation summary among all variables used is given in Table XX, for both pre-crisis and full period sample. Table XX. Variable correlation table A and H variable correlation table Full period (obs=433) areturn hreturn hep hbp aep abp areturn 1 hreturn 0.739 1 hep 0.051 0.082 1 hbp -0.283 -0.229 0.171 1 aep 0.041 0.079 0.935 0.133 1 abp -0.294 -0.178 0.245 0.626 0.296 1 Pre-crisis period (obs=329) areturn hreturn hep hbp aep abp areturn 1 hreturn 0.705 1 hep 0.025 0.050 1 hbp -0.337 -0.243 0.133 1 aep 0.032 0.069 0.952 0.098 1 abp -0.286 -0.115 0.222 0.580 0.287 1 6. Methodology The general fundamental model developed is a series of regressions with stocks returns (next period 6-month return or current period 6-month return) being dependant variable and explained by the inverses of commonly used valuation multiples P/E and P/BV, i.e. E/P and BV/P. Three different models are constructed by taking both time and cross-sectional dimensions into account, to explore relationships between current period return and current price multiples (inversed), future period return and current price multiples (inversed) as well as return premium and price multiples (inverse) gaps. Panel data analysis is applied to each model, elaborated in details as below. 6.1 Choice of panel data model According to Cheng Hsiao (2006), â€Å"panel data have several advantages over cross-sectional or time-series data by blending the inter-individual differences and intra-individual dynamics. The advantages include more accurate inference of model parameters (Hsiao, Mountain and Ho-Illman, 1995), greater capacity for capturing complexities, and simplifying computation and statistical inference in certain cases.† There are two major types of panel data regressions, fixed-effects (FE) model and random-effects (RE) model, depending on whether ‘unobserved heterogeneity in the panel sample is assumed as random variables or fixed parameters. FE and RE specification has its own advantages and limitations, for instance FE specification can allow individual and/or time specific effects to be correlated with explanatory variables but does not allow estimation of time-invariant coefficients while RE specification allow estimation of time-invariant variables impact by imposing a â €˜conditional density assumption (Hsiao, 2006). The choice of FE or RE model in this paper is made with the help of a statistic developed by Hausman (1978) and can be tested under chi-square distribution assumption. Null hypothesis under the Hausman test is that difference in coefficients under FE and RE specification are not systematic, and rejection of the null needs the constructed statistic which follows chi-square distribution is significantly different from zero. STATA command ‘hausman is used to implement the Hausman test on the sample panel regressions to decide whether FE or RE model should be used in this study. For all panel datasets used, test results identify the suitability of FE specification rather than RE specification therefore FE regressions are used in all three models specified for parameter estimation. 6.2 Current period return model To test if current E/P ratio and BV/P can explain current period (6-month) return in A and H share market respectively. Supposedly companies with higher E/P and BV/P should see higher next period returns. H0: current E/P and BV/P ratio cannot explain current return differences among AH companies, i.e. beta coefficients are not significant for both A and H sample companies The current period return model is specified as: ri,tA=?A+?1AEi, tAPi, tA+?2ABVi,tAPi,tA+ui,t ri,tH=?H+?1AEi, tHPi, tH+?2HBVi,tHPi,tH+ui,t ri,tA: semi-annual return of A share for company i at time t. ri,tH: semi-annual return of H share for company i at time t. Ei, tAPi, tA: 6-month earning price ratio for company i A-share at time t. BVi,tAPi,tA: 6-month book value price ratio for company i A-share at time t. Ei, tHPi, tH: 6-month earning price ratio for company i H-share at time t. BVi,tHPi,tH: 6-month book value price ratio for company i H-share at time t. ui,t: error term t : discrete time variable with semi-annual frequency i: AH company Both pooled regression and Fixed-effect regression are run respectively on A and H shares first for (1) full period 2002 S1 to 2010 S1 (2) pre-crisis period 2002 S1 to 2008 S1. 