No Permits, No Fabs: The Importance of Regulatory Reform for Semiconductor Manufacturing

Congress has advanced legislation to appropriate $52 billion in funding for the CHIPS for America Act, which aims to increase semiconductor manufacturing and supply chain resilience in the United States. But more can be done to improve the resiliency of U.S. access to microelectronics beyond manufacturing incentives. This report outlines infrastructure investments and regulatory reforms that could make the United States a more attractive place to build new chipmaking capacity and ensure continued U.S. access to key inputs for semiconductor manufacturing.

What Lies Behind Successful Regulation? A Qualitative Evaluation of Pilot Implementation of Kenya’s Health Facility Inspection Reforms

Background: Health facility regulation in low- and middle-income countries (LMICs) is generally weak, with potentially serious consequences for safety and quality. Innovative regulatory reforms were piloted in three Kenyan counties including: a Joint Health Inspection Checklist (JHIC) synthesizing requirements across multiple regulatory agencies; increased inspection frequency; allocating facilities to compliance categories which determined warnings, sanctions and/or time to re-inspection; and public display of regulatory results. The reforms substantially increased inspection scores compared with control facilities. We developed lessons for future regulatory policy from this pilot by identifying key factors that facilitated or hindered its implementation. Methods: We conducted a qualitative study to understand views and experiences of actors involved in the one-year pilot. We interviewed 77 purposively selected staff from the national, county and facility levels. Data were analyzed using the framework approach, identifying facilitating/hindering factors at the facility, inspection system, and health system levels. Results: The joint health inspections (JHIs) were generally viewed as fair, objective and transparent, which enhanced their perceived legitimacy. Interactions with inspectors were described as friendly and supportive, in contrast to the punitive culture of previous inspections when bribery had been common. Inspector training and use of an electronic checklist were strongly praised. However, practical challenges with transport, route planning and budgets highlighted the critical nature of strong logistical management. The effectiveness of inspection in improving compliance was hampered by limitations in related systems, particularly facility licensing, enforcement of closures and, in the public sector, control of funds. However, an inclusive reform development process had led to high buy-in across regulatory agencies which was key to the system’s success. Conclusion: Effective facility inspection involves more than "hardware" such as checklists, protocols and training. Cultural, relational and institutional "software" are also crucial for legitimacy, feasibility of implementation and enforceability, and should be carefully integrated into regulatory reforms.

Audit committee characteristics and bank performance: evidence from India

Purpose This study aims to investigate the impact of various audit committee (AC) characteristics on the performance of Indian commercial banks. Additionally, it also analyses the non-linear relationship of AC size and AC chairman tenure with bank performance. Design/methodology/approach A panel data approach has been used in this study. The authors have used the fixed-effect estimation technique to examine the relationship between AC characteristics and bank performance during the period 2009–2010 to 2016–2017. Findings The authors find that the professional financial education of the AC chairman and members positively affects bank performance. the frequency of the AC meetings and audit chair busyness bears an inverse relationship with performance. The findings are more or less consistent across the various bank performance measures and subsamples classified based on the time period and ownership of the banks. Practical implications This study provides insights to policy regulators and policymakers who are entrusted with the establishment of ACs in the banks in light of the ongoing regulatory reforms. Originality/value The study is among one of the early studies, which study the relationship between AC characteristics and bank performance in the light of recent regulatory reforms. It also extends the existing study by considering both public and private banks operating in India.

Annual report narrative disclosures, information asymmetry and future firm performance: evidence from Vietnam

PurposeThis paper examines the role of the annual report’s linguistic tone in predicting future firm performance in an emerging market, Vietnam.Design/methodology/approachBoth manual coding approach and the naïve Bayesian algorithm are employed to determine the annual report tone, which is then used to investigate its impact on future firm performance.FindingsThe study finds that tone can predict firm performance one year ahead. The predictability of tone is strengthened for firms that have a high degree of information asymmetry. Besides, the government’s regulatory reforms on corporate disclosures enhance the predictive ability of tone.Research limitations/implicationsThe study suggests the naïve Bayesian algorithm as a cost-efficient alternative for human coding in textual analysis. Also, information asymmetry and regulation changes should be modeled in future research on narrative disclosures.Practical implicationsThe study sends messages to both investors and policymakers in emerging markets. Investors should pay more attention to the tone of annual reports for improving the accuracy of future firm performance prediction. Policymakers should regularly revise and update regulations on qualitative disclosure to reduce information asymmetry.Originality/valueThis study enhances understanding of the annual report’s role in a non-Western country that has been under-investigated. The research also provides original evidence of the link between annual report tone and future firm performance under different information asymmetry degrees. Furthermore, this study justifies the effectiveness of the governments’ regulatory reforms on corporate disclosure in developing countries. Finally, by applying both the human coding and machine learning approach, this research contributes to the literature on textual analysis methodology.

The Impact of Regulatory Reforms on Demand Weighted Average Prices

Average prices are popularly used in the literature on price modeling. Calculating daily or weekly prices as an average over hourly or half-hourly trading periods assumes the same weight ignoring demand or traded volumes during those periods. Analyzing demand weighted average prices is important if producers may affect prices by decreasing them during low-demand periods and increasing them during high-demand periods within a day. The prediction of this price manipulation might have motivated the regulatory authority to introduce price caps not only on annual average prices but also on annual demand weighted average prices in the England and Wales wholesale electricity market. The dynamics of demand weighted average prices of electricity has been analyzed little in the literature. We show that skew generalized error distribution (SGED) is the appropriate assumption for model residuals. The estimated volatility model is used for evaluating the impact of regulatory reforms on demand weighted average prices during the complete history of the England and Wales wholesale electricity market.