Common risk factors in the U.S. and UK interest rate swap markets: Evidence from a nonlinear vector autoregression approach

This paper produces evidence in support of the existence of common risk factors in the U.S. and UK interest rate swap markets. Using a multivariate smooth transition autoregression (STVAR) framework, we show that the dynamics of the U.S. and UK swap spreads are best described by a regime‐switching model. We identify the existence of two distinct regimes in U.S. and UK swap spreads; one is characterized by a “flat” term structure of U.S. interest rates and the other is characterized by an “upward” sloping U.S. term structure. In addition, we show that there exist significant asymmetries on the impact of the common risk factors on the U.S. and UK swap spreads. Shocks to UK oriented risk factors have a strong effect on the U.S. swap markets during the “flat” slope regime but a very limited effect otherwise. On the other hand, U.S. risk factors have a significant impact on the UK swap markets in both regimes. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:221–250, 2004     

Audit Fees, Non-Audit Fees and Auditor Going-Concern Reporting Decisions in the United Kingdom

The accounting profession has come under increased scrutiny over recent years about the growing number of non-audit fees received from audit clients and the possible negative impact of such fees on auditor independence. The argument advanced is that providing substantial amounts of non-audit services to clients may make it more likely that auditors concede to the wishes of the client management when difficult judgments are made. Such concerns are particularly salient in the case of reporting decisions related to going-concern uncertainties for financially stressed clients.
 This study empirically examines audit reports provided to financially stressed companies in the United Kingdom and the magnitude of audit and non-audit service fees paid to the company's auditors. We find that the magnitude of both audit fees and non-audit fees are significantly associated with the issuance of a going-concern modified audit opinion. In particular, financially stressed companies with high audit fees are more likely to receive a going-concern modified audit opinion, whereas companies with high non-audit fees are less likely to receive a going-concern modified audit opinion. Additional analyses indicate that the results are generally robust across alternative model and variable specifications. Overall, evidence supports the contention that high non-audit fees have a detrimental effect on going-concern reporting judgments for financially stressed U.K. companies.     

Sense and sensibility in personalized e‐commerce: How emotions rebalance the purchase intentions of persuaded customers

This research develops and tests a theoretical model of customer persuasion in personalized online shopping, building on information processing theory, and addressing cognitive and affective stages of the persuasion process. Data from 582 experienced online customers were used to validate the proposed model through structural equation modeling and multigroup analysis. Results show that quality of personalization, message quality, and benefits of the personalized recommendations are important in the persuasion process. Positive emotions increase the effect of persuasion on purchase intentions, contrary to negative emotions. The study extends online personalization theory, offers an in‐depth analysis of the persuasion process in online shopping, and provides valuable recommendations for personalized online marketing.     

Hard,soft or ambidextrous? Which influence style promotes managers’ task performance and the role of political skill

Abstract

Ambidexterity at the manager level focuses on the crucial, but underexplored, role of managers’ knowledge, skills, and behaviors to address competing demands and promote organizational ambidexterity. As such, to successfully complete their assigned duties, managers need to employ the appropriate interpersonal style and calibrate their behavior to different contextual demands. This study highlights the role of the individual in the ambidexterity process by introducing the concept of influence tactic ambidexterity, to denote the frequent use of both hard and soft influence and investigating its role on task performance. Drawing on the literature on ambidexterity and HRM, we analyze data from a sample of 172 middle managers and their corresponding 68 supervisors working for multinational organizations, and provide evidence that influence tactic ambidexterity relates to higher levels and less variation in managers’ task performance compared to the sole use of either hard or soft tactics. Our findings also show that political skill positively moderates the relationship between influence tactic ambidexterity and a manager’s task performance. Therefore, this study suggests that influence tactic ambidexterity and political skill can be considered valuable HR assets for managers.     

Holistic investment assessment: optimization,risk appraisal and decision making

On deciding for the most appropriate investment when capital restrictions exist, investors define their alternatives and analyze each one of them. Traditionally, the definition, appraisal and analysis stages are treated separately. Herein, an innovative holistic method is proposed for bridging these stages. Within this method, investment attributes definition occurs by genetic algorithm optimization, while the analysis of the investment is realized through simulation. The method also proposes the NPV Expected Shortfall and the NPV Risk Preference Index as investment evaluation criteria. An illustrative case study of two mutually exclusive renewable energy investment scenarios is also used for demonstration purposes. Copyright © 2008 John Wiley & Sons, Ltd.     

