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Asia Pacific Business and Economic Policy Research Unit

Co-directors: Masao Nakamura and Ilan Vertinsky

 IAR’s Asia Pacific Business and Economic Policy Research unit was established to promote research on issues pertinent to the economic transformation and development of Asian countries as well as their trade relations and business practices in the Pacific Rim. It also aims to facilitate participation of researchers and graduate students from IAR and other academic units to get involved in Asia related business research.  The following are some of the research topics currently under investigation: foreign direct investment and trade in Asia; corporate governance mechanisms and economic development in East Asia; environmental management in Japan and Canada as well as forest management in Asia.  Further Information on our recent research activities, publications, conference and presentations on research topics of interest to the unit are found below.

M. Nakamura, "Adoption and Policy Implications of Japan’s New Corporate Governance Practices after the Reform," Asia Pacific Journal of Management 28, 2011, 187-213.
 
M. Nakamura, et al., "Returns to scale: concept, estimation and analysis of Japan’s turbulent 1964-1988 economy,"
Canadian Journal of Economics 44, 2011, 451-485.

O. Branzei, M. Nakamura and I. Vertinsky, "Learning in collaborative R&D: When multinationality matters,"
Asian Business and Management 10, 2011, 9-36.  
 
D. Qianqian and I. Vertinsky, "International patterns of ownership structure choices of start-ups: does the quality of law matter?" Small Business Economics, 2011, 37 (2) : 235 - 254.

M. Nakamura, Changing Corporate Governance Practices in China and Japan: Adaptations of Anglo-American Practices (Ed.), Palgrave Macmillan, London and New York, 2008.

2010/2011

Working Papers

Yichen Lin and Masao Nakamura, "International business strategies," presentation given at National Tainan University, Tainan, Taiwan, April 2010.

Professor Yichen Lin was a Visiting Professor from Department of Business & Management, Graduate Institute of Technology Management, National University of Tainan           

2009/2010

Working Papers

Jian Deng and Masao Nakamura,"The management practices of Toyota Motor's auto assembly plant, a joint venture with a Chinese auto maker, in Changchun, China."

Jian Deng was a Visiting Professor from Business Administration School, Changchun Taxation College, China

 

2008/2009

Working Papers

2008 WP1. “The Rise of China and Prospect for an East Asian Community,”
by Hidetaka Yoshimatsu.

2008 WP2. “Developmentalism and Policy Networks in Regional Cooperation in Northeast Asia,”
by Hidetaka Yoshimatsu.

Professor Yoshimatsu was a Visiting Scholar at IAR’s Asia Pacific Business and Economic Policy Research Unit in 2008. 
He is currently Professor at the Graduate School of Asia Pacific Studies at Ritsumeikan Asia Pacific University in Japan. 

2006/2007

IAR’s Asia Pacific Business and Economic Policy Research unit was established to promote research on issues pertinent to the economic transformation and development of Asian countries as well as their trade relations in the Pacific Rim. It also aims to facilitate participation of researchers and graduate students from IAR and other academic units to get involved in Asia related research.  Professor Yasunori Katsurayama who specializes in mathematical finance at the School of Social Sciences of Waseda University in Tokyo completed his two-year stay as a Visiting Scholar of this unit on March 29, 2007.  The following are some of the research topics currently under investigation: foreign direct investment and trade in Asia; corporate governance mechanisms and economic development in East Asia; environmental management in Japan and Canada as well as forest management in Asia. Professor Katsurayama's publications follow.

