GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 11 Nov 2019, 18:19

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Calling all CUHK Applicants: (2016 Intake) Class of 2018!!

  new topic post reply Update application status  
Author Message
Official Business School Representative
User avatar
Joined: 20 Dec 2011
Posts: 135
Understanding China’s Institutions and the Role of Government in the B  [#permalink]

Show Tags

New post 04 Jun 2018, 04:01
FROM CUHK: Understanding China’s Institutions and the Role of Government in the Business World
Image
Prof. Tianyu Zhang
“Institutions of a country, whether explicit or implicit, matter for its economic development. However, how the institutions shape the behavior of market participants are hard to be tracked,” explains Tianyu Zhang, Professor of School of Accountancy and Director of Centre for Institutions and Governance at The Chinese University of Hong Kong (CUHK) Business School.

For the purpose of his research entitled “Does Institutional Knowledge Drive the Information wedge in Emerging Markets? Evidence from Analysts of Local and Foreign Brokerage Firms in China,” Prof. Zhang and his collaborators have developed a mega political data platform by collecting a huge amount of data from the Chinese media and social network, as well as close to 200,000 analyst reports and annual reports from Chinese firms. This allows his research to understand the role of institutional knowledge in enhancing the information advantage of local financial analysts in China.

Institutions are important to a country’s development. A lot of people in China know this: To succeed in China, entrepreneurs need to understand and cooperate with politics.

Using an advanced computer program, the data is generated and categorised into two broad topics: political (e.g. government’s economic planning) and financial (e.g. profit and loss).

Through running textual analysis on this data, he then compares the performances between foreign firms and local firms in China and found that local analysts have better understanding of the political landscape over foreign firms, and this information advantage have allowed them to perform better in market forecasts.

“These local analysts put more effort in covering the firms from a political perspective are shown to exhibit significantly higher forecast accuracy over the earnings of their target firms,” he says, commenting that this kind of political information is very unique and costly to acquire.

“How well do you know the politicians? How do you interpret their behaviour? This knowledge is more likely to be obtained through private networks and based on real connections – you need to know someone and also who has influence in which policy,” he adds.

Cultural and communication barriers also make it harder for foreign analysts to gain the same level same level of trust, and that’s why Prof. Zhang believes that “politicians have more trust in local analysts than in foreign analysts.”

His textual analysis enables him to further gain insights into the “political communities” or “factions’ with which firms are affiliated, and reveal evidence showing how coordination or competition among politicians under the Chinese political hierarchy has spilled over to the affiliated firms.

CUHK Business School Alumnus Mr. Albert Ng, Chairman, China and Managing Partner, Greater China of EY, holds a similar view that the role of government and its policies are crucial to businesses in any economy, not just in China. “When talking about China, some people still have certain stereotypes: China is mysterious and there’d be a higher chance of corruption and irregularities [as compared to other countries], but what I’d like to emphasis is that government policies are important for companies doing business in any country, and in particular, in China,” Mr. Ng stressed.

Image
Mr. Albert Ng (BBA in Accounting 1981, MBA 1988)
For example, the fast and successful developments of Shenzhen and Pudong of Shanghai are outcomes of the far-sighted government policies. Mr. Ng further points out the importance of keeping abreast of policy changes. Companies have to be aware of the changes, so that they can plan for their businesses in the years to come.

In terms of some important changes in China’s economic strategies, Mr. Ng shared that the country’s growth model has shifted from focusing on speed in the past to focusing on sustainability and quality. What’s more, China eased restrictions and simplified procedures for foreign investments and outbound investments have also entered an adjustment period.

In light of this, Mr. Ng suggested that companies should adapt to policy changes and seize new opportunities brought by these changes.

To manage the impact of the ever-changing political and policy changes, we should always keep an open, and rational mind, and maintain a friendly and long-term relationship with the government.