The Lead‐Lag Relationship Between Cash and Stock Index Futures in a New Market

This paper investigates the lead‐lag relationship in daily returns and volatilities between price movements of the FTSE/ATHEX‐20 and FTSE/ATHEX Mid‐40 stock index futures and the underlying cash indices in the relatively new futures market of Greece. Empirical results show that there is a bi‐directional relationship between cash and futures prices. However, futures lead the cash index returns, by responding more rapidly to economic events than stock prices. This speed is much higher in the more liquid FTSE/ATHEX‐20 market. Moreover, results indicate that futures volatilities spill information over to the corresponding cash market volatilities in both investigated futures markets, but volatilities in the cash markets have no effect on the volatilities of futures markets. Overall, it seems that new market information is disseminated faster in the futures market compared to the stock market. This implies that the futures markets can be used as price discovery vehicles, providing further evidence that derivatives markets contribute to completing and stabilising capital markets in Greece. A further finding of this study is that futures volume and disequilibrium effects between cash and futures prices are important variables in the explanation of volatilities in cash and futures markets.     

The effect of human resource practices on organizational performance: evidence from Greece

The present study addresses a central research question: how do human resource management practices contribute to organizational performance? We examined the following HR practices: (1) job security; (2) selective hiring; (3) self-managed teams and decentralization of decision making; (4) compensation policy; (5) extensive training; and (6) information sharing. We surveyed food managers in Greece and recorded their perceptions on HR practices and their relation to firm performance.

Results provide overall support for all HR practices except of job security. Selective hiring was found to be a key practice that improved organizational performance. Compensation policy, information sharing, decentralization of decision making and extensive training were significant predictors for all performance variables. Directions for further research are provided.     

The Unbiasedness Hypothesis in the Freight Forward Market: Evidence from Cointegration Tests

The current paper investigates the unbiasedness hypothesis of Forward Freight Agreement (FFA) prices in the freight over-the-counter (OTC) forward market trades. Cointegration techniques are employed to examine the hypothesis. The results indicate that: FFA prices one and two months before maturity are unbiased predictors of the realised spot freight rates for all investigated shipping routes; three months FFA prices for panamax Pacific routes are unbiased predictors of spot prices, while FFA prices for panamax Atlantic routes are found to be biased predictors of spot prices. This diverse evidence suggests that the validity of the unbiasedness hypothesis depends on the specific characteristics of the market under investigation, the selected trading route and the time to maturity of the contract. JEL classification G13, G14, C32     

Money power of Capital and Production of ‘New State Spaces’: A View from the Global South

An array of innovative financial and monetary institutional and policy initiatives recently emerged across the Global South at various spatial scales: (1) the deployment of national ‘self-insurance’ strategies such as large foreign reserve accumulation, different forms of capital controls, and currency market interventions; (2) the multiplication of bilateral, sub-regional, and regional financial and monetary mechanisms, including currency swaps and reserve-pooling arrangements, credit lines, bilateral aid, and development finance; and (3) a growing participation and assertiveness in multilateral financial arrangements. After critically reviewing the existing literatures – the international political economy (IPE) of ‘policy space’ and the IPE of ‘financial statecraft’ – the paper deploys a ‘scalar-relational’ critical IPE approach and interprets these policy initiatives in terms of a crisis-driven production of ‘new state spaces’ across the Global South, in the context of the current period of credit-led capital accumulation. The paper argues that this process has been characterised by the contradictory extension, intensification and growing complexity of the tasks taken on by the capitalist state at various scale levels, resulting in the increasing entanglement of state power in the nested hierarchy of monetary relations, from the global scale to bodies and subjectivities.     

Unemployment,Labor Market Flexibility,and Absenteeism: A Pan‐European Study

Using micro‐data from the European Union's Labour Force Survey for 28 countries this study investigates the incidence and intensity of individuals' sickness‐absence behavior, and assesses the importance of labor market characteristics like unemployment and the extent of atypical contracts and second job‐holding on individuals' sickness absence. The results identify that unemployment affects sickness absence through different pathways, exerting a negative effect on the probability of being absent and a positive effect on the duration of absence. In addition, the degree of second job‐holding and part‐time contracts in the labor market is found to be negatively related to individuals' sickness absence.