INSIDER TRADING,REGULATION, AND THE COMPONENTS OF THE BID–ASK SPREAD

In this article we investigate the relation between insider trading regulations and the bid–ask spread. We decompose the spread into its components before and after the enactment of strict new insider trading rules in New Zealand. We find that the enactment led to a significant decrease in the information asymmetry component of the spread, which is observed mainly in illiquid and high prechange information asymmetry companies. These findings are robust to model specification. In addition, we find a decrease in the contribution of information asymmetry to price volatility.     

Concatenate coordination and mutual coordination

We tell of the evolving meaning of the term coordination as used by economists. The paper is based on systematic electronic searches (on “coord,” etc.) of major works and leading journals. The term coordination first emerged in professional economics around 1880, to describe the directed productive concatenation of factors or activities within a firm. Also, transportation economists used the term to describe the concatenation of routes and trips of a transportation system. These usages represent what we term concatenate coordination. The next major development came in the 1930s from several LSE economists (Hayek, Plant, Hutt, and Coase), who extended that concept beyond the eye of any actual coordinator. That is, they wrote of the concatenate coordination of a system of polycentric or spontaneous activities. These various applications of concatenate coordination prevailed until the next major development, namely, Thomas Schelling and game models. Here coordination referred to a mutual meshing of actions. Game theorists developed crisp ideas of coordination games (like “battle of the sexes”), coordination equilibria, convention, and path dependence. This “coordination” was not a refashioning, but rather a distinct concept, one we distinguish as mutual coordination. As game models became more familiar to economists, it was mutual coordination that economists increasingly had in mind when they spoke of “coordination.” Economists switched, so to speak, to a new semantic equilibrium. Now, mutual coordination overshadows the older notion of concatenate coordination. The two senses of coordination are conceptually distinct and correspond neatly to the two dictionary definitions of the verb to coordinate. Both are crucial to economics. We suggest that distinguishing between the two senses can help to clarify “coordination” talk. Also, compared to talk of “efficiency” and “optimality,” concatenate coordination allows for a richer, more humanistic, and more openly aesthetic discussion of social affairs. The narrative is backed up by Excel worksheets that report on systematic content searches of the writings of economics using the worldwide web and, using JSTOR, of Quarterly Journal of Economics, Economic Journal, Journal of Political Economy, American Economic Review, and Economica.     

Strategic Project Leadership ® Toward a strategic approach to project management

Strategic Project Leadership ^® (SPL) is a new approach to project management that is focusing projects on creating competitive advantage and winning in the marketplace. This approach is particularly relevant to strategic projects that are initiated to create the company's future, including almost all R&D projects. In the traditional approach, project managers and teams were typically focused on getting the job done, and meeting time and budget goals. SPL , provides a modern view. It suggests that projects are initiated for business reasons, and that just 'getting the job done' is not enough. This paper presents a mindset, a framework, and a practical, step-by-step approach on how to connect project management to business results and how to turn projects into powerful competitive weapons. The paper is based on extensive case research, of which we present six cases – three successes and three disappointments – to demonstrate the value of the SPL approach to project management.¹     

Markov-switching model selection using Kullback–Leibler divergence

In Markov-switching regression models, we use Kullback–Leibler (KL) divergence between the true and candidate models to select the number of states and variables simultaneously. Specifically, we derive a new information criterion, Markov switching criterion (MSC), which is an estimate of KL divergence. MSC imposes an appropriate penalty to mitigate the over-retention of states in the Markov chain, and it performs well in Monte Carlo studies with single and multiple states, small and large samples, and low and high noise. We illustrate the usefulness of MSC via applications to the U.S. business cycle and to media advertising.     

Ethnodomination in the channels of distribution of third world nations

Ethnodomination refers to the predominance of a particular ethnic group in a channel of distribution. While ethnodomination has been virtually ignored in the marketing literature, it is a fact of life in many third world marketing systems. Overseas Chinese dominate the trade of rice and pineapples in the Philippines, Hindu Sikhs dominate the trade of cloth in Afghanistan, the Otavalo Indians dominate the trade of handwoven textiles in Ecuador, and so on. International marketers need to be aware of ethnodomination for several reasons. First, ethnic marketers can offer costeffective communication and distribution skills for use in cooperative marketing programs. In return, international marketers can ofter them access to marketing management information systems and alternative sources of finance. Also, ethnic marketers are often subject to political and legal harassment which may make them more risky partners. Finally, they may have cultural practices that are quite different from the cultural practices of the rest of their host country.     

Earnings Predictability,Bond Ratings,and Bond Yields

We examine the role that earnings predictability plays in establishing a firm’s cost of debt capital by measuring its influence on establishing a new issue’s bond rating. In addition, we also examine the effects of earnings predictability on the initial pricing of the firm’s debt. Using new corporate bond issues from the period 1990–2000, our results indicate that the degree of predictability of a firm’s earnings is positively associated with a firm’s bond rating. Moreover, earnings predictability is also documented to be negatively associated with the offering yield. Importantly, bond rating classification accuracy is improved when specific measures of a firm’s earnings predictability are added to a robust model.JEL Classification:     

Two Nested Constant-Elasticity-of-Substitution Models of Recreational Participation and Site Choice: An "Alternatives" Model and an "Expenditures" Model

Two demand models of recreational participation and site choice are developed: an alternatives model and an expenditures model. Both assume maximization of utility over the year, so allow for diminishing marginal utility. They do not impose the restrictive assumption that where one goes on a trip is independent of where one plans to go on other occasions. Estimation is with a nested constant-elasticity-of-substitution preference ordering: it is relatively easy to estimate because of global regularity, it allows sites to be complements, and it has the potential to be locally flexible. The application is to Atlantic salmon fishing.     

The Perfect Little Bump: Does the Media Portrayal of Pregnant Celebrities Influence Prenatal Attachment?

This study proposes and tests a theoretical model that analyzes celebrity pregnancy attraction and its ultimate influence over prenatal attachment within pregnant women. In particular, interest in pregnant celebrities and a high concern for physical appearance are examined for their relationship to weight concern and body image, and then leading on to prenatal attachment. The conceptual model presented was tested using structural equation modeling in a sample of 478 pregnant women. All hypotheses proposed were found to be significant. Results suggest that a high pregnant celebrity attraction, in combination with other factors, can lead to a reduced level of prenatal attachment. The study contributes further to knowledge of the influence of celebrities over consumer body image and healthy psychological adaptation in the important context of pregnancy.