6.3 Return prediction model To test if current E/P ratio and BV/P ratio can predict next period (6-month return) in A and H share market respectively. H0: current E/P and BV/P ratio cannot explain not next period return differences among AH companies, i.e. beta coefficients are not significant for both A and H sample companies The return prediction model is specified as: ri,tA=?A+?1AEi, t-1APi, t-1A+?2ABVi,t-1APi,t-1A+ui,t ri,tH=?H+?1AEi, t-1HPi, t-1H+?2HBVi,t-1HPi,t-1H+ui,t ri,tA: semi-annual return of A share for company i at time t. ri,tH: semi-annual return of H share for company i at time t. Ei, t-1APi, t-1A: 6-month earning price ratio for company i A-share at time t-1. BVi,t-1APi,t-1A: 6-month book value price ratio for company i A-share at time t-1. Ei, t-1HPi, t-1H: 6-month earning price ratio for company i H-share at time t-1. BVi,t-1HPi,t-1H: 6-month book value price ratio for company i H-share at time t-1 ui,t: error term t: discrete time variable with semi-annu al frequency i: AH company 6.4 Return premium model See if return premium of both current and next period can be partly explained by (1) E/P and B/P in either market (2) A and H gap in E/P and B/P H0: current differences on E/P and BV/P ratio between AH companies cannot explain current or next period return differences among AH companies, i.e. beta coefficients are not significant for both AH sample companies The return premium models are specified as below: (1) Current period return premium: ri,tA-ri,tH=?t+?1Ei, tAPi, tA-Ei, tHPi, tH+?2(Bi, tAPi, tA-Bi, tHPi, tH)+ui,t (2) Next period return premium: ri,tA-ri,tH=?t+?1Ei, t-1APi, t-1A-Ei, t-1HPi, t-1H+?2(Bi, t-1APi, t-1A-Bi, t-1HPi, t-1H)+ui,t In all above three models, both pooled regression and Fixed-effect regression are run respectively on A and H shares for result comparison from a technical perspective. FE regression remedies the problem of unobserved heterogeneity in pooled OLS regression and should give more accurate parameter estimation. The same regress ions are also done for two samples (1) full period 2002 S1 to 2010 S1 (2) pre-crisis period 2002 S1 to 2008 S1, in order to detect whether estimations change with the inclusion of financial crisis period data. 7. Empirical results Interpretation of variables Inverses the two multiples P/E and P/BV are used as independent variables in all the models, therefore it can be useful to first make it clear on how these independent variables, i.e. E/P and BV/P could be interpreted. E/P ratio Multiple P/E can be interpreted as how much price an investor is willing to pay per dollar of earnings. A high P/E multiple indicates investors expectation of high earning growth in the future for the concerning company because otherwise the marking is over-paying for the company. Therefore a high E/P ratio reflects investors expectation of low earning growth because every dollar an investor pays for the stock is backed up by more dollars of earnings. But these stocks may represent value stocks that are ‘good buy because one can probably pay lower market price for company with good profitability. In conclusion: High E/P indicates low earning growth expectations and possibility of value stocks BV/P ratio Multiple P/BV can be interpreted as how much price an investor is willing to pay per dollar of tangible net asset of a company. A high P/BV multiple indicates high market expectation of cash flow that the company assets can generate in the future in the concerning company (yet again high future growth). Therefore a high BV/P ratio reflects low market expectation and valuation of the company net assets. But similar to high E/P ratio stocks, these high BV/P stocks can also imply ‘good buy because one can probably pay lower market price for the same value of net assets. In conclusion: High BV/P indicates low net asset valuations and possibility of value stocks 7.1 Current return model Fixed-effect model gives improved the fitness and parameter estimation though the results show largely same relationship as in the pooled OLS regression, FE model results should be relied on rather than those of pooled regression. Pre-crisis sample (2002 S1 to 2008 S1) results are looked at first since this excludes the possible disturbing factor due to the extreme market situation. In general, the E/P ratios turn to be insignificant in relation to share returns while BV/P ratios hold to be significantly