Level-ARCH short rate models with regime switching: Bivariate modeling of US and European short rates

This paper introduces regime switching into level-ARCH models for the short rates of the US, the UK, and Germany. Once regime switching and level effects are included there are no gains from including ARCH effects. It is of secondary importance how the regime switching is specified. The estimated level parameters differ across countries. The corresponding new bivariate models show that the states of the US and UK short rate volatilities are not independent nor identical. There is Granger causality from the US to the UK short rate volatility state but not vice versa. There is no contagion between the US and UK volatility states. Equivalent results apply to the relation between the US and German volatility states.     

Atrial septal aneurysm

As we begin to see more echocardiograms in the medical records that are available to us, we are faced with assessing some findings that leave us with questions about their significance. One such finding is the atrial septal aneurysm (ASA).     

Does experience imply learning?

Research summary : Research traditionally uses experiential learning arguments to explain the existence of a positive relationship between repetition of an activity and performance. We propose an additional interpretation of this relationship in the context of discrete corporate development activities. We argue that firms choose to repeat successful activities, thereby accumulating high experience with them. Data on 437 aircraft projects introduced through three governance modes show that the positive performance effect of the firm's experience with the focal mode becomes insignificant after accounting for experience endogeneity. We suggest that in a general case, experience with corporate development activities may be tinged with both learning and selection effects. Therefore, omitting to account for experience endogeneity may lead to incorrect conclusions from an “empirically observed” positive experience–performance relationship. Managerial summary : This paper emphasizes that firms generally choose to undertake the corporate development activities (new product introductions, diversification moves, international expansions, alliances, acquisitions, etc.) with which they have been the most successful in the past and that they expect to be the most successful in the future. Hence, if a firm possesses certain capabilities, it will repeatedly engage in certain activities corresponding to those capabilities, thereby simultaneously achieving high levels of activity experience as well as superior activity performance. This view suggests that an “empirically observed” positive experience–performance relationship may not be due solely to learning‐based enhanced capabilities but may also be driven by astute self‐selection. Overall, we provide a new interpretation of the relationship between experience and performance in the context of infrequent, heterogeneous, and causally‐ambiguous corporate development activities. Copyright © 2015 John Wiley & Sons, Ltd.     

Extreme coexceedances in new EU member states’ stock markets

We analyze the financial integration of the new European Union (EU) member states’ stock markets using the negative (positive) coexceedance variable that counts the number of large negative (large positive) returns on a given day across the countries. A similar analysis is performed for the old EU countries. We use a multinomial logit model to investigate how persistence, asset classes, and volatility are related to the coexceedance variables. We find that the effects differ (a) between negative and positive coexceedance variables (b) between old and new EU member states, and (c) before and after the EU enlargement in 2004, suggesting a closer connection of new EU stock markets to those in Western Europe.     

An Empirical Analysis of Tenant Selection Under Federal Rent Supplement Programs: A First Step

The purpose of this study is to consider the question of whether characteristics of applicants for federally subsidized housing can be used in predicting whether one is accepted or rejected by management as a tenant. Using probit analysis, a statistical model was developed for use in assisting management in objectively screening applicants. Factors found significant in determining the probability of acceptance or rejection were credit ratings, character references, length of time employed, and student status. The percent of rent subsidized by government and sex of household head had little effect on applicant acceptance. Although a meaningful model for estimating the probability of eviction could not be developed, low eviction rates resulting from the tenant selection model suggest that it may serve as a reasonable proxy.     

Evaluating the potential of agent-based modelling to capture consumer grocery retail store choice behaviours

Evolving consumer behaviours with regards to store and channel choice, shopping frequency, shopping mission and spending heighten the need for robust spatial modelling tools for use within retail analytics. In this paper, we report on collaboration with a major UK grocery retailer to assess the feasibility of modelling consumer store choice behaviours at the level of the individual consumer. We benefit from very rare access to our collaborating retailers’ customer data which we use to develop a proof-of-concept agent-based model (ABM). Utilising our collaborating retailers’ loyalty card database, we extract key consumer behaviours in relation to shopping frequency, mission, store choice and spending. We build these observed behaviours into our ABM, based on a simplified urban environment, calibrated and validated against observed consumer data. Our ABM is able to capture key spatiotemporal drivers of consumer store choice behaviour at the individual level. Our findings could afford new opportunities for spatial modelling within the retail sector, enabling the complexity of consumer behaviours to be captured and simulated within a novel modelling framework. We reflect on further model development required for use in a commercial context for location-based decision-making.     

