Brendan Moyle

Topology of Foreign Exchange Markets using Hierarchical Structure Methods

This paper uses two common physics techniques, a minimal spanning tree and an ultrametric hierarchical tree, to extract a topological influence map for major currencies from the ultrametric distance matrix. We find that these two techniques generate a defined and robust scale free network with meaningful taxonomy, which is fundamentally different from that obtained from stock market topology. The topology is shown to be robust with respect to method, to time horizon and is stable during market crises. This topology gives a guide to determining the underlying economic or regional causal relationships for individual currencies and will prove useful to understanding the dynamics of exchange rate price determination as part of a complex network.

Brand equity and brand vulnerability: The impact of gray marketing/parallel importing on brand equity and values

Brand equity has received significant academic attention since the mid‐1990s. This has been driven partly by changes in international accounting standards as they relate to the reporting of the financial value of intangible assets. A more prominent driver concerns the impact of marketing, and of marketing communication activity in particular, on brand performance. Much of the academic debate, however, has centered on conflicting definitions of brand equity and on seeking ways of measuring or quantifying the value of equity. Attention is now turning to examining the nature of equity and of factors that may threaten it. This paper examines the potential impact of parallel importing on brand equity and provides a substantive theoretical background. The paper then reports the findings from an exploratory study involving depth interviews with New Zealand brand managers whose brands have been affected by this activity.

Species conservation and the principal-agent problem

Abstract Principal–agent problems occur in contract or management contexts. They arise out of the agents desire to imperfectly follow the principals preferences despite being under the authority of the principal. Principal–agent problems may be present in biodiversity recovery programmes. A principal–agent model is constructed where rewards and sanctions are based on the change in a species status. An optimal contract is derived but it is then argued that this contract will be impossible to implement. Principal–agent problems may impose costs to recovery programmes both in terms of lower odds of persistence and the mix of species prioritised. Three institutional devices; ecosystem management, agent selection mechanisms and attaching economic returns to the change in species status may offset some of these costs.

Conservation that’s more than skin-deep: alligator farming

Wildlife farming is a contentious conservation measure. In Louisiana alligator farming has generated significant conservation gains. This case study is used to test several assumptions employed in debates about wildlife farming. These include whether farming ‘floods’ the market to depress prices and deter poaching, whether it encourages wild harvest and whether it can compete against wild harvest. Data from over three decades is used to model harvest behaviour with OLS and SUR models. This shows strong separation between the market between farmed and wild alligator skins. Immense rises in farmed output have not caused prices to collapse, however poaching has collapsed. This highlights that farming can have important non-price effects on poaching. Assumptions that are commonly used to debate wildlife farming are not supported in this example. Such assumptions, including open-access of the wildlife, inert and exogenous wildlife managers and excluding indirect benefits of wildlife farming tend to bias policy away from farming. Using these assumptions makes it harder to identify cases where wildlife farming could assist conservation objectives.

The Raw and the Carved: Shipping Costs and Ivory Smuggling

The recent and rapid increase in elephant poaching has caused international alarm. A fixed-effects panel-data regression model was employed to identify possible causes of this upsurge. Ivory seizures were categorised as worked or raw. These categories were also divided into four weight classes ranging from under 10kg to over 1000kg. With Africa being the source of ivory and much of the poached ivory destined for Asia it was hypothesised that smugglers would respond to shipping costs. The results showed that shipping costs, especially for large shipments, were correlated to smuggling levels. Other factors include global interest rates, which motivate stockpiling by criminal organisations. Stability in Africa as measured by refugee numbers correlates to raw ivory seizures. The data describes a scenario where three forces converged to escalate poaching in the late 2000s. Raw ivory was being made increasingly available at a time from Central African range states, when criminal organisations desired larger stockpiles of tusks. The sharp decline in shopping costs gave them the means to take advantage of this.

