Irreversible investment,ambiguity and equity default swaps

We study the impact of ambiguity on the pricing and timing of the option to invest. There is a funding gap to undertake the investment, which is covered by entering into an equity-for-guarantee swap. Our model predicts that the more ambiguity-averse the agents, the less the option value, the later the investment and the higher the guarantee cost and the leverage. If the entrepreneur is more ambiguity-averse than the insurer, the investment threshold slightly rises as the perceived ambiguity increases, and on the contrary, if the entrepreneur is less ambiguity-averse than the insurer, the investment threshold increases sharply as the perceived ambiguity rises.     

Unemployment and econometric learning

We apply well-known results of the econometric learning literature to the Mortensen and Pissarides real business cycle model. Agents can always learn the unique rational expectations equilibrium (REE), for all possible well-defined sets of parameter values, by using the minimum-state-variable solution to the model and decreasing gain learning. From this perspective the assumption of rational expectations in the model could be seen as reasonable. But using a parametrisation with UK data, simulations show that the speed of convergence to the REE is slow. This type of learning dampens the cyclical response of unemployment to small structural shocks.     

期权型资源配置对企业竞争优势的影响

旨在打开资源基础观中组织黑箱，丰富资源配置研究成果，探讨在新竞争时代何种资源配置方式能更有效地促进企业创新特别是探索式创新，从而建立或强化企业竞争优势。通过梳理西方最新研究成果，基于我国146家企业样本，利用回归分析法检验期权型资源配置对企业竞争优势的促进作用，采取因果逐步回归法检验探索式创新在该过程中的中介作用。研究表明：期权型资源配置既能强化企业竞争优势，又能促进探索式创新；探索式创新在期权型资源配置与竞争优势间发挥部分中介作用；相对于创新的资源投入，资源配置方式对竞争优势的作用更强。     

Nonlinearities in the real exchange rates: new evidence from developed and developing countries

This paper investigates nonlinearities in the dynamics of real exchange rates. We use Monte Carlo simulations to establish the size properties of the Teräsvirta-Anderson test, when the dynamics of the real exchange rate is influenced by an exogenous process. In addition, we show that a modified nonlinearity test, which includes additional right-hand-side variables, performs much better than the original in both Monte Carlo exercises and in the actual data on 1431 bilateral real exchange rate series. Finally, we investigate the dynamics of the real exchange rate for both developed and developing countries using the modified test for the recent floating period. In general, the results find a greater incidence of nonlinear dynamics for developing country real exchange rates.     

Persistence of Price–Cost Margin and Technical Efficiency in the Indonesian Food and Beverage Industry

Abstract

This research investigates the persistence of price–cost margin (PCM) and technical efficiency (TE) of firms and the relation between these two factors in 44 subsectors of the Indonesian food and beverage industry in the period 1980–2014. Data envelopment analysis with a bootstrapping approach is applied to estimate TE. An autoregressive model, accounting for endogeneity, is applied to estimate the persistence coefficients of PCM and TE. A cross-sectional regression model is also applied to estimate the relation between the persistence of the PCM and the persistence of TE. The results show that for these food and beverage firms, high PCM and low TE persist. Furthermore, the persistence of PCM negatively affects the persistence of TE in the industry.     

Real-time co-creation and nowness service: lessons from tourism and hospitality

Brands take advantage of technology, social media and constant connectivity to foster organic consumer engagement and interactions towards co-creating personalised customer service. Real-time service offers dynamic engagement with connected consumers. Brands in tourism and hospitality use technology to dynamically enhance consumer experience through co-creation. The integration of real-time consumer intelligence, dynamic big data mining, artificial intelligence, and contextualisation can transform service co-creation by mobilising recourses in the ecosystem. Nowness service emerges by dynamically engaging consumers in experience cocreation in real time. It has five interconnected characteristics that revolutionise the tourism and hospitality, namely: real-time, co-creation, data-driven, consumer-centric and experience co-creation.     

The Impact of Power Distance and Uncertainty Avoidance on Real Options Exercise: Potential for Suboptimal Time Delays and Value Destruction

Real options (RO) valuation has been promoted as a way to evaluate investment opportunities and make investment decisions that takes into account the value of managerial flexibility in the face of uncertainty. Although RO enjoys a substantial body of literature considering its application and suitability in different situations, the impact of national culture on the application of RO has received little attention. Values embedded in national culture affect the behavior of managers. In particular, these values play a role in how managers frame information, communicate, and make decisions, directly and indirectly affecting behavior through cultural layers such as organizational culture. National culture, therefore, can systematically affect the application of RO, potentially leading to suboptimal outcomes. In this article, we hypothesize how 2 particularly relevant dimensions of culture, power distance and uncertainty avoidance, affect RO exercise, and estimate the magnitude suboptimality of these effects using a model we develop for the case of a put option. Our estimates suggest RO may not always be a superior valuation approach to net present value for national cultures with certain characteristics.     

China and international market integration: Evidence from the law of one price in the Middle East and Africa

We model market integration in the Middle East and Africa by analyzing price dispersion and testing the law of one price (LOP) on highly-comparable actual local retail prices of 135 goods and services across 23 countries in the region over the period of 1990–2016. Second-generation panel estimators are applied to four price benchmarks: Regional average, South Africa, China, and US prices. Cross-regional price dispersion diminishes considerably over time up to 2008, particularly for non-tradeables around China price. The test of LOP indicates the percentage of convergent prices is highest in China price benchmark, followed by US, South Africa, and regional average benchmarks. Direct estimation of the convergence speed confirms this order. Overall, the results show evidence of increasing market integration in Middle East and Africa but it appears to be driven by global forces and, especially, the rise of China as a new economic power. The results show that some emerging market economies, such as China, can step up and promote integration while traditional economic powerhouses, such as the USA and UK, disengage from international economic relations.     

Effect of Price Change Alert on Perceptions of Hotel Attribute-based Room Pricing (ABP) versus Traditional Room Pricing (TRP)

Aside from marketing information on traditional room rates, hotels and online travel agents (OTAs) are trying a new pricing technique based on the attributes of guestrooms. This research investigates how attribute-based room pricing (ABP) differs from traditional room pricing (TRP) in influencing consumer reactions when consumers receive a price change alert before (vs. after) sales. Through a series of experiments, we found that TRP and ABP result in similar alert attitude, brand attitude, and visit intention for presale price change alert. However, ABP leads to more favorable results for postsale price change alert. We examined the underlying mechanism and found that perceived fairness mediates the effect of pricing strategy on brand attitude, price alert attitude, and visit intention for postsale alert only. This research provides hotel managers and OTA marketers with guidance on when to send either type of price change message to consumers.