Boom and Gloom

We study the performance of investments made at different points of an investment cycle. We use a large data set covering hotels in the United States, with rich details on their location, characteristics, and performance. We find that hotels built during hotel construction booms underperform their peers. For hotels built during local hotel construction booms, this underperformance persists for several decades. We examine possible explanations for this long‐lasting underperformance. The evidence is consistent with information‐based herding explanations.     

The response of decentralized health services to demand uncertainty and the role of political parties in the Spanish public health system

Decentralization of the public health system should lead to health resources being managed more in line with citizens’ preferences. A decentralized system is more flexible in that it can better adapt resources to local needs. Moreover, if regional political parties have responsibility for public health policies, citizens will be able to elect those parties whose positions are more in line with their preferences. However, the role of political parties in public health management has received little attention in the literature. Focusing on the decision to provide reserve service capacity to deal with demand uncertainty, we analyse whether there have been differences between central and decentralized health authorities in Spain and whether these can be explained to some extent by the way different political parties manage the trade-off between being able to cover demand and the economic costs involved. Using data on Spanish public hospitals for the period 1996–2006, we model the difference between observed and potential output using an output-oriented distance function. Reserve capacity is modelled as a function of demand uncertainty, economic costs and the political party in power. We find differences in the way resources are managed by central government and decentralized authorities, even within the same political party. We also find differences between the decentralized authorities themselves according to the political party in power. We conclude that decentralization of public health in Spain has provided regional political authorities with greater flexibility to manage reserve capacity in line with citizens’ needs and preferences.     

Impact of Customer Orientation and ICT Use on the Perceived Performance of Rural Tourism Enterprises

This article sets out to highlight the importance of adopting customer orientation and information and communications technology (ICT) in tourism service delivery if the rural tourism sector is to succeed. A model is proposed and validated which encompasses the effects of customer orientation adoption and the use of ICT on the rural tourism sector, taking into account the enterprises’ financial results, improvements to the rural destination, and the more personal, intangible impact on the owner-manager. The major contributions of this work are in finding that customer orientation adoption that contributes to ICT use, and that both ICT use and customer orientation adoption contribute to better outcomes from rural tourism activity.     

Lessons learned from Brazilian multinationals’ internationalization strategies

Internationalization of emerging market multinationals is a recent phenomenon gaining importance in the global economy. This foreign expansion of a new breed of companies has challenged established theories and practices in the field of international business (Cuervo-Cazurra, 2007). This article addresses the issue of whether or not there is something to learn from these emerging market companies and their foreign expansion. Focusing on the international trajectories of four Brazilian multinationals (i.e., Odebrecht, Embraer, Stefanini, and Marcopolo), this study analyzes their strategies and managerial processes during and after the recent economic crisis with regards to internationalization. Our qualitative fieldwork suggests that the trajectories of these Brazilian multinationals are quite unstructured and evolve as a reaction to the opportunities they face in international markets. It seems all four companies in our sample shared a strong entrepreneurial spirit and a high motivation to expand their international operations despite the crisis and the obstacles they faced. Our findings and suggestions in terms of lessons learned should provide valuable implications for multinational managers from other emerging markets by providing a better understanding of how Brazilian multinationals expand internationally, deal with economic crisis, and manage relationships with local and foreign institutions.     

Value co-creation via information and communications technology

The aims of the present work centre on determining whether co-created value constitutes a competitive advantage for firms, and whether it is capable of influencing consumer behaviour. Applying the service-dominant logic perspective, the work examines the firm's capabilities in the context of its business-to-customer (B2C) interactions, focusing on information and communications technology (ICT) as a particular driver of value co-creation. Taking this B2C perspective, ICT is measured, from the firm's point of view, and customer perceptions are analysed, using the variables ‘value co-creation’, ‘perceived value’ and ‘loyalty’. The sample consists of 100 service firms and 572 of their customers. The findings indicate that ICT capabilities have a direct effect on value co-creation, as does value co-creation on perceived value and loyalty.     

The end of risk communication as we know it

According to the US National Research Council, risk communication ought to be viewed as a dialogue among people conducted to help facilitate a more accurate understanding of risks and, related, the decisions they may make to manage them. But, in spite of this widely accepted perspective on risk communication, there is often a disconnect between how it is defined and how it is practiced. Rather than focusing on a true dialogue aimed at improving risk assessments and risk management decisions, risk communication is often viewed as means of simply educating people about existing risk assessments so that, on their own, they might make (or contribute to) better risk management decisions. More worrisome, risk communication is still often seen as a means of ‘correcting’ misconceptions about, or perceptions of, risk; in other words, risk communication is used as a vehicle for attempting to align lay perceptions with their expertly assessed severity. In this paper, I argue that risk communication must become more decision-focused if it is to meet the objectives set forth – in 1989 – by the US National Research Council.     

Industrial chemical regulation in the European Union and the United States: a comparison of REACH and the amended TSCA #

Abstract

In June 2016, after decades of debate, the U.S. Congress enacted a major revision to the Toxic Substances Control Act (TSCA) of 1976, the U.S. regulatory law applicable to industrial chemicals. It has been theorized that Europe may seek to export its stricter environmental standards under REACH to the United States. Thus, it is interesting to examine whether the environmental, health, and safety practices – including the values – found in REACH impacted the TSCA reform debate in the U.S. We chose to focus the comparison on the following issues that were central features of REACH: responsibility to develop safety data, priorities for safety assessments, definition of the safety standard, restrictions on chemical use, and preemption of regulatory activity by lower levels of government. There are three major findings. First, the U.S. did not implement the EU’s solution of putting the burden of data generation, risk assessment, and risk management on the industry. Second, REACH is more precautionary in its design than the amended TSCA. Third, the new U.S. law is generally less strict than REACH in their requirements on industry, though it is also less preemptive of lower levels of government than REACH is. Moreover, the U.S. retains a common law approach to chemical-induced injury that is more punitive of industrial errors than is European Union law. The EU’s attempt to export REACH regulation failed in the case of U.S.A., as the U.S. Congress did not reform TSCA based on the REACH model. We conclude that, although the problems identified prior to the enactment of REACH were similar to those identified in the U.S., REACH’s key principles and elements were not adopted in the U.S.     

From merchants to speakers: The common origins of trade and language

Abstract

Adam Smith argued that division of labour and language are linked to the concept of persuasion. However, this paper asserts that trade in the long term and linguistic communication have their roots in trust and probity since both imply some sort of mutuality. If not, neither one nor the other would occur as strategies in repetitive games show.     

Determinants of pension plan fees in Spain

Pension plans and funds represent a substantial part of the welfare systems in both Europe and Spain. One of the most important factors in the choice of a plan or fund is the performance it obtains. In view of the influence that fees have on performance, the objective of this study is to analyse the variables that determine the management and custodial fees of individual pension plans. The Spanish market for pension plans and funds sets legal caps on these fees, and at the same time the majority of them are commercialized and managed by financial institutions, which can in turn generate a conflict of interests. In this article, we estimate models with censured variables and our findings show how the average investment per plan, the legal status and the size of the management company to which the plan belongs, and the style of the plan are all relevant determinants of the management fee. In turn, the custodial fee is determined by the legal status of the custodial company, the size, the return and the type of plan.