For Hong Kong, he emphasised on the current significant government’s initiatives such as the Belt and Road initiative and the Greater Bay Area development, and suggested companies should look into ways to collaborate and create synergy within the region.

“Institutions of a country, whether explicit or implicit, matter for its economic development. However, how the institutions shape the behavior of market participants are hard to be tracked,” said Prof. Zhang Tianyu, Professor of School of Accountancy and Director of Centre for Institutions and Governance at the CUHK Business School, during the fifth talk of China Business Knowledge @ CUHK Luncheon Series on April 19, 2018.

The is a post-event report of the fifth talk of China Business Knowledge @ CUHK Luncheon Series held on 19 April 2018 by CUHK Business School. Themed “Understanding China’s Institutions and the Role of Government in the Business World,” Prof. Tianyu Zhang shared in the talk his recent research on the role of institutional knowledge in enhancing the information advantage of local financial analysts in China.

To find out more about Prof. Zhang’s research, please click here to read the feature article “Local Knowledge Pays Off for Analysts in China” published on China Business Knowledge.

The post Understanding China’s Institutions and the Role of Government in the Business World appeared first on CUHK Business School.
ForumBlogs - GMAT Club’s latest feature blends timely Blog entries with forum discussions. Now GMAT Club Forums incorporate all relevant information from Student, Admissions blogs, Twitter, and other sources in one place. You no longer have to check and follow dozens of blogs, just subscribe to the relevant topics and forums on GMAT club or follow the posters and you will get email notifications when something new is posted. Add your blog to the list! and be featured to over 300,000 unique monthly visitors

_________________
========================
CUHK MBA Program, The Chinese University of Hong Kong
Official Business School Representative
User avatar
Joined: 20 Dec 2011
Posts: 135
Changing the World, One Firm at a Time  [#permalink]

Show Tags

New post 05 Jun 2018, 20:01
FROM CUHK: Changing the World, One Firm at a Time
Being a private equity investor, Kelvin Wu is the founder and principal partner of AID Partners Capital Ltd (AID). The business of private equity funds, simply put, is buying or investing in non-listed companies with a view to reselling them at a good price. Kelvin’s most celebrated feat was the acquisition of HMV’s businesses in Hong Kong and Singapore in 2013. Already teetering on the brink of bankruptcy then, the century-old music chain was brought back to life.

At a time when most people were not hopeful of a bright future for the music industry, why did he have such foresight? “I didn’t have the foresight, nor was I optimistic about the future of the music industry,” with sideburns and beard and wearing an indigo suit and a pair of zebra-striped trainers, he responded humorously. “I was only bullish about the strong brand of HMV and its wide customer base, seeing lots of room for manoeuvre.” Afterwards HMV went on to undergo a transformation with its product lines expanded from CDs and DVDs to cover audio and visual equipment, toys and vinyl records, and eventually food and beverages. The chain’s valuation rocketed by almost tenfold in four to five years.

For Kelvin, a project does not have to be making money at the time of acquisition. The target he sets himself is to turn profitable within 24 months after the takeover. The secret of success lies in the axiom ‘no pain, no gain’. “Most private equity funds would take a totally hands-off approach after buying a company, just looking to make a quick buck by the price difference in purchasing and selling. AID, on the contrary, would get deeply involved in the company’s operation and management.” Take HMV for example, AID set about streamlining its structure, reducing the number of back office staff from over 40 to just six. “Lu Xun said he would write while others spent time drinking coffee. I use the time to learn and work while others hobnob over drinks.”

Image
Kelvin Wu’s most celebrated feat was the acquisition of HMV and bringing the century-old music chain back to life (courtesy of the interviewee)
His company has also invested in Legendary Pictures, the film company which produced The Dark Knight Trilogy, Inception, and Interstellar. Notwithstanding box office success being an invariably welcome boon to investors, Kelvin said what he valued the most in a film was the philosophy or life-affirming message it conveyed. “I was particularly happy with Interstellar, a sci-fi film steeped in Buddhist philosophy. So very theosophical. The traditional Chinese view of literature is that it should spread the Way. I think films should do the same too,” he said, stroking the beige malas on his wrist.

