The impact of the SARS outbreak on Taiwanese hotel stock performance: An event-study approach

The severe acute respiratory syndrome (SARS) outbreak in 2003 weakened the Taiwanese economy. The tourism industry suffered the most, experiencing the highest stock price decline (approximately 29 percent) within a month of the SARS outbreak. This research examined the effect of the SARS epidemic on Taiwanese hotel stock price movements using an event-study approach. Seven publicly traded hotel companies experienced steep declines in earnings and stock price during the SARS outbreak period. On and after the day of the SARS outbreak, Taiwanese hotel stocks showed significantly negative cumulative mean abnormal returns, indicating a significant impact of the SARS outbreak on hotel stock performance. Empirical findings could be used to prepare businesses for the similar epidemics, such as a deadly bird-flu epidemic.     

Antecedents and consequences of relationship quality in hotel industry

This study investigated the antecedents and consequences of relationship quality. This study will help hotel managers to develop and implement effective relationship marketing strategies. Effective usage of relationship marketing strategies will be able to improve hotel performance such as share of purchases, relationship continuity, and word of mouth. To analyze data collected from 12 five-star hotels in Seoul, the linear structural relationship (LISREL) model was used to identify structural characteristics of relationship management between service providers and guests. The empirical results of this study were threefold. First, greater service providers’ relational and customer orientation resulted in higher relationship quality. Second, better service providers’ attributes resulted in higher relationship quality. Third, higher relationship quality resulted in higher share of purchases and better relationship continuity and share of purchases.     

The Puzzle of Persistently Negative Interest‐Rate–Growth Differentials: Financial Repression or Income Catch‐Up?

The interest‐rate–growth differential (IRGD) plays a critical role in determining the sustainability of government debt. Yet it is striking that IRGDs are correlated with income levels, and are generally negative in emerging and developing economies, which contradicts standard economic theory. Negative IRGDs constitute a powerful debt‐stabilising force, driving down debt ratios or keeping them stable even in the presence of persistent primary deficits. Motivated by the puzzling facts, this paper examines the IRGDs for a large panel of advanced and non‐advanced economies by utilising a newly assembled data set. The evidence shows that large negative IRGDs in emerging and developing economies are largely due to real interest rates well below market equilibrium – stemming from financial repression and captive and distorted markets – whereas the income catch‐up process plays a relatively modest role. Therefore, the IRGD in non‐advanced economies is likely to rise with financial market development and financial global integration, perhaps even before their GDP per capita converges to advanced‐economy levels.     

Analyst Optimism and Incentives under Market Uncertainty

We examine how analysts’ changing incentives driven by changes in market uncertainty affect their forecast optimism. Analysts issue more optimistically biased earnings forecasts and buy recommendations under high market uncertainty (VIX). The lower reputational costs and larger benefits of optimistic output explain the increased optimistic output: Analysts are less likely to be penalized for inaccuracy and can stimulate more trading activity from optimistically biased output when market uncertainty is high. We find that the likelihood of analysts’ turnover decreases, while the trading volume associated with optimistic output increases, with VIX. No evidence suggests that analysts’ self‐selection affects our findings on optimism and market uncertainty.     

Population Genetics and Economic Growth

This paper builds an age-structured model of human population genetics in which explicit individual choices drive the dynamics via sexual selection. In the model, agents are endowed with a high-dimensional genome that determines their cognitive and physical characteristics. Young adults optimally search for a marriage partner, work for firms, consume goods, save for old age and, if married, decide how many children to have. In accord with the fundamental genetic operators, children receive genes from their parents. An agent's human capital (productivity) is an aggregate of the received genetic endowment and environmental influences so that the population of agents and the economy co-evolve. After calibrating the model, we examine the impact of physical, social, and economic institutions on population growth and economic performance. We find that institutional factors significantly impact economic performance by affecting marriage, family size, and the intergenerational transmission of genes. The principal novel findings are that i) genetic diversity has a nonmonotone causal impact on population size and economic performance; ii) an endogenous population threshold exists which, absent frictions, causes societies with declining populations and output to reverse course and grow; and iii) that the emotion love substantially accelerates economic growth by increasing genetic diversity just enough, which we term The Goldilocks Principle.     

