Optimal price‐level drift under commitment in the canonical New Keynesian model

Abstract In both the canonical and many extended versions of the New Keynesian model, optimal monetary policy under commitment implies price‐level stationarity as long as expectations are rational. We show that this is no longer the case if the central bank and private agents make decisions before observing current shocks. The optimal amount of price‐level drift in response to unexpected innovations to inflation is quantitatively important. This result has important implications for monetary policy, including the design of the optimal loss function for the central bank if it cannot commit to its future policies.     

Do co-opted boards increase insider profitability?

Using a sample of U.S. firms over the period 1996–2014, this paper examines whether insider trading profitability increases with high board co-option. Indeed, we find that firms with a higher level of co-opted directors exhibit higher insider trading profitability, largely due to a lower level of managerial ability and analyst coverage. Co-opted boards are also unlikely to implement self-imposed insider trading restrictions, exacerbating this relationship. This positive association is mitigated by a higher level of external monitoring by institutional investors and if the CEO receives more performance-based incentives. Overall, co-opted directors demonstrate aligned interests with CEOs and corporate insiders rather than performing their role as monitors. As a result, a more co-opted board is positively associated with exploitative behaviour of insiders.     

The transformation of national patents for high-technology exports: Moderating effects of national cultures

National culture as an informal institution influences the national absorptive capacity (NAC) measured in patents per capita in the upstream and entrepreneurial activity in the downstream. Does national culture moderate the link between NAC and high-technology exports? We explored this question in a comprehensive study design. Based on a panel of 101 countries over 21 years, first, we assessed the direct effect of NAC on high-technology exports in the baseline hypothesis. Then, we analysed the moderating role of national culture between the country’s NAC and high-technology exports. The results show several insights from the comparison between the literature and our evidence. (i) We proposed that power distance negatively moderates patent and high-tech exports; the results show a positive correlation of the interaction. (ii) We proposed that individualist culture positively moderates patent and high-technology exports; the results show a positive correlation of the interaction. (iii) We proposed that high masculinity has no moderating effects; the results show a positive interaction effect. (iv) We proposed that uncertainty avoidance negatively moderates the link between NAC and high-technology exports; the results show negative and significant moderation without the introduction of long-term orientation; however, it is non-significant after the introduction of long-term orientation. Last, (v) we proposed that long-term orientation positively moderates the link between NAC and high-technology exports; the results are positive and significant without uncertainty avoidance, and they are non-significant with uncertainty avoidance in the analysis. Uncertainty avoidance and long-term orientation neutralise each other’s effects. Based on these insights, we contribute to the literature in three ways. First, we address the issue of high-technology exports in international business at the national level and link it to the vertical transformation of national science in patents per capita. Second, we contribute to the institutional theory encompassing informal norms (culture) and formal rules (policy) in the flow of NAC to commercial performance. Third, we make several policy-related suggestions.     

How should Central Banks Respond to Non-neutral Inflation Expectations?

This paper investigates the net real inflation effect on output in ten countries, comprising both advanced and developing countries. An indicator is introduced to compute the net inflation effect on output (NIEO) based on the difference between two concepts of core inflation, where both are computed using the decomposition of VAR residuals. We find that for all countries, when inflation is increasing the NIEO is significantly positive and is negative during periods of decreasing inflation. Typically, countries which follow anti-inflationary policies if the NIEO is of small magnitude suffer relatively minimal damage in output, whereas if the same policies are undertaken when the NIEO is large the damaging effects on output could be much greater. This suggests that the NIEO could be a useful indicator of the likely effects of policy, especially for countries which have frequent episodes of high inflation, and in those countries which employ inflation-targeting policy, as the timing of monetary policy actions could be optimized to take account of this real effect of inflation.     

