Disentangling types of liquidity and testing limits-to-arbitrage theories in the CDS–bond basis

We disentangle asset-specific, market, and funding liquidity in the CDS–bond basis outside and during the 2007–9 global financial crisis. Our findings stress the importance of separating different types of liquidity, since all three measures have independently negative impacts on the basis. Funding liquidity emerges as the economically most important liquidity metric. While asset-specific liquidity is cross-correlated in both the cash and derivative markets, funding and market liquidity only matter for the cash market. We exploit the decomposition of the basis to test predictions of limits-to-arbitrage theories. We find strong evidence in favor of margin-based asset pricing and flight-to-quality effects.     

The importance of career goal in relation to academic performance: a case study of hospitality management students

ABSTRACT

Hospitality management programs have commonly offered exclusive learning opportunities to talented students in order to keep “brains” in the industry. While academic performance indices are often used to identify “brains” in the education sector, scant research has empirically examined whether “brains” are intended to stay in the industry. This study surveyed 304 hospitality management students and examined the relationships between their career-goal related factors and academic performance. Findings indicate that career goal and positive job valence toward the hospitality industry are significantly related to academic performance. The results of this study contribute to the limited literature on the relationship between career goal and academic performance.     

The power of the pen: Handwritten fonts promote haptic engagement

Consumers are increasingly bombarded with merchandise and offers, making clear the need for visually distinctive and sensorially engaging product packaging design. The current research demonstrates that the use of handwritten fonts on product packaging elicits an approach tendency and enhances haptic engagement, which influences product evaluation and choice likelihood. A pilot study quantifies the use of handwritten fonts in four grocery product categories to establish that the study of handwritten fonts as a packaging design element is a worthy one with managerial significance. Four experiments are then presented. Studies 1 and 2 use real products to show that a product label with a handwritten (vs. typewritten) font elicits haptic engagement and, enhanced product evaluations (Study 2). Study 3 identifies a boundary condition such that the focal effect is observed only for benign (safe and enjoyable) product categories, but not for risky (unsafe and dangerous) ones. Study 4 relies on a simulated store setup with actual products to illustrate the differential preference for products with a handwritten (vs. typewritten) font when choosing between brands in a benign (vs. risky) product category.     

In Search of the Transmission Mechanism of Fiscal Policy in the Euro Area

This paper applies the DSGE‐VAR methodology to assess the size of fiscal multipliers in the data and the relative contributions of two transmission mechanisms of government spending shocks, namely hand‐to‐mouth consumers and Edgeworth complementarity. Econometric experiments show that a DSGE model with Edgeworth complementarity is a better representation of the transmission mechanism of fiscal policy as it yields dynamic responses close to those obtained with the flexible DSGE‐VAR model (i.e. an impact output multiplier larger than one and a crowding‐in of private consumption). The estimated share of hand‐to‐mouth consumers is too small to replicate the positive response of private consumption. Copyright © 2016 John Wiley & Sons, Ltd.     

Inter-firm collaboration in new product development in Chinese pharmaceutical companies

High-tech firms increasingly rely on inter-firm collaboration (IFC) in new product development (NPD). While there is a growing research interest in exploring the economic rationale of IFC through the transaction cost economics (TCE) and the resource synergy of IFC through the resource-based view of the firm (RBV), little attention has been given to the institution-based view (IBV) that also has important implications for firms’ choice of IFC. In particular, how national institutional environment affects IFC in the NPD process remains under-researched. This study aims to contribute to the literature by extending our understanding of the role of IFC in firms’ NPD process, taking into account transactional, resource, and institutional factors. Based on a case study of two firms: a state-owned and a private pharmaceutical firm in China, our research identifies three key forms of IFC, which are dynamic at different stages of NPD and contingent upon an array of institutional, resource, and transactional rationales underpinning firms’ choice of different forms of IFC. Our study is the first one that investigates the role of IFC in the NPD process bringing together the IBV, RBV, and TCE perspectives.