中国入世对国际经济影响的量化分析

中国工业品出口引起的竞争加剧会不会导致东南亚国家非工业化 ,使它们回到作为初级产品出口国的地位 ?或者 ,制造业产业链中是否存在东南亚国家可以专业化的有利空间 ?通过G Cubed亚太模型的模拟表明 ,中国大量劳动力全面进入国际劳动分工只有在满足以下两个条件的情况下才会导致东南亚国家的非工业化 :流向东南亚国家的国外直接投资大量地转向中国 ,并且东南亚国家放任FDI流入的下降从而降低由此带来的技术扩散。如果东南亚国家能够通过其它方式很快吸收国外新技术及提高本土技术创新能力阻止技术下降 ,那么它们就能在国际制造业产业链中找到有利空间。本文的政策含义是 :东南亚国家要通过向它们的科学家和管理者加速扩散新知识以及为那些下岗工人提供合适的再培训 ,从而将人力资本的深化与广化作为首要考虑的目标。     

Competitive advantage and the transformation of value chains over time: The example of a South Korean diversified business group, 1953–2013

We examine the historical evolution of different elements in value chains that create value-added and competitive advantage. This is achieved by using the conceptual model of the ‘smile curve’ with a longitudinal case study of a diversified business group, CJ Group, a former affiliated firm of Samsung Group. We found that the value-added structure graph in the industrialisation period displayed an ‘upside-down U shape’, indicating that production and manufacturing were the most value-adding sectors. However, in the more recent knowledge-based economy period, the graph shows a quite different shape, indicating R&D, firm infrastructure, manufacturing, logistics, service, and marketing as sources of value-added. This shows that competitive advantage diversified into other fields to fit with the changed economy. We also investigate what type of organisational structure, strategy, and capabilities were adopted for organisational change. We found an evolution, with an unrelated diversification strategy by altering capabilities from contacts and generic to organisational and technological capabilities.     

A path to altruism: Investigating the effects of brand origin and message explicitness in CR‐M campaigns

An increasing number of fashion brands are employing cause‐related marketing (CR‐M) campaigns to promote their social responsibility. However, with growing consumer skepticism about CR‐M, it is becoming more difficult than before to encourage consumers' positive responses to these campaigns. Based on construal level theory and rhetorical theory, this study examined the way brand origin (local vs. global), and its interaction with message type (explicit vs. implicit), influence consumers' perceived brand altruism and brand favorability. Two experimental studies were conducted with a total of 574 U.S. consumers. The results of Study 1 indicated that consumers exhibited higher perceived brand altruism and brand favorability toward a local brand's CR‐M campaign than a global brand's, showing that psychological distance can influence a CR‐M campaign's effectiveness. In addition, the results of Study 2 revealed that an explicit CR‐M message was more effective for global brands, while an implicit message was more effective for local brands, and perceived brand altruism mediated both effects. This suggests the importance of framing messages according to brand origin to maximize CR‐M campaigns' ability to achieve their goals effectively, in which perceived brand altruism plays a key role. The study's implications and limitations are discussed.     

The impact of competition on vertical integration: The role of technological niche width

Despite there being numerous studies exploring the relationship between competition and vertical integration, the empirical findings regarding the nature of this relationship are still unclear. The current study suggests that technological niche width mediates the relationship between competition and vertical integration. It also suggests that technological niche width and vertical integration play a complementary role in enhancing firm performance. These arguments have found empirical support in the examination of the U.S. hybrid electric vehicle market from 2008 to 2016. In so doing, this study provides an opportunity to better understand the relationship between competition, vertical integration, and technological niche width. In addition, it explains how firms can effectively manage fierce competition and achieve the goal of superior performance through strategic decisions regarding vertical integration and technological niche width.     

Indonesia's economic performance in comparative perspective and a new policy framework for 2049

This is the first paper of a planned ‘Indonesia 2049’ project, which asks how far Indonesia's economy will have developed 100 years after actual political independence in 1949. We compare dimensions of Indonesia's economy with those of two oil exporters (Mexico and Nigeria), three large populous developing economies (China, India and Brazil) and three Southeast Asian neighbours (Malaysia, Thailand and the Philippines). Under Soeharto, Indonesia's economic performance was better than it had been under Soekarno, and above the average of the eight comparator countries, but below that of the East Asian economies. Our view is that Susilo Bambang Yudhoyono's second administration must adopt a new economic policy framework to ensure successful transition to knowledge-based growth. This proposed new framework goes beyond the Washington Consensus of ‘getting prices right’ and ‘getting institutions right’ to include ‘getting the role of science right’ and ‘getting the conception of the reform process right’.