negatively relevant to both A and H share returns. The negative coefficient of BV/P on share return might seem counter-intuitive at first sight. However, note that in the current return model, share return was actually return over the past 6 months, and BV/P are taken as of the current moment ratio with company current book value and price. With book value held the same, companies with higher BV/P have lower current price, which translates to lower past 6-month return. Table XX: Current model regression results with pre-crisis sample Pre-crisis sample A share (Pooled) A share FE R-squared = 0.0958 R-sq: within = 0.1668 coef p coef p aep 0.635 0.003 aep 0.444 0.132 abp -0.514 abp -0.863 _con 0.342 _con 0.512 H share (Pooled) H share FE R-squared = 0.0666 R-sq: within = 0.0918 coef p coef p aep 0.193 0.001 aep 0.095 0.466 abp -0.145 abp -0.202 _con 0.327 _con 0.393 Comparing the coefficients for A and H share FE regressions, one can see that A share return has higher relevance (higher absolute value of coefficients) with BV/P under PRC GAAP rule than that of H share return with BV/P under IFRS. This partially reflects a more efficient H market than A share market, in that H share investors cannot use AH company valuation ratios as much as A share investors can do in screening potential well performing AH companies. When applying the model on full period (2002 S1 to 2010 S1) samples, there is still significant relationship between current period A or H share return and BV/P ratios under respective financial reporting rule. However E/P ratios turn to be significant as well while implying a positive relationship between E/P and current period returns, reason for this could possibly be significantly disturbed price information during crisis period. Table XX: Current model regression results with full sample Full sample A share (Pooled) A share FE R-squared = 0.1047 R-sq: within = 0.1721 coef p coef p aep 0.742 0.004 aep 0.666 0.010 abp -0.529 abp -0.881 _con 0.344 _con 0.507 H share (Pooled) H share FE R-squared = 0.0680 R-sq: within = 0.0861 coef p coef p aep 0.254 0.002 aep 0.235 0.020 abp -0.140 abp -0.191 _con 0.311 _con 0.366 The coefficients estimated with A share sample are still bigger in absolute values than those of H share samples, also supporting a more efficient H share market conjecture as in pre-crisis sample. 7.2 Return prediction model Results based on pre-crisis sample show that current company valuation ratio BV/P can be used to predict next period (6-month) return of AH companies, given the significantly positive coefficients on BV/P for both A and H share regressions. Higher BV/P ratio indicates higher next period return and this positive relationship is higher for A shares than for H shares. However E/P ratios turn to be insignificant in predicting both share-returns. Table XX: Return prediction model regression results with pre-crisis sample Pre-crisis sample A share (Pooled) A share FE R-squared = 0.0253 R-sq: within = 0.0378 coef p coef p aep -0.019 0.932 aep -0.158 0.629 abp 0.264 0.012 abp 0.425 0.001 _con -0.044 0.460 _con -0.118 0.066 H share (Pooled) H share FE R-squared = 0.0351 R-sq: within = 0.0564 coef p coef p aep 0.117 0.362 aep 0.029 0.833 abp 0.103 0.002 abp 0.164 _con 0.028 0.509 _con -0.037 0.461 The full sample analysis results are in line with those with pre-crisis sample analysis, except for that BV/P coefficients for A share return rise much more significantly than those for H share return from pre-crisis sample to full sample. This indicates that with period that exceptional market condition occurs, investors would be able to rely more on fundamental financial ratios in stock picking than during normal market conditions, and this is more true in A share market than in H share market. Table XX: Return prediction model regression results with full sample Full sample A share (Pooled) A share (FE) R-squared = 0.0295 R-sq: within = 0.0508 coef p coef p aep -0.333 0.077 aep -0.400 0.150 abp 0.283 0.002 abp 0.477 _con -0.017 0.722 _con -0.106 0.043 H share (Pooled) H share (FE) R-squared = 0.0357 R-sq: within = 0.0378 coef p coef p aep -0.085 0.285 aep -0.134 0.189 abp 0.106 abp 0.165 _con 0.057 0.115 _con -0.004 0.913 7.3 Return premium model There are some research explaining dual-listed company price/return premium with hypothesis of liquidity, demand and speculative