An experimental investigation of the effect of TV cooking show consumption on children's food choice behaviour

For several decades, television consumption has been crucial in the complex web of factors underlying the obesity epidemic. It has been suggested that if television cooking shows would endorse healthy eating styles, they may have positive effects on consumers’ eating habits. This study empirically investigated the consequences of exposing children (N = 85, aged 9–12 years) to an existing television cooking show episode endorsing the consumption of fruits and vegetables compared with exposure to a non‐food‐related science show. The measures included pre‐test and post‐test attitudes toward health/nutrition and fruits/vegetables, as well as state preferences for a list of healthy and unhealthy foods. At the end of the study, children were separately given the choice between a popular cookie and a piece of fruit as a reward; this was used as a behavioural measure. The results of a logistic regression on the behavioural choice measure showed that the mere exposure to one episode of the television cooking show significantly increased the odds that the children would choose a piece of fruit over a cookie. Repeated‐measures analyses showed that watching this single episode also decreased children's state appetite for unhealthy foods. State appetites for healthy foods and attitudes toward health/nutrition or fruits/vegetables did not change after watching the television cooking show episode. In sum, existing television cooking shows that endorse healthy eating positively influence children's food consumption in the short term and may have the potential to be used as platforms for nutrition education.     

Bringing Balance to the Force? A Comparative Analysis of Institutionalisation Processes in the G20’s Mutual Assessment Process and the EU’s Macroeconomic Imbalances Procedure

Events from 2008 onwards have bought the old consensus on the sound money and finance paradigm (the ‘Great Moderation’) into bold relief. One manifestation of this crisis of belief is the increased focus on global imbalances, institutionally reflected in the creation of the Mutual Assessment Process (MAP) at the G20 level and subsequently the Macroeconomic Imbalances Procedure (MIP) at the European Union (EU) level. Comparing both newcomers to international macroeconomic policy coordination, this article analyses four features that shape (and we show, institutionalise) the process of paradigm contestation: presence, position, promotion and plausibility. We argue that although initially the G20’s MAP scored higher in terms of presence, position and promotion, it is the EU’s MIP, which heralds a more substantial shift in macroeconomic management. Collectively, both indicate the increased prominence of global imbalances as the subject of inter- or supranational management, and a broadening of the notion of necessary or legitimate economic governance.     

Children's Opportunities in Germany – An Application Using Multidimensional Measures

Single parents and unmarried couples are increasingly replacing the traditional nuclear family. This paper investigates if the greater variety in living arrangements contributes to increased resource disparities among children in Germany. Children in single parent families are disadvantaged in at least three dimensions decisive for their later achievements: material standard of living, parental education, and parental childcare time. We compute multidimensional inequality and poverty indices using SOEP data from 1991 to 2012. We distinguish between parental and publicly provided childcare, which is an increasingly important in‐kind benefit in Germany. We find that both multidimensional inequality and poverty declined as expanded public childcare strongly reduces resource disparities among children.     

Perceptions of the ethicality of favors at work in Asia: An 11-society assessment

We explore macro-level factors that shape perceptions of the ethicality of favors in Asian workplaces using the subordinate influence ethics (SIE) measure. We also expand and use the crossvergence model to examine the cross-level relationship between socio-cultural (i.e., traditional/secular; survival/self-expression; in-group favoritism) and business ideology influences (i.e., human development level, control of corruption) on perceptions of favor-seeking at work. This study examines the perceptions of a total of 4,325 managers and professionals in a diverse set of 11 Asian societies: China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Our investigation focuses on both the “softer” (image management) and “harder” (self-serving) sides of subordinate influence attempts to seek favors, as well as the degree of ethical differentiation across these societies. Key results based on hierarchical linear modeling (HLM) suggest that both the World Value Survey’s socio-cultural values as well as in-group favoritism contribute to our understanding of influence behaviors in Asia. Likewise, level of human development and control of corruption also appear to be promising predictors of influence ethics. In sum, our results suggest that widening the scope of the crossvergence conceptualization of socio-cultural and business ideology influences engender a better understanding of differences in attitudes toward subordinate use of favoritism across Asian societies.