Economic freedom and migration: A metro area-level analysis

We examine the determinants of intra-U.S. population migration at the metropolitan area level (MSA), with an emphasis on the presence of policies that are consistent with economic freedom. We are the first to produce a multivariate regression analysis of migration and economic freedom at the local level. Combining a 1993–2014 unbalanced panel of MSA-to-MSA migration data from the Internal Revenue Service with a new economic freedom index for U.S. metropolitan areas, we find that a 10% increase in economic freedom of a destination MSA, relative to the economic freedom of an origin MSA, was associated with a 27.4% increase in net migration from the origin MSA to the destination MSA. If we use mean net migration flows as a benchmark, we would expect a 10% increase in relative economic freedom to increase net migration to the destination MSA by 22 workers per year from each other MSA.     

Virality of Social Change Messages on Facebook: A Study of Advocacy and Relationship Building Strategies of LGBTQ Advocacy Organizations

ABSTRACT

The communicative affordances of Facebook transformed the way nonprofit organizations communicate with publics. However, the connection between advocacy and virality received limited scholarly scrutiny. This study extends our knowledge of advocacy by examining the relationships between advocacy strategies, tactics, and virality. For this study, Facebook posts of LGBTQ advocacy organizations from January 2016 to December 2018 were collected. Content analysis of 1,500 Facebook posts revealed advocacy and relationship building strategies of LGBTQ nonprofit organizations. MANOVA analyses signaled that advocacy strategies and tactics are significant predictors for virality. Furthermore, LGBTQ advocacy organizations predominately utilized affective and cohesive social presence strategies on Facebook to build relationships with publics.     

Individual and organizational learning from inter‐firm knowledge sharing: A framework integrating inter‐firm and intra‐firm knowledge sharing and learning

Literature has highlighted but not explored links between knowledge sharing and learning at inter‐firm and intra‐firm levels. Using the single case of an aviation refuelling company as the basis for our research methodology and collecting data through 34 semi‐structured interviews, we develop a framework that integrates knowledge sharing and learning at inter‐firm and intra‐firm levels. We show that intra‐firm knowledge sharing capabilities facilitate the diffusion of inter‐firm learning within organizations. Moreover, inter‐firm trust manifests in different forms that affect individual and organizational learning. The purpose of collaboration determines what a firm learns or discards. The findings are important for organizations facing a shortage of skills. © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

The right metrics for marketing-mix decisions

This study addresses the following question: For a given managerial, firm, and industry setting, which individual metrics are effective for making marketing-mix decisions that improve perceived performance outcomes? We articulate the key managerial takeaways based on testing a multi-stage behavioral framework that links decision context, metrics selection, and performance outcomes. Our statistical model adjusts for potential endogeneity bias in estimating metric effectiveness due to selection effects and differs from past literature in that managers can strategically choose metrics based on their ex-ante expected effectiveness. The key findings of our analysis of 439 managers making 1287 decisions are that customer-mindset marketing metrics such as awareness and willingness to recommend are the most effective metrics for managers to employ while financial metrics such as target volume and net present value are the least effective. However, relative to financial metrics, managers are more uncertain about the ex-ante effectiveness of customer-mindset marketing metrics, which attenuates their use. A second study on 142 managers helps provide detailed underlying rationale for these key results. The implications of metric effectiveness for dashboards and automated decision systems based on machine learning systems are discussed.     

Correction to: Determinants of agricultural entrepreneurship: a GEM data based study

International Entrepreneurship and Management Journal - The original article has been corrected. The spelling of author name Amit Kumar Dviwedi was incorrect and has now been corrected to Amit...     

A resource orchestration view of supply chain traceability and transparency bundles for competitive advantage

The literature has mostly examined supply chain (SC) traceability and SC transparency separately, ignoring the mutually constitutive relationship of these two related constructs. We draw on the resource orchestration theory and the causal complexity perspective to conceptualize and validate SC traceability and SC transparency as interrelated organizational capabilities that may mutually enhance or compensate each other for competitive advantage. We constructed an original sample from two sources to empirically test this conceptualization using fuzzy set qualitative comparative analysis (fsQCA). Our empirical results reveal that the ability of firms to leverage SC traceability for a high financial performance is contingent upon creating a transparency perception of SC with a wide range of stakeholders. Our results also identified the firm size and its international presence, as having a significant bearing on the ability of firms to leverage SC traceability and SC transparency capabilities for a competitive advantage.