investors etc. However, the author believes it also makes sense to test whether the return disparity can be partly attributed to the gap of financial reporting figures for the same dual-listed company due to segmented financial reporting rules and separation of investor group. Results based on the specified model show that the gap of financial ratios E/P and BV/P cannot explain current A-H return disparity but BV/P can explain and be used to predict next period A-H return disparity. And the results hold true for both full sample and pre-crisis sample only as well, and the prediction relevance is significantly higher in pre-crisis period only. Table XX: Return premium prediction model regression results Full sample Pre-crisis sample (pooled) (FE) (pooled) (FE) A-H return A-H return A-H return A-H return R-squared = 0.0800 R-sq: within = 0.1239 R-squared = 0.1292 R-sq: within = 0.1877 coef p coef p coef p coef p a_hep 0.111 0.914 a_hep 0.105 0.602 a_hep 0.083 0.494 a_hep 0.020 0.899 a_hbp 0.026 a_hbp 0.026 a_hbp 0.178 a_hbp 0.251 _cons 0.023 0.412 _cons 0.022 0.015 _cons 0.049 0.064 _cons 0.095 0.001 Table XX: Current return premium model regression results Full sample Pre-crisis sample (pooled) (FE) (pooled) (FE) A-H return A-H return A-H return A-H return R-squared = 0.0016 R-sq: within = 0.0014 R-squared = 0.0020 R-sq: within = 0.0027 coef p coef p coef p coef p a_hep 0.051 0.095 a_hep 0.058 0.604 a_hep 0.054 0.483 a_hep -0.016 0.928 a_hbp 0.019 0.890 a_hbp 0.013 0.644 a_hbp 0.019 0.428 a_hbp 0.030 0.365 _cons 0.025 0.018 _cons -0.053 0.029 _cons -0.055 0.077 _cons -0.048 0.108 Conclusion This paper take up a specific angel looking into value relevance of two price ratios among Chinese AH dual-listed companies, given current stock market segmentation. Firstly an introduction of Chinese stock market and differently applied financial reporting rules in segmented markets were given, followed by a review section of prior research on relevant issues, including market segmentation and dual-listed stock price/return disparity, value relevance of accounting information and stock return predictability across individual shares. Three fixed-effects models were constructed to explore the relationship between price ratios and stock returns on A and H market respectively, and a comparison of results is done on both pre-crisis samples and full period samples to shed light on the possible impact of recent financial crisis. It was found out that: Current E/P and BV/P explains current period return of both A and H shares, with E/P positively and BV/P negatively relates to current period return among AH companies. Current BV/P can predict next period return for both A and H shares, and it is a positive relationship. Current E/P and BV/P gap under two financial reporting rules cannot explain the current A-H return disparity, but current BV/P gap under two financial reporting rules can predict next period A-H return disparity A share returns show higher relevance with E/P and BV/P ratios than H share returns do in general, reflecting a less efficient A share market. Crisis period twist the informational efficiency of markets and impact the relevance of E/P to current return and B/P to next period return. Limitation and possible future research This paper found out some interesting empirical results that support for example explanation and prediction of A-H return premium based on BV/P ratio, which practically could indicate an investment strategy. However, the strategy is only valid to the extent that no frictions such as investment barriers, transaction costs etc. Implementation of the strategy therefore is subject to restrictions and the deregulations in reality. All models are constructed based on fixed-effect specification which is an improvement over pooled OLS regressions and has certain advantages over time-series or cross-sectional regression, however, the data size available is another limitation. Further research can be explored on improving current limitations discussed in previous paragraph. Also the specified models which include only two price ratios as independent variable could potentially be extended to include more variables that may explain A or H share returns (or disparity), which can be other fin ancial information such as expected growth of earnings per share, or stock liquidity measurement.

