Further insights on the puzzle of technical analysis profitability

This paper extends current results concerning technical analysis efficiency on the foreign exchange market and attempts to determine whether filtering the raw exchange rate series with some trading rule significantly changes its characteristics. Because of the non-normality of exchange rate series, bootstrap methods are used on the main daily exchange rates since 1974 to show technical analysis performance. The technical analysis strategy tested generates returns whose distribution is significantly different from the basic series. The robustness of the results is tested in and out-of-sample and an explanation of the technical analysis performance based on its filtering properties is suggested.     

Amazon's evolving ecosystem: A cyber-bookstore and Application Service Provider

Amazon.com has been through several stages of development: first as a cyber-bookstore, then a cyber-market, and now an Application Service Provider (ASP). I apply the concept of “business ecosystem” to describe the evolution of Amazon.com, and highlight the role of web services in the shaping of its ecosystem. The company plays a central role in the ecosystem, working with a network of partners to bring products and services to customers. By continually trying to improve the health of its ecosystem, Amazon ensures its own survival and prosperity. The mechanisms through which Amazon has created its ecosystem are discussed and ideas for firms looking to create analogous business communities are advanced. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Testing Mundell's Intuition of Endogenous OCA Theory*

This paper presents an empirical assessment of the endogenous optimum currency area theory. Frankel and Rose (1998 ) study the endogeneity of a currency union through the lens of international trade flows. Our study extends Frankel and Rose's model by using FDI flows to test the original theory developed by Mundell in 1973. A gravity model is used to empirically assess the effectiveness of the convergence criteria by examining location‐specific advantages that guide multinational investment within the European Union. A fixed effects model based on a panel data of foreign direct investment (FDI) flows within the EU‐15 shows that horizontal investment promotes the diffusion of the production process across the national border. Specifically, our results suggest that economic convergence ensured by belonging to the common currency area helps double FDI flows.     

EMU: Optimal Fiscal Strategy and the Punishment Effectiveness

This paper investigates the ability of the Stability and Growth Pact to prevent governments in the "euro zone" from running excessive budget deficits. It is shown that in a static two-country game, the Pareto-optimal strategy of no excess deficits cannot be systematically enforced, whatever the toughness of the sanction under the Pact. However, in a multiperiod setting, the Pareto-optimal configuration of no excess deficits would prevail even if no sanctions were applied to deviant governments. In this case, neither a heavily punitive SGP, nor a centralized budget appears to be helpful in the EMU context.     

Optimal domestic regulation under asymmetric information and international trade: a simple general equilibrium approach

We investigate the design of domestic incentive regulations in a small economy opened to trade and its implications for international specialization and for trade openness to remain welfare‐improving. More specifically, we append to an otherwise standard 2 × 2 Heckscher‐Ohlin model of a small open economy a continuum of intermediate sectors producing nontradable goods used in tradable sectors. Those goods are produced by privately informed regulated firms. Asymmetric information induces distortions with general equilibrium impacts. The small economy becomes relatively richer in the informationally sensitive factor so that asymmetric information might reverse trade patterns. Free trade is Pareto‐dominated by autarky when it exacerbates agency distortions.     

Are Older Workers Harmful for Firm Productivity?

This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16–29 years), middle-aged (30–49 years) and older (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer–employee data, we find that young workers are significantly more productive than older workers. Yet, results also show that age structure effects on productivity: (i) have substantially decreased over time and (ii) are much stronger in ICT than in non-ICT firms.     

When NGOs go global: Competition on international markets for development donations

Why are many large non-governmental organizations (NGOs) becoming multinational entities? What are the welfare implications of this integration of markets for development donations? To answer these questions, we build a simple two-country model with horizontally differentiated NGOs competing in fundraising. We find that NGOs become multinational if the economies of scale in fundraising are sufficiently large. In that case, national NGOs in the smaller country disappear, while some national NGOs remain in the larger country only if country sizes are sufficiently different. Social welfare is higher in the regime with multinationals than under autarky.     

Separability and aggregation of equivalence relations

We provide axiomatic characterizations of two natural families of rules for aggregating equivalence relations: the family of join aggregators and the family of meet aggregators. The central conditions in these characterizations are two separability axioms. Disjunctive separability, neutrality, and unanimity characterize the family of join aggregators. On the other hand, conjunctive separability and unanimity characterize the family of meet aggregators. We show another characterization of the family of meet aggregators using conjunctive separability and two Pareto axioms, Pareto⁺ and Pareto^?. If we drop Pareto^?, then conjunctive separability and Pareto⁺ characterize the family of meet aggregators along with a trivial aggregator.     

Stock market dynamics in a regime-switching asymmetric power GARCH model

This paper analyzes the dynamics of Asian stock index returns through a Regime-Switching Asymmetric Power GARCH model (RS-APGARCH). The model confirms some stylized facts already discussed in former studies but also highlights interesting new characteristics of stock market returns and volatilities. Mainly, it improves the traditional regime-switching GARCH models by including an asymmetric response to news and, above all, by allowing the power transformations of the heteroskedasticity equations to be estimated directly from the data. Several mixture models are compared where a first-order Markov process governs the switching between regimes.