The Ecology of Trade

Trading behavior occurs in many species but has a particularly elaborate form in humans. Trade is defined as the mutually beneficial, adaptive transfer of goods and services between organisms. Trade has a competitive element and responds to changes in relative scarcity. Trade is demonstrated to be a biological phenomenon rather than an artefact of human civilisation. Species’ characteristics that increase the likelihood of trade occurring are outlined. The evolution of trading strategies is most likely in humans and social arthropods. A formal model is presented to show that trade can simultaneously increase consumption among populations and reduce pressure on locally scarce resources. This allows a species to increase its density and escape the constraints imposed by local resource limitations. This represents a major ecological benefit to the trading species.

The bioeconomics of illegal wildlife harvesting: An outline of the issues

Abstract The biological aspects of illegal harvests of threatened wildlife are outlined. It is shown that local agriculturalists are beneficiaries of illegal harvesting and that competition from agriculture exacerbates the extinction risk. Illegal harvesting of wildlife is driven by the profitability of the exercise, but law enforcement activity can deter poaching by reducing the associated expected profits. Law enforcement may be unable to limit illegal harvesting to levels threatened populations can sustain as a result of perverse consequences or strategic responses by poachers to law enforcement activity. Poaching activity is sensitive to the beliefs of participants about future prices and the availability of wildlife. Erroneous beliefs result in price collapses being observed. Integrating legal markets with increased local control of wildlife and punitive law enforcement strategies may be the most effective and efficient means to constrain illegal harvests.

The Chinese Illegal Ivory Market: A Pilot Study

The size, logistical and political constraints of China has made it difficult to research the black-market in ivory. In situ investigations of retailers have been infrequent, with limited coverage. Some of the results are problematic. This motivated the trial of a different survey technique in 2014 in Beijing and Fuzhou. The trial employed local Chinese to identify search costs for illegal ivory in different market segments, using legal ivory as the benchmark. It was hypothesised that high-quality pieces would be much harder to find in the illegal market. Illegal factories lack access to the skilled carvers for these pieces, the registration-card system is hard to overcome, and the legal factories put most of their output into those segments. The results tentatively support this hypothesis. They were corroborated by interviews with law-enforcement which confirmed illegal sellers preferred the low-end of the market. The legal-market in these cities appears to have pushed the illegal market down to the bottom-end. Additionally, the use of search costs as a metric of illegal activity is a useful method for investigating ivory-markets like China.

The Twenty-Five Thousand Elephant Question

The recent and rapid increase in elephant poaching has caused alarm. Noting that shipping containers are the main smuggling technique and that transport costs have been overlooked to date, panel-data models are employed to test this variable’s importance. The results support that transport costs are one important driver of smuggling levels. The convergence of several risk factors including the collapse of freights costs in the wake of the Global Financial Crisis provides a plausible explanation of the recent poaching surge. Evidence currently indicates that raw ivory is being stockpiled for speculative reasons.

Dirty Laundry: Are Chinese Legal Ivory Factories Using Poached Ivory as an Input?

It has been alleged or suspected that the legal ivory factories in China launder poached ivory to make carvings. In this research the throughput of tusks across all 37 factories is analysed. The period covers the first allocation of tusks by the Chinese State Forest Administration in July 2009 up to January 2014. The number of factories is fixed, the number of carvers is stable and ivory carving is time-intensive. Diversion of carver-effort to use illegal ivory must come at the expense of legal output. If laundering is occurring it should have an appreciable effect on the rate at which legal tusks are consumed as carvings. The throughput of 1293 tusks is analysed with two modelling approaches. These were a Vector Error Correction Model (VECM) and a Seemingly Unrelated Regression (SUR) approach. Tusk throughput is affected by the size of the tusk and the experience of the carver. Factories also report tusks used up in production in batches. The models show that this reporting effect is partly explained by the Chinese retail spending cycle. No significant deviation in tusk throughput is detected. This implies that the legal factory system is largely clean of illegal ivory. The results also provide indirect evidence that the illegal ivory entering China is destined largely for a speculative market in raw ivory or for an autonomous illegal factory network.