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Riordan Manufacturing Company Review and Analysis Free Essays

Riordan Manufacturing Company: Review and Analysis Jennah Es-Sudan, Monica Malcom, Annie Willis and Yeong Yoo University Of Phoenix BUS/430 December 1, 2009 Riordan Manufacturing Company Review and Analysis The focus of this paper is to analysis the regulatory measures of Riordan Manufacturing. Riordan Manufacturing, Inc. is an industry leader in the field of plastic injection molding. We will write a custom essay sample on Riordan Manufacturing Company: Review and Analysis or any similar topic only for you Order Now With state-of-the art design capabilities, creating innovative plastic designs that have earned international acclaim. Attention to detail, extreme precision and enthusiastic quality control are the hallmarks of Riordan Manufacturing. With facilities in San Jose, California, Albany, Georgia, Pontiac, Michigan and Hangzhou, China, Riordan has the capacity to fulfill unique needs. Riordan Manufacturing is wholly owned by Riordan Industries, a Fortune 1000 enterprise. The company decided to closed their plant in Michigan and open it in China. Opening this business in another country has advantages. Our team will also discuss unfair import laws, Foreign Corrupt Practices Act of 1977, Patents, trademarks, and intellectual property, and environmental regulation and how they relate to doing business in China. Unfair Import Laws The government has assertively imposed our anti-dumping laws to fight unfair Chinese trade. † alleged Commerce Secretary Carlos M. Gutierrez. â€Å"China’s economy has developed to the point that we can add another trade remedy tool, such as the countervailing duty law. The China of today is not the China of years ago. Just as China has evolved, so has the range of our tools to make sure Americans are treated fairly. By acting on the petition filed last October, the United States today is signifying its continued pledge to leveling the playing field for American manufacturers, workers and farmers. Foreign Corrupt Practice Act (FCPA of 1977) Congress enacted the Foreign Corrupt Practices Act (â€Å"FCPA† or â€Å"the Act†) in 1977 in reaction to the Watergate scandal. Widespread media coverage of unreported crusade assistance and potentially unlawful payments to strange officials encouraged the Securities and Exchange Commission (â€Å"SEC†) to begin an investigation. The SEC’s investigation eventually exposed that more than 400 U. S. companies had paid bribes to foreign governments and politicians, totaling more than $300 million. An FCPA violation requires that action be taken with a corrupt intent. Corrupt means an evil motive of purpose, and intent to wrongfully influence the recipient of the payment or offer to misuse his official position or to influence someone else to do so. The act does not require the corrupt act to be a success; it just means that an attempt was made to influence an alien bureaucrat. China has made great efforts to combat essentials of bribery—through endorsement and enforcement of strict anti-bribery laws and penalties—it still remains a cause of concern in the China business market. For example, in 2005, 11,071 members of the Communist Party of China (â€Å"CPC†) were disqualified from the party as reprimanded for dishonesty. In addition, Chinese magistrates dealt with 120,000 cases of misappropriation, corruption, and negligence of duty over the past five years. Given the size and magnitude of China’s market, these issues also cause alarm for U. S. companies doing business in China. Chinese and other overseas companies may make unlawful expenses in China with restricted risks, U. S. ompanies doing business in China may feel marketable stress to disobey the Act to avoid finding themselves at a aggressive difficulty to companies that are not subject to the same laws or similar enforcement. For this reason, U. S. companies operating in China need a solid FCPA compliance program to avoid action for FCPA violations and to avoid becoming knotted in China’s domestic corruption and bribery laws. Patents, Trademarks, and Intellectual Property Compan ies try to capture the markets by issuing licensing permits for intellectual properties to increase profits for their business. These intellectual properties included patents and trademarks. Unfortunately, nations are still struggling to adopt a consistent international legal system that governs the intellectual property. They often have restrictions which includes geographical/and field use limitations and customer restriction. The Paris Convention is a guarantee that in each signatory country, foreign trademark and patent application from other signatory countries will receive the same treatment. According to United States Patent and Trademark Offices (2009) a patent for an invention is the grant of a property right to the inventor. There were problems and drawbacks with this particular agreement so in 1970 the patent cooperation Treaty was adopted. This particular