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Venture Capital Investments and Merger and Acquisition Activity Around the World -- by Gordon M. Phillips, Alexei Zhdanov

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We examine the relation between venture capital (VC) investments and mergers and acquisitions (M&A) activity around the world. We find evidence of a strong positive association between VC investments and lagged M&A activity, consistent with the hypothesis that an active M&A market provides viable exit opportunities for VC companies and therefore incentivizes them to engage in more deals. We also explore the effects of country-level pro-takeover legislation passed internationally (positive shocks), and US state-level antitakeover business combination laws (negative shocks), on VC activity. We find significant post-law changes in VC activity. VC activity intensifies after enactment of country-level takeover friendly legislation and decreases following passage of state antitakeover laws in the U.S.

The Impact of Bank Credit on Labor Reallocation and Aggregate Industry Productivity -- by John (Jianqiu) Bai, Daniel Carvalho, Gordon M. Phillips

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We provide evidence that the deregulation of U.S. state banking markets leads to a significant increase in the relative employment and capital growth of local firms with higher productivity and that this effect is concentrated among young firms. Using financial data for a broad range of firms, our analysis suggests that this effect is driven by a shift in the composition of local bank credit supply towards more productive firms. We estimate that this effect translates into economically important gains in aggregate industry productivity and that changes in the allocation of labor play a central role in driving these gains.

U.S. Job Flows and the China Shock -- by Brian J. Asquith, Sanjana Goswami, David Neumark, Antonio Rodriguez-Lopez

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International trade exposure affects job creation and destruction along the intensive margin (job flows due to expansions and contractions of firms' employment) as well as along the extensive margin (job flows due to births and deaths of firms). This paper uses 1992-2011 employment data from the {universe} of U.S. establishments to construct job flows at both the industry and commuting-zone levels, and then estimates the impact of the `China shock' on each job-flow type. The China shock is accounted for by either the increase in Chinese import penetration in the U.S., or by the U.S. policy change that granted Permanent Normal Trade Relations (PNTR) status to China. We find that the China shock affects U.S. employment mainly through deaths of establishments. At the commuting-zone level, we find evidence of large job reallocation from the Chinese-competition exposed sector to the nonexposed sector, and establish that the gross employment effects of the China shock are fundamentally different from those of a more general adverse shock affecting the U.S. demand for domestic labor.

Job Tasks, Time Allocation, and Wages -- by Ralph Stinebrickner, Todd R. Stinebrickner, Paul J. Sullivan

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While a burgeoning literature has extolled the conceptual virtues of directly measuring the underlying job tasks that define work activities, in practice task-based approaches have been hampered by well-known data limitations. We study wage determination using data collected specifically to address these limitations. Most fundamentally, we construct the first longitudinal dataset containing job-level task information for individual workers. New quantitative task measures take advantage of unique survey questions that ask respondents to detail the amount of time spent performing People, Information, and Objects tasks at different skill levels. These measures have clear interpretations, suggest natural proxies for on-the-job human capital accumulation, and provide methodological guidance for future data collection initiatives. A model of comparative advantage highlights the benefits of the unique data features, and guides the specification and interpretation of empirical models. We provide new findings about the effect of current and past tasks on wages. First, current job tasks are quantitatively important, with high skilled tasks being paid substantially more than low skilled tasks. Second, there is no evidence of learning-by-doing (i.e., effects of past tasks) for low skilled tasks, but strong evidence for high skilled tasks. Current and past high skilled information tasks are particularly valuable, although high skilled interpersonal tasks also play a significant role. Shifting 10 percent of work time from low skilled people tasks to high skilled information tasks increases a worker's yearly wage by 22 percent after ten years. The accumulation of valuable task-specific experience accounts for 70 percent of this increase, and the direct current-period effect of performing different tasks accounts for the remainder.

Endowments, Skill-Biased Technology, and Factor Prices: A Unified Approach to Trade -- by Peter M. Morrow, Daniel Trefler

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We develop a multi-factor, multi-sector Eaton-Kortum model in order to examine the impact of trade costs, factor endowments, and technology (both Ricardian and factor-augmenting) on factor prices, trade in goods, and trade in the services of primary factors (value-added trade). This framework nests the Heckscher-Ohlin-Vanek (HOV) model and the Vanek factor content of trade prediction. We take the model to the data using skilled and unskilled data for 38 countries. We have two findings. First, the key determinants of international variation in the factor content of trade are endowments and international variation in factor inputs used per dollar of output. Input-usage variation in turn is driven by (1) factor-augmenting international technology differences and (2) international factor price differences. Second, our estimates of factor-augmenting international technology differences -- which imply cross-country variation in skill-biased technologies -- are empirically similar to those used to rationalize cross-country evidence on income differences and directed technical change.