Y. Katsurayama Publications

(1) “Optimal Timing for Investment Decisions,” published in Journal of the Operations Research Society of Japan, Vol. 50, No. 1, 2007, 46-54.
Abstract: The net present value (NVP) is an important concept in investment decisions. As Ingersoll and Ross (1992) have pointed out, the future fluctuations in interest rates are expected to have significant effects on the present value (PV) of a project being considered. If interest rates are expected to fall off next year, deferring the investment for another year is likely to be financially beneficial even if its current NPV is positive. The effects of such a deferment can be valued from its corresponding American option value. Berk (1999) proposed a simple criterion for investment decisions which incorporate this American option value of investment. The simplicity of this model is obtained from the appropriate usage of a callable bond. It is noteworthy that this model does not postulate any assumptions on the behaviour of interest rates. But this construction of the model has pros and cons. It is easy to implement this model in business because the only adjustment required in this model is to replace the interest rate in NPV with the callable rate. On the other hand, the properties of this criterion have not been clarified. In this paper we analyse Berk’s model under the assumption that interest rates follow the geometric Brownian motion (GBM). By assuming this movement of interest rates, we can derive an analytical solution for the optimal timing for the investment in terms of the parameters of the GBM. This also allows us to perform comparative statistics and simulation. These results extract some properties of Berk’s model and help potential users of the model in implementing it.
(2) “Announcement Effects of Seasoned Equity Offerings (SEOs) in Japanese Stock Markets,” Working Paper, School of Social Sciences, Waseda University, 2007.
Abstract: The announcement effects of SEOs in Japan are of interest to researchers in empirical finance. Many papers report strong price decline after SEOs for the U.S. Unfortunately no empirical findings on this topic exist yet for Japan. One reason for this is the limited sample size on relevant observations. Another reason is that most observations that exist for Japan are on convertible bonds offerings. Japanese evidence so far suggests, contrary to the U.S. evidence, that equity prices go up slightly following SEOs in Japan. In this paper we test the announcement effects using a sample of more than 1,000 SEOs for firms listed on the Tokyo Stock Exchange. Using this sample, we find that the announcement effects observed after SOEs are similar for both Japanese and U.S. stock markets after year 2000.
The recent publications and conference and other presentations on research topics of interest to the unit are also listed under the profiles of the investigators in the IAR Annual Report (2006/2007).

2005/2006

IAR’s Asia-Pacific Business and Economic Policy Research unit was established to promote research on issues pertinent to the economic transformation and development of Asian countries as well as their trade relations in the Pacific Rim. It also aims to facilitate participation of researchers and graduate students from IAR and other academic units to get involved in Asia related research.  Professor Yasunori Katsurayama who specializes in
mathematical finance at the School of Social Sciences of Waseda University in Tokyo has been visiting this unit working as an IAR Visiting Scholar for the period, March 30, 2005-March 29, 2007.  The following are some of the research topics currently under investigation: foreign direct investment and trade in Asia; corporate governance mechanisms and economic development in East Asia; environmental management in Japan and elsewhere.  Professor Katsurayama's publications while at this unit are given below.

Y. KATUSRAYAMA PUBLICATIONS

• “Indiscrepancy of Credit Ratings” (in Japanese). Modern Role of Accounting Information. Tokyo: Hakutou Syobou Publishers, 2005.
• Chapters 4,5,7 (in Japanese). Basic Financial Management. Tokyo: Doubun-Kan Publishers, 2005.
• “Optimal Timing for Investment.” Working Paper. Waseda University, School of Social Science, 2004.

PRESENTATIONS

June 2006 “Announcement Effect of Seasoned Equity Offerings in Japanese Market.” INFORMS (Institute of Operations Research and Management Science) International
Meeting, Hong Kong.
September 2004 “Optimal time for investment.” Japan Industrial Management Association Fall Meeting.
The recent publications and conference and other presentations on research topics of interest to the unit are also listed under the profiles of the investigators in the IAR Annual Report (2005/2006).