agreement addresses the centralized utility patent application process (Schaffer, Agusti, Earle, 2009). A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others United States Patent and Trademark (2009). Riordan Manufacturing makes plastic products in the United States and decided to move the plant that makes Pontiac products to China. This was a way to produce goods cheaper than in the United States and enter the market international. When making this move into the international market Riordan Manufacturing has trademarks on their plastic bottles and other plastic products that the Paris Convention would cover. Environmental Regulations Environmental regulations are guidelines that are in place to govern how matters that effect human life and environment handle. WTO rules a nation can require foreign producers to comply with environmental standards that are required by domestic firms (Schaffer, Agusti, Earle, 2009). Riordan Manufacturing had to make sure that when moving their company from Michigan to China that the environmental regulations are followed. China has been working with great determination in recent years to develop, implement, and enforce a solid environmental law framework. Chinese officials face critical challenges in effectively implementing the laws, clarifying the roles of their national and provincial governments, and strengthening the operation of their legal system EPA- China Environmental Initiative (2009). Having a manufacturing company Riordan had to make sure that the plant that was being built was welcome in China and it adhered to the regulation guidelines. Riordan also had to follow the pollution regulation and the energy regulation. Production of their products was welcome and they learned the environmental regulation to take their business to China. Political Risks of Operating a MFG Company in China China has been one of desirable areas that any international companies would want to expand their business to. Its evolving economy, huge manufacturing base, enormous supply of natural resources are dangerously attractive, yet the expansion to this developing country comes with risks. The political risks in China Riordan Company should consider is that China is increasingly pressuring foreign investors to transfer technology to local producers, which could erode the patent protections and competitiveness of investors. Next fact that Riordan should consider is that as they focus on shifting growth from exports to domestic consumption, China’s leaders may withdraw tax benefits for foreign investors. Infrastructure bottlenecks and strong upward pressures on government-controlled electricity and fuel prices also create considerable uncertainty around manufacturing efficiency and operating expenses. Our initial decision to locate our China operations in Hangzhou was driven largely by the fact that our Chinese partners already had facilities there that should be able to handle all regulations and political surroundings. As a join venture partner, Riordan Company should understand sporadic fuel shortages and worsening urban gridlock inject ambiguity into forecasts for domestic auto demand growth. In short, low-cost manufacturing and vast potential domestic demand is offset by uncertainty in regulatory and infrastructure capacity. This makes China a potentially higher-risk, higher-reward investment destination. Riordan Company executive management also should outline framework for understanding how local political and market dynamics affect foreign ventures. China holds tremendous promise as a manufacturing centre and market, but management should remember are social, regulatory and energy issues around the next curve in the road. Political-risk analysis should have been processed to contemplate not just broad, easily observable trends but also the nuances of society and the quirks of personality that can affect a venture’s success. For Riordan Company to be successful in join venture in Hangzhou China Riordan must obtain professionally prepared political risk analysis giving current assessments and forecasts of future stability. They can also seek consulting firms, insurance industry reports, reports of U. S. government agencies, and informal discussions with experienced international bankers nd shipping company representatives. Outline of the Possibilities for Foreign Investment and Securities A company that operates in a foreign country has to comply with the laws of that country. As a rule international business causes great pressures for U. S. business managers. A projected high profit margin weighs little if local law prevents repatriation of profits to the foreign investor’s home jurisdict ion. Riordan Manufacturing made the decision to expand internationally for the following reasons. China attempts to encourage investments from foreign residents. The following are among the reasons that foreign investors are attracted to China: †¢ Extremely low labor costs. †¢ A tremendous buyers’ market in China itself with a population of 1. 