The information revolution,innovation diffusion and economic growth: an examination of causal links in European countries

Quality & Quantity - Over the last 5 decades, the economic landscape in Europe has been transformed rapidly due to innovation, digitisation of the economy, and emergence of new sources of...     

Inter-linkages between competition and stabilisation policies in the banking sector and stock market development in Europe

The banking sector and the stock market in Europe have been adversely impacted by a series of global financial crises over the last two decades. Major financial reforms were implemented to enhance the stability and competition within the banking sector. Measures were also implemented to create a vibrant stock market in Europe to stimulate economic growth in Europe. This study examines the interactions between stock market development, banking competition, and banking stability in European countries from 1996 to 2016. The purpose of the study is to understand the inter-linkages between these variables to ascertain the spillover impact of policy reforms in the banking sector on the stock market and vice-versa. Using a vector error-correction model, the study finds long-run and short-run inter-linkages between banking competition, banking stability, and stock market development in European countries. The study’s most robust result is that banking competition and banking stability stimulate stock market development in the long run. There is also some evidence that healthy competition in the banking sector and stock market development instils greater stability in the banking sector. The results suggest that policy measures put in place to create a vibrant stock market must include elevating banking competition and banking stability, with policymakers being cognizant that causality may be bidirectional.     

Does diversity matter? A fresh inquiry into the energy,economy and environment nexus

ABSTRACT

The article extends the literature on the nexus among economy, environment and energy by incorporating an index of electricity generation diversity in production and emission functions. The index is mathematically equivalent to Herfindahl–Hirschman index. The index captures substantial information regarding the ongoing energy transition at the global level. The results obtained through pooled mean group estimation, on a dataset of fairly diversified group of countries, indicate that if diversity index increases by a percentage point, per capita income increases by 2.4% and per capita emissions are reduced by 0.71%. This is against the conventional wisdom in favour of specialization. The study has found some interesting long-run causal pathways. Firstly, the causality runs from diversification to income. Secondly, there is a causality running from electricity consumption to specialization. Thirdly, bi-directional causality runs between emissions and specialization. The results have interesting policy implications. The study supports the growth hypothesis that the electricity consumption drives the economy. As this inevitably increases emissions, a better pathway is through diversification. The fossil fuel intensive pathway may have been the preferred choice in the past for countries with low electricity consumption; the diversified portfolio appears to be prudent in the future.     

Strategic alliances: a hospitality industry perspective

The article focuses on strategic alliance theory as it applies to the hospitality industry. Citing research as well as real-world examples, the authors integrate a variety of concepts and develop four propositions about the growing use of strategic alliances in the hospitality industry. These propositions include the following: P1: Hospitality alliances will evolve from equity joint ventures to collaborative joint ventures (non-equity) as competitor alliances will emerge. P2: Contractual agreements will evolve from simple franchise and management contracts to more complex resource-sharing, non-equity agreements. P3: Complex resource sharing between allying partners will help incumbent firms build relationships with partner firms that will lead to the development of competitor alliances. P4: Technology will help in the development of competitor alliances, which will also help to increase incumbent firms’ productivity and profitability.     

Deposit Insurance, Capital Adequacy Requirements and Interest Rate Dynamics

This paper examines the long run interaction among deposit insurance, bank deposit rates and capital adequacy requirements. Using analysis similar to the price discrimination model of Lott and Roberts (1991) we find that a competitive environment among banks would link the spread between insured and uninsured deposit rates to the size of the insurance premium. We also find that banks that choose to operate at the regulatory minimum capital level, would increase asset risk with increased capital requirements if (1) the implicit interest paid to insured and uninsured depositors is equally sensitive to changes in risk and capital adequacy and (2) the insurance premium is independent of the level of risk and capital adequacy. Under the present risk-based premium structure, asset risk has the potential to decline when the regulatory agency raises capital requirements. Finally, we examine the time series behavior of insured and uninsured interest rates to see if it is consistent with our theoretical model. We find that insured and uninsured rates, along with deposit insurance premiums, are cointegrated series as suggested by our model.     

无需过度忧虑通货膨胀

远期均衡通胀尚未对大宗商品价格回落做出回应,而且实际上均衡通胀比5月份石油价格处在类似水平时更高了。我们建议远期均衡通胀下降仓位。石油价格已从7月初的140美元/桶的高点急剧回落至117美元/桶,当前已经回到5月初的水平。不出所料地,全球均衡通胀从7月初高点急剧下降,     

Assessing dimensions of organizational trust across cultures: A comparative analysis of U.S. and Indian full service hotels

This study delves into the organizational trust based similarities and differences across “individualist” and “collectivist” service employees in hotels. Specifically, the three dimensions of organizational trust, i.e., integrity, commitment and dependability are compared across the two samples from the U.S. and India to highlight how employees perceive the level of each of the three dimensions across cultures. Findings suggest that the three dimensions represent the trust construct across different national cultures. However, in comparing the individual dimension of the trust construct, a significant difference exists between the perceptions of employees in the two cultures, suggesting that perception-based differences exist across cultures.     

Testing Uncovered Interest Rate Parity and Term Structure Using a Three‐regime Threshold Unit Root VECM: An Application to the Swiss ‘Isle’ of Interest Rates*

In this article, a three‐regime multivariate threshold vector error correction model with a ‘band of inaction’ is formulated to examine uncovered interest rate parity (UIRP) and expectation hypothesis of the term structure (EHTS) of interest rates for Switzerland. Combining both UIRP and EHTS in a model that allows for nonlinearities, we investigate whether the Swiss advantage is disappearing with respect to Europe. Our results favour threshold cointegration and show that both hypotheses hold, at least in one of the three regimes of the process for Switzerland/Germany. The same is not true between Switzerland and the United States.