Entertainment business aside, AID has also invested heavily in tech companies. In addition to Zoox, which develops driverless-car technology to address traffic congestion in big cities, these companies include Dave.com, a fintech company which saves people from overdrafts and unnecessary bank fees during tough financial times, and the Initial Coin Offering (ICO) of Telegram, an instant-messaging app which announced the launch of its own cryptocurrency at the beginning of the year.

Kelvin remarked that his company had recently forayed into health tech and was planning to devote 70% of its manpower and capital to the field. But why put all the eggs in one basket? “In sci-fi films, the arch-villain is usually a pharmaceutical or genetics company. If we don’t get prepared in time and steer the health industry on the right path, the age of evil pharmaceutical companies taking over the world will come sooner than we think.”

“I founded my companies with the mission to make the world a better place. Making money is just a by-product,” he said in all seriousness.

Image
Kelvin Wu: “The traditional Chinese view of literature is that it should spread the Way. I think films should do the same too.”
Last year, AID acquired GeneSort, an Israeli company that focused on cancer diagnostic and treatment solutions. Only a small amount of cells and tissues are required for diagnosis, and target therapy drugs will help spare patients the pain of radiotherapy and chemotherapy. In a few months GeneSort will join hands with an international insurance company to launch a blood biopsy for detecting early cancers. “In future, getting cancer will be like catching cold. Once the early symptoms have been diagnosed, cancer can be cured with just the right mix of drugs. This will be the way forward for health care.”

Intarcia is another health-tech company in which AID has invested. This US company is most famous for its matchstick-sized osmotic mini-pump placed just under a diabetic’s skin to administer the medication on a daily basis. Patients will no longer need to worry if they fail to take their medications or get their injections on time.

On his recipe for success in private equity investing, Kelvin responded with his signature humour, “Of course, you’ve got to have money above all else.” With a changed tone, he added, “But, more importantly, you’ve got to have a keen sense of curiosity about the world and a heartfelt desire to change it.”

He attributed the origin of such a world view to his days as a business administration student at CUHK: “CUHK has given me three treasures: freedom, general education, and minors. The atmosphere of freedom on campus gave wings to my mind. General education whetted my appetite for literature, history, and philosophy. The minor programmes in Japanese and French honed my language skills, which have proven a great asset for me to do business around the world.” With a plan to relocate to South Korea for half a year, he is determined to master the Korean language to facilitate his identifying local health-tech projects for investment. Catching sight of the horizontal scroll on the wall featuring calligraphy by the late Prof. Jao Tsung-I, this author finally came to see the point of the inscription: “Providence rewards diligence”.

Image
Kelvin Wu: “CUHK has given me three treasures: freedom, general education, and minors.”

Reported by Christine N., ISO

Photos by Eric Sin

This article first appeared in CUHK Website, republished with permission from Information Services Office, CUHK.

The post Changing the World, One Firm at a Time appeared first on CUHK Business School.
ForumBlogs - GMAT Club’s latest feature blends timely Blog entries with forum discussions. Now GMAT Club Forums incorporate all relevant information from Student, Admissions blogs, Twitter, and other sources in one place. You no longer have to check and follow dozens of blogs, just subscribe to the relevant topics and forums on GMAT club or follow the posters and you will get email notifications when something new is posted. Add your blog to the list! and be featured to over 300,000 unique monthly visitors

_________________
========================
CUHK MBA Program, The Chinese University of Hong Kong
GMAT Club Bot
Changing the World, One Firm at a Time   [#permalink] 05 Jun 2018, 20:01

Go to page   Previous    1   2   [ 22 posts ] 

Display posts from previous: Sort by

Calling all CUHK Applicants: (2016 Intake) Class of 2018!!

  new topic post reply Update application status  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne