Time heals many wounds – explaining the immediate and delayed effects of message sidedness

This study investigates the immediate and delayed effects of advertising messages including both positive and negative information. A two-sided message has a negative effect on message attitudes due to two mediating variables with trade-off effects: valence and balance. These two variables are also responsible for the alignment of the effect of sidedness on message attitudes and purchase intentions over time: the negative effects of two-sided messages are neutralized over time because negative information is reevaluated, improving the valence of the message. The results explain the negative effects of message sidedness that have been found in prior research and they show that a two-sided message in advertising is not necessarily inferior to a one-sided message despite unfavorable short-term effects.     

Response style corrected market segmentation for ordinal data

Survey data collected for market segmentation studies is typically ordinal in nature. As such, it is susceptible to response styles. Ignoring response styles can lead to market segments which do not differ in beliefs, but merely in how segment members use survey answer options and which possibly occur in addition to the belief segments. We propose a finite mixture model which simultaneously segments and corrects for response styles, permits heterogeneity in both beliefs and response styles, accommodates a range of different response styles, does not impose a certain relationship between the response style and belief segments, and is suitable for ordinal data. The performance of the model is tested using both artificial and empirical survey data.     

Effects of service orientation on job embeddedness in hotel industry

This research aims to develop and analyze a model that depicts work engagement (WE) as a mediator of the relationship between job embeddedness and service orientation. Specifically, the model examines external environmental factors (EEFs) as moderator of the effects of service orientation and job embeddedness in the hospitality industry. All data used for this study were gathered in Iran from hotels frontline employees with a two-weeks’ time lag. These relationships mentioned above were analyzed using AMOS 22.0. It was discovered in the results that WE was indeed a partial mediator and that EEFs indeed moderated the effects of service orientation on job embeddedness with adequate empirical support. The implications of the findings for the managers, the study limitations, and future research recommendations were also discussed.     

Survey-based forecast distributions for Euro Area growth and inflation: ensembles versus histograms

Ensemble methods can be used to construct a forecast distribution from a collection of point forecasts. They are used extensively in meteorology, but have received little direct attention in economics. In a real-time analysis of the ECB’s Survey of Professional Forecasters, we compare ensemble methods to histogram-based forecast distributions of GDP growth and inflation in the Euro Area. We find that ensembles perform very similarly to histograms, while being simpler to handle in practice. Given the wide availability of surveys that collect point forecasts but not histograms, these results suggest that ensembles deserve further investigation in economics.     

On the distribution of government bond returns: evidence from the EMU

This paper assesses the statistical distribution of daily EMU bond returns for the period 1999–2012. The normality assumption is tested and clearly rejected for all European countries and maturities. Although skewness plays a minor role in this departure from normality, it is mainly due to the excess kurtosis of bond returns. Therefore, we test the Student’s t, skewed Student’s t, and stable distribution that exhibit this feature. The financial crisis leads to a structural break in the time series. We account for this and retest the alternative distributions. A value-at-risk application underlines the importance of our findings for investors. In sum, excess kurtosis in bond returns is essential for risk management, and the stable distribution captures this feature best.     

Tourism development and economic growth: a panel Granger causality analysis in the frequency domain

In this paper, we test the causal relationship between economic growth and tourism development in the 1995–2012 period using recently developed panel Granger causality tests that allow for country-level heterogeneity, thus leading to more accurate results for the 12 Mediterranean countries. Although results of the Dumitrescu and Hurlin [(2012) testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460] panel Granger causality test show a unidirectional causality from tourism development to economic growth, results of the Croux and Reusens [(2013). Do stock prices contain predictive power for the future economic activity? A Granger causality analysis in the frequency domain. Journal of Macroeconomics, 35, 93–103] panel Granger causality analysis in the frequency domain show that there is a bidirectional temporary and permanent causality between tourism development and economic growth. The bidirectional causality relationship between tourism development and economic growth, which is the main finding of this study, suggests that in order to achieve high economic growth, policy-makers should focus on developing the tourism sector.     

Optimal versus adequate level of international reserves: evidence for Turkey

The determination of international reserve balance for emerging economies is part of the efforts to strengthen the immunity of these economies to crises. However, there is still evidence on crises even for the countries with large foreign reserves. It has usually been experienced that the countries with greatest need for reserves economize more than others on their holdings since they might underestimate the cost of crisis. In this study, the official international reserves of Turkey are tested against optimality and adequacy. During 1988–2002, the actual reserves fell short of both the optimal and the adequate levels. They are only optimal when the expected cumulative contraction is about 5.2% of real GDP under crisis. However, early evidence from emerging economies and Turkey show that crises hit more heavily. Hence, it is found that the current financial structure in Turkey such as the absence of capital controls and a highly dollarized banking system necessitates more foreign reserves for preventing any future economic and/or financial shocks.