On the optimal distribution of traffic of network airlines

Network airlines have increasingly focused their operations on hub airports through the exploitation of connecting traffic. However, in this paper we show that they may also have incentives to divert traffic away from their hubs. More precisely, we examine how the optimal distribution of traffic of network carriers can be affected by the two major recent innovations in the airline industry: the regional jet technology and the low-cost business model. On the one hand, we show that a network airline may find it profitable to serve thin point-to-point routes with regional jets when the distance between endpoints is sufficiently short and there is a high proportion of business travelers. On the other hand, we observe that a network airline may be interested in serving thin point-to-point routes by means of a low-cost subsidiary when the distance between endpoints is longer and there is a high proportion of leisure travelers. We conclude that network airlines are using those innovations to provide services on thin routes out of the hubs.     

Trade associations as corporate social responsibility actors: an institutional theory analysis of animal welfare in tourism

Most travel trade associations ignore their responsibility towards sustainable development broadly and animal welfare in particular. We analyse the development and implementation of animal welfare standards across 62 national and international associations using interviews, surveys, content analysis of published materials and websites. Only 21 associations mention sustainability in their websites, and only six refer to animal welfare. Of these, three associations have well-developed animal welfare activities (ABTA, ANVR and GSTC) [AQ1] and only one (lightly) monitors its members’ sustainability and animal welfare standards (ANVR). ABTA’s Animal Welfare Guidelines are the de facto industry standard, despite being designed for information (not auditing) purposes and lacking enforcement mechanisms. We examine jolts that prompt some associations to respond to external pressures and the institutional entrepreneurship process that triggers a process of reflexivity, theorisation and diffusion of a broader sense of responsibility. We examine the field-level conditions that lead to mostly mimetic pressures on large European tour operators (that compel them to act due to reputational risk management), with minimal normative pressures that would diffuse animal welfare practices across other association members. Change is not divergent, and the resources allocated to animal welfare protect trade associations’ members from criticism without binding them to implementation.     

Comparing the Impact of Credit Constraints on the Growth of SMEs in a Transition Country with an Established Market Economy

In this paper we compare the role of internal finance on the growth of firms between a leading transition country, Slovenia and an established market economy, Belgium. We find that firms in Slovenia are more sensitive to internal financing constraints than their Belgian counterparts. Furthermore, we find that de novo firms and firms with long term debt are most constrained and that micro and SMES can face great difficulties in accessing external sources of finance. Foreign firms, however, are able to raise external finance and consequently their growth is less reliant on the availability of internal finance. Our findings appear to indicate that although Slovenian firms are no longer recipients of soft budget constraints, the financial environment is not yet fully functional.      

The impact of cluster connectedness on firm innovation: R&D effort and outcomes in the textile industry

Recent research into the clustering effect on firms has moved away from a simplistic view to a more complex approach. More realistic and complex causal relationships are now considered when analysing these territorial networks. Specifically, this paper attempts to analyse how cluster connectedness moderates the relationship of a firm's innovation effort and the results obtained from this effort. We want to question the commonly accepted direct and positive impact of R&D effort, and moreover, we suggest the existence of a saturation effect and that the level of cluster's inter-connectedness in the cluster moderates this effect. We have developed our empirical study focusing on the Spanish textile industrial cluster. This is a complex manufacturing industry that uses relatively low-technology manufacturing and R&D. Our findings suggest that the degree to which a firm is involved with, or connected to, other firms in the cluster can moderate the effect of the R&D effort on its innovation results. More generally, we aim to contribute to the discussion on the degree to which firms should be involved in the cluster network in order to operate efficiently and gain the maximum competitive advantages. Our findings have implications both in recent cluster and network literature as well for institutional policy.     

Small business management and environmental engagement

Small firms in tourism are characterised by informal approaches to management, allowing their owners to meet a variety of often overlapping business and personal goals. Environmental certification schemes generally require members to subscribe to formal environmental management systems (EMS), even when aimed at small business operators. This paper examines in detail the managerial approaches of a small group of owner-managers who are operating within the approximately 3000-member Green Tourism Business Scheme (GTBS) available in the UK and Ireland. The findings suggest that the type of environmental practices adopted most willingly reflect the formality of management within the business and the owner-managers’ various backgrounds, values, reasons to be in business, expectations from acting and their understanding of the “environment”. It finds that the “Plan-Do-Check-Review” approach of most EMS does not easily relate to the complex motivations and needs of the world of small business. The paper concludes that environmental engagement is more likely to be fostered if owner-managers’ managerial approaches and assumptions are better understood and that shared visions for environmental engagement are encouraged through informed dialogue. Both economic benefits and the fostering of “feel good” factors should be stressed if small tourism businesses are to adopt EMS programmes.     

Environmental management decision-making in certified hotels

This paper analyses environmental decision-making against two axes, motivations and decision-making processes, to understand the reasons for pro-environmental behaviour by the managements of Spanish Eco-management and Audit Scheme (EMAS)-certified hotels. Mixed methods were used to study perceptions of EMAS and reasons for being certified, with current and lapsed EMAS-certified firms triangulated against expert interviews and documentary evidence. Four groups of hotels were differentiated: Strategic hotels (22%) (with high levels of integrated environmental management), Followers (48%), Greenwashers (11%) and Laggers (19%) (with low levels of integrated environmental management). Most hotels were found to be internally driven in their purpose and ad hoc in their decision-making, with limited understanding of externally driven benefits and motivation for more systematic management systems. This questions the success of EMAS as both a continuous improvement management and as a market-based regulation tool for hotels. Few hotels overall related high environmental standards to the possibilities of gaining market advantage: most wished to avoid legal challenges. The paper also illustrates the ways in which hotels opportunistically switch certification systems to get what they see as a better deal.     

Incomplete markets,liquidation risk,and the term structure of interest rates

We analyse the term structure of interest rates in a general equilibrium model with incomplete markets, borrowing constraint, and positive net supply of government bonds. Uninsured idiosyncratic shocks generate bond trades, while aggregate shocks cause fluctuations in the trading price of bonds. Long bonds command a “liquidation risk premium” over short bonds, because they may have to be liquidated before maturity – following a bad idiosyncratic shock – precisely when their resale value is low – due to the simultaneous occurrence of a bad aggregate shock. Our framework endogenously generates limited cross-sectional wealth heterogeneity among the agents (despite the presence of uninsured idiosyncratic shocks), which allows us to characterise analytically the shape of the entire yield curve, including the yields on bonds of arbitrarily long maturities. Agents? desire to hedge the idiosyncratic risk together with their fear of having to liquidate long bonds at unfavourable terms implies that a greater bond supply raises the level of the yield curve, while an increase in the relative supply of long bonds raises its slope.     

Targeting biomed cluster from a mature pharma industry: the Medicon Valley experience

This paper analyses the emergence and development of the Medicon Valley biomedicine cluster from an evolutionary perspective. We focus on the co-evolution and synergies among the drivers of the cluster's emergence. Targeting biomed involves some challenges and complexities, which are particularly strong in this case, owing to its specificities (bi-national nature, predominant context of horizontal policies, pre-existent pharma industry). The main aim is to analyse the role of the different institutional players in this policy process. The study suggests that targeting emerges from regional coordination bodies. It also reveals a smart specialisation strategy ‘avant la lettre’ and shows a number of critical insights for the implementation of this policy approach.