3 billion. †¢ An expectation of a sharp increase in the buying power of Chinese residents, a fact that is influenced by the annual GDP of over 8% per annum and the low rates of inflation. †¢ In recent years, Chinese laws concerning foreign investments have been significantly eased. The total FDI in China for 2006 totaled 63 billion dollars. Conclusion From the beginning of the nineties and particularly from 2001, when China joined the WTO, until the present, the attitude to foreign investment in China has changed, among other matters, foreign investors are permitted to form companies that are 100% owned by foreign capital. Sales to the local market are permitted and foreign investment is also allowed in sectors other than industry and hi-tech, such as banking, insurance, financial services, etc. As a result of joining the WTO, China is expected to standardize specific benefits that were previously granted only to overseas investors or only to Chinese companies. As a general rule, industries in China that are open to foreign investments are divided into 3 categories, an encouraged investment, a restricted investment and a prohibited investment. Foreign investors cannot invest in projects that are connected with the military and defense industries in China. There are also restrictions on 100% control of foreign investors over transport, the automobile industry and power stations. Benefits that China grants to foreign investors are not given in the form of grants. Most benefits are in the form of a tax benefit, including value added tax, customs and income tax benefits in putting the mphasis on an investment in a Special Economic Zone (SEZ) or in special sectors and areas. The benefits granted are as previously approved according to the nature of the foreign investment. There are 5 SEZ’s in China in the south of the country, the main tax benefits are: corporate tax of 15%. A benefit of â€Å"2 + 3 years â€Å"which means an exemption from tax for the first two years and tax at the rate of 12. 5% for the next three years. Pudong Zone (Shanghai) In the Pudong zone there are 5 development zones specializing in hi-tech, financial services, agriculture and more. The benefits are similar to those granted to investors in an SEZ. References Schaffer, R. , Agusti, F. , Earle, B. (2009, 2005). International Business Law and Its Environment (7th Ed. ). Mason, Ohio: South-Western, Cengage Learning. World Wide- Tax Finance (2009). China Foreign Investment Incentives. Retrieved December 1, 2009, from www. worlwide-tax. com/china/chi_invest. asp United States Patent and Trademark Office 2009. Definitions. Retrieved on November 30, 2009 from www. uspto. gov/ EPA- China Environment Law Initiative November 2009. Retrieved on November 30, 2009 from www. epa. gov/ogc/china/initiative_home. htm How to cite Riordan Manufacturing Company: Review and Analysis, Papers

Definition of Project Management Samples †MyAssignmenthelp.com

Question: Discuss about the Definition of Project Management. Answer: Definition of Project Management The methodologies that are involved in Project Management are considered as a bunch of processes, which cannot be repeated and the methodologies are needed for making a project that is efficient, flexible, and consistent. The methodologies that are involved in project management improves the way of managing all the projects involved in an organization. According to (Kerzner Kerzner, 2017), the methodologies of project management have all the processes that are needed involved in a project including responsibilities, templates, roles, and description. There is a structure known as WBS (Work Breakdown Structure) and gnat chart, which should all the details of the project. According to the strategy of an organization, methodologies of project management improve the project alignment involved in a project. The competitive advantage is also increased by using the project methodologies in a project because it helps to complete the project faster and with most efficient way. Methodologies also help to lower the cost of completing the project. The requirements of all the employees can be predicted accordingly on priority basis by the help of project management methodologies. As stated by (Schwalbe, 2015), methodologies helps to improve information management especially, in areas that deals with least visibility in organization. The employees or the team members who are involved in a team can improve their performance and skills that are needed to handle a project, also assure the ownership of all processes, and analyze the result in a project. The stakeholders involved in a project are satisfied using the methodologies in project management. The methodologies plays an important role in project management life cycle. Mostly five different methodologies are present in project management. Fleming Koppelman, (2016), stated that those methodologies help in solving the processes in projects, which works with project management. The services included in Internet Technology are also