Reconsidering the Consequences of Worker Displacements: Firm versus Worker Perspective -- by Aaron B. Flaaen, Matthew D. Shapiro, Isaac Sorkin

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Displaced workers suffer persistent earnings losses. This stark finding has been established by following workers in administrative data after mass layoffs under the presumption that these are involuntary separations owing to economic distress. This paper examines this presumption by matching survey data on worker-supplied reasons for separations with administrative data. Workers exhibit substantially different earnings dynamics in mass layoffs depending on the reason for separation. Using a new methodology to account for the increased separation rates across all survey responses during a mass layoff, the paper finds earnings loss estimates that are surprisingly close to those using only administrative data.

Why are Banks Exposed to Monetary Policy? -- by Sebastian Di Tella, Pablo Kurlat

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We propose a model of banks' exposure to movements in interest rates and their role in the transmission of monetary shocks. Since bank deposits provide liquidity, higher interest rates allow banks to earn larger spreads on deposits. Therefore, if risk aversion is higher than one, banks' optimal dynamic hedging strategy is to take losses when interest rates rise. This risk exposure can be achieved by a traditional maturity-mismatched balance sheet, and amplifies the effects of monetary shocks on the cost of liquidity. The model can match the level, time pattern, and cross-sectional pattern of banks' maturity mismatch.

A Stream of Prospects or a Prospect of Streams: On the Evaluation of Intertemporal Risks -- by James Andreoni, Paul Feldman, Charles Sprenger

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Recent debate has identified important gaps in the understanding of intertemporal risks. Critical to closing these gaps is evidence on which dimension of intertemporal risk - the risk or the time - is evaluated first. Though under discounted expected utility this ordering is of no consequence, under discounted non-expected utility models the order of evaluation is critical. We provide experimental tests in which different orderings of evaluation generate different predictions for behavior. We find more support for the notion that the risk dimension is evaluated first.

CFTC Releases Rule Enforcement Review of the Chicago Board of Trade, Chicago Mercantile Exchange, Commodity Exchange, Inc. and New York Mercantile Exchange, Inc.

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The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) has issued the results of a rule enforcement review that recommends the exchanges reviewed make certain improvements as noted below.



Malawi Stock Exchange's Monthly Market Performance Report - November 2017

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Click here to download Malawi Stock Exchange's monthly market performance report.

SEC Files Fraud Charges Against ICO Organizer

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The U.S. Securities and Exchange Commission has filed charges against two organizers of a $15 million initial coin offering.

Bitcoin Spin-Offs Caught in a Bull-Bear Tug Of War

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Bitcoin's recently forked spin-offs bitcoin cash and bitcoin gold are caught up in battles between the bulls and bears. But which side will win out?

Weekly Top 5 Papers – December 4th, 2017

NEX Markets Volumes - November 2017

Remarks Before The 2017 AICPA Conference On Current SEC And PCAOB Developments - Michal P. Dusza, Professional Accounting Fellow, SEC Office Of The Chief Accountant

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The Securities and Exchange Commission (“SEC” or “Commission”) disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This speech expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.

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IMF Managing Director Christine Lagarde Names Nancy Asiko Onyango As Director Of The IMF’s Office Of Independent Audit

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International Monetary Fund (IMF) Managing Director Christine Lagarde today announced her decision to appoint Nancy Asiko Onyango as Director of the Fund’s Office of Internal Audit and Inspection (OIA). The OIA conducts independent examinations of the IMF’s internal control and governance processes.

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Remarks Before The 2017 AICPA Conference On Current SEC And PCAOB Developments, Robert B. Sledge, Professional Accounting Fellow, Washington D.C.

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The Securities and Exchange Commission (“SEC” or “Commission”) disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This speech expresses the author's views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.

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‘Buyer Beware’ As Bitcoin Investors See A $2,000 Fall In 24 Hours, Observes GlobalData 

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Bitcoin Investors had no time to count their profits as the cryptocurrency - worth a new record high of $11,395 on Wednesday 29th November 2017 - lost $2,000 in just 24 hours plunging to $9,000 on Thursday 30th November 2017, before a slight improvement by the days end. Thursday’s Bitcoin price placed the cryptocurrency’s market cap at a staggering * $189 trillion.

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Remarks Before The 2017 AICPA Conference On Current SEC And PCAOB Developments, Ryan Wolfe, Senior Associate Chief Accountant

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The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This speech expresses the author's views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.

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Cardano Foundation Selects Z/Yen For Blockchain Research Programme - Input From Cardano Blockchain Users Will Inform Research Priorities To Accelerate Potential Use Cases

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Cardano Foundation, the organisation behind leading blockchain Cardano, has selected city think-tank Z/Yen Group’s Distributed Futures practice as its partner for a research programme into blockchain applications to inform and accelerate the development of the Cardano Protocol and its new cryptocurrency, Ada.

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