2004/2005

The Asia Pacific Business and Economic Policy Research Unit has completed a study for the APEC Finance and Development Program on international financial centres in the Asia Pacific region. This project brought together investigators from diverse faculties to include Arts, Commerce, and Law (D. Edgington, M. Levi, M. Nakamura, and Ilan Vertinsky) under the leadership of Pitman B. Potter, Director of IAR. It also involved several MAPPS students (Eleanor Gill, Belinda Hung and Ge Ying) and Dr. Hong Cui, a Postdoctoral Fellow.  The study highlighted the strong links that exist between the real economy and the financial service sectors as well as the strong interrelationships between the different financial centres. The study also investigated inter-market interdependencies. Despite anecdotal evidence that “competitive” relationships exist between some markets (e.g. Singapore and Hong Kong) and “complementary” relationships exist between some markets (Tokyo and Hong Kong), after correcting for secular trends, no significant interrelationships were found i.e. movements in the financial sector in one center were not significantly correlated with movements in another. Indeed, the only strong significant relationship found was between the stock exchange capitalization in Hong Kong and Shanghai. Near significant results raise, however, the possibility of a relationship between the strategies of international banks with respect to Hong Kong and Singapore. Both centres seem to fulfill similar strategic regional niches and banks seem to respond in similar ways in both markets to changing conditions of the global economy. Indeed, the international nature of both economies suggests that, in relevant dimensions, their markets respond in the same direction to global economic shocks (though clearly with a difference in the size of the impact).  Our main recommendation is, therefore, to improve the availability and standardization of regional economic and financial data. It is of paramount importance to identify the direction of the causality and the strength of relationships between financial and real variables. Such knowledge may allow fine tuning strategies aimed at financial sector development and ensuring that gaps in financial services would not slow economic growth.  A new project was developed with the support of SSHRC and the Hampton Fund. The project deals with trust building and culture. The study focuses on the role the characteristics of the workplace and participation in voluntary organizations have on the development of social capital in the form of initial trust. The study provides a comparison of trust building mechanisms in China and Canada. The Chinese team is located in Shanghai Jiao Tong University. A related joint project with the China-Europe International Business School in Pudong is examining the relationship between the quality of the legal system and “trust” in business transactions (in particular trust measured in terms of the extension of credit to customers). The recent publications and conference and other presentations on research topics of interest to the unit are also listed under the profiles of the investigators in the IAR Annual Report (2004/2005).

2003/2004

IAR’s Asia-Pacific Business and Economic Policy Research unit was recently established to promote research on issues pertinent to the economic transformation and development of Asian countries as well as their trade relations in the Pacific Rim. It also aims to facilitate participation of researchers and graduate students from IAR and other academic units to get involved in Asia-related research. The following research topics are currently under investigation: trade regimes in Asia (with a focus on China’s membership in WTO); development of financial centers in the Asia Pacific; economic development and transformation in the two delta regions of China; entrepreneurship, small and medium size enterprises, and overseas entrepreneurs in Asia; and infrastructure development in Asia. Currently the unit is based in Room 273 of the C. K. Choi Building. Some of these research activities are conducted for the research project entitled “The Preeminence of International Financial Centers in Asia Pacific Region” funded by the Secretariat for APEC Finance and Development Program (AFDP). The AFDP project involves the following researchers: Pitman Potter (IAR Director) as the principal investigator, and David Edgington (Geography), Maurice Levi (Sauder School of Business), Masao Nakamura (IAR, Sauder School of Business, Applied Science), Ilan Vertinsky (Graduate Studies, Sauder School of Business, IAR) and Matthew Au (Ph.D. student in the Faculty of Law) as co-investigators. In addition, the following M.A. students are participating in the project: Martin Andresen (Geography), Joey Comeau (MAPPS), Eleanor Gill (MAPPS), Belinda Hung (MAPPS), Aviva Li (MAPPS) and Ge Ying (MAPPS). Next year Professor Yasunori Katsurayama who specializes in mathematical finance at the School of Social Sciences of Waseda University in Tokyo will be visiting this unit as an IAR Visiting Scholar for the period, March 30, 2005 - March 29, 2006.  The recent publications and conference and other presentations on research topics of interest to the unit are also listed under the profiles of the investigators in the IAR Annual Report (2003/2004).

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