provided by methodology of project management. The standards included in project management generally helps in managing and initiating projects carried out in a project. The methodologies involved in project management give some standards providing some new processes and tools so that the job of the project manager becomes easy. The methodologies that are involved in project management generally have definitions, templates, and guidelines that are related with all the activities and processes dealing with a project success (Turner, 2016). All projects that deals with methodologies of project management works on a same ground that is common for all. Objectives are provided by those methodologies that helps to create and design an objective of a project that is comprehensive, accessible, flexible, and reasonable. Some particular disciplines are included in the methodologies that allows the content of the application project to work better and provide a clear judgment for project manager. Similarities and Difference between PMBOK and PRINCE2 methodologies Similarities: Both PMBOK and the PRINCE2 method generally provide bunch of techniques and templates as well as tools so that the projects can be managed and requirements of the projects can be re-invented. The main goal of PMBOK and the PRINCE2 method helps to handle the projects that have common characteristics and also has the ability to handle the problematic projects (Martinelli Milosevic, 2016). These methodologies help to input a unique change, accelerate the change, and also provide new deliverables for all the projects that are handled by them. Both methods helps to reduce the risk involved in projects undertaken by scheduled slippage, delivery of projects that are unsatisfactory, and projects that are overspend. Differences: PMBOK method does not give an output that has logs, baseline documents, configuration, and logs. On the other hand, PRINCE2 methods provide all these outputs. The PMBOK methodology provide processes that has proper guidelines for selecting a tool used in estimation of three point, gathering information techniques, earned value analysis, and matrices of stakeholder (Serrador Pinto, 2015). The PRINCE2 method does not provide such guidelines. There should be a regular review on the methodology of PRINCE2 in a business case. The PMBOK method generally looks after the external process involved in the project. The project manager dealing with PMBOK method does not have control on the project after the project has been started. PRINCE2 methodology in Project Life Cycle The PRINCE2 methodology of project management is mostly similar to another type of project management methodology known as PMBOK. The PRINCE2 methodology is very much useful for delivering a project successfully in a PLC. In a PLC, there are three factors of PRINCE2 methods, which gives a proper planning for the methodology (Joslin Mller, 2015). The main factors that are involved are: All the processes that are involved in project management are managed by stages. In order to prepare for a project, without the method of PRINCE2 it is not possible to handle a project with a detailed plan in realistic way. Practically handling the project with detailed plan is not possible without the PRINCE2 method in a project life cycle. So, all the processes are divided into stages so that it can be handles easily. Planning for a project is the main way to handle the project with PRojects IN Controlled Environments methodology. The kind of plan that is used in this method is explained in detailed with all the characteristics of the processes involved in the project. Higher level of planning is done while starting the project with PRINCE2 methodology (Heldman, 2018). Stage plans are organized while carrying out the project with PRINCE2 method. Then the project team members execute the project finally. For starting with the project in PRINCE2 methodology, generally three processes are carried out of all seven processes that are involved in PRINCE2 method. References Fleming, Q. W., Koppelman, J. M. (2016, December). Earned value project management. Project Management Institute. Heldman, K. (2018).PMP: project management professional exam study guide. John Wiley Sons. Joslin, R., Mller, R. (2015). Relationships between a project management methodology and project success in different project governance contexts.International Journal of Project Management,33(6), 1377-1392. Kerzner, H., Kerzner, H. R. (2017).Project management: a systems approach to planning, scheduling, and controlling. John Wiley Sons. Martinelli, R. J., Milosevic, D. Z. (2016).Project management toolbox: tools and techniques for the practicing project manager. John Wiley Sons. Schwalbe, K. (2015).Information technology project management. Cengage Learning. Serrador, P., Pinto, J. K. (2015). Does Agile work?A quantitative analysis of agile project success.International Journal of Project Management,33(5), 1040-1051. Turner, R. (2016).Gower handbook of project management. Routledge.