Corporate financial soundness and its impact on firm performance: implications for corporate debt restructuring in Slovenia

This article studies the extent of corporate leverage and range of excessive debt of Slovenian firms during the recent financial crisis. Half of all firms (of those with some non-zero debt and at least one employee) are found to face an unsustainable debt-to-EBITDA leverage ratio beyond 4, accounting for almost 80% of total outstanding debt. Moreover, a good quarter of all firms experience debt-to-EBITDA ratios exceeding 10 and hold almost half of total aggregate net debt. We then examine how this financial distress affects firm performance in terms of productivity, employment, exports, investment and survival. We find that, while less important during the good times (pre-recession period), lack of firms’ financial soundness during the period of financial distress becomes a critical factor constraining firm performance. The extent of financial leverage and ability to service the outstanding debt are shown to inhibit firms’ productivity growth as well as the dynamics of exports, employment and investment. Micro and small firms are found to suffer relatively more than larger firms from high leverage in terms of export and employment performance during the recession period.     

Returns to networking in academia

This paper examines effects of academic networks in a Stackelberg differential game between journal editors and authors. Authors choose research papers to maximize satisfaction, while editors determine research quality to maximize journal reputation. Verifying the system for stability, results show that academic networks neither affect the number of publications nor the quality of an author’s papers. Networks only affect the number of an author’s citations. Editors’ preferences for publishing an author because of her network membership seem irrelevant. This happens because editors compete to increase their journal’s reputation by publishing high quality papers. Consequently, there is little room for editorial bias. Further, increased journal competition has the potential to erode the citation gains. The equilibrium research quality is below the maximum possible quality. Increases in publication benefits are shown to leave citations unaffected, increase the number of publications, and decrease research quality. The results generally carry through when publishing markets tend to a monopoly.     

Agreeing to disagree in a countable space of equiprobable states of nature

An example is given in which agents agree to disagree in a countable space of equiprobable states of nature. Even in this unorthodox setting, if the sets of the information partitions are intervals, an agreement theorem holds. A result that describes the margin for disagreement is also obtained.     

Knowledge spillovers: cooperation between universities and KIBS

Knowledge is increasingly perceived as a fulcral factor to company competitiveness. As the transfer of knowledge is one of the key functions of knowledge intensive business services (KIBS), this research seeks to analyse how the transfer of knowledge takes place between the higher education sector and KIBS type firms. The empirical results show that cooperation between KIBS and universities occurs irrespective of the typology (whether professional or technological in focus). We also empirically establish how geographic proximity is the factor bearing greatest influence over cooperation while such cooperation proves to have a positive impact on the company capacity to innovate. We furthermore find that this innovation capacity also drives a positive company financial performance.     

Wellbeing and flow in sample of male and female office workers

The paper examines research into wellbeing and flow, considered as enjoyable challenging experiences. A questionnaire study is reported of the association between wellbeing in both work and leisure and flow in a sample of male and female office workers. Based on previous research it is hypothesized that flow is associated with wellbeing; flow is experienced more in work than in leisure; gender differences occur in the activities which give rise to flow. The results support all three hypotheses. The importance of flow for wellbeing is discussed, and a critique of the concept flow is presented. While the complex nature of the concept of quality of life is recognized, it is concluded that research into flow and wellbeing is important.     

The Impact of Visitor Behavior on the Environmental Protection of Tourist Farms in Guangdong

Some tourist farms established in the Chinese province of Guangdong suffer from a dearth of farm management and a lack of awareness of environmental protection issues among visitors, leading to pollution problems in farm tourism. The study reported in this paper examined how the managers of two farms protect the natural environment using the setting factors of physical orientation, interactive exhibits and the presence of tour guides, following the mindfulness and mindlessness model. The findings of the study revealed that the quality of the natural environment in both farms was acceptable, indicating the effectiveness of the setting factors. However, it was found that some signs were discolored and broken, there were insufficient interactive exhibits, and no tour guide service was available for individual visitors. Based on these findings, some recommendations are offered for farm managers on how to protect the natural environment.     

Pricing and static hedging of European-style double barrier options under the jump to default extended CEV model

This paper develops two novel methodologies for pricing and hedging European-style barrier option contracts under the jump to default extended constant elasticity of variance (JDCEV) model, namely: a stopping time approach based on the first passage time densities of the underlying asset price process through the barrier levels; and a static hedging portfolio approach in which the barrier option is replicated by a portfolio of plain-vanilla and binary options. In doing so, both valuation methodologies are extended to a more general set-up accommodating endogenous bankruptcy, time-dependent barriers and the commonly observed stylized facts of a positive link between default and equity volatility and of a negative link between volatility and stock price. The two proposed numerical methods are shown to be accurate, easy to implement and efficient under both the JDCEV model and the nested constant elasticity of variance model.     

Extending the Principles of Intensive Writing to Large Macroeconomics Classes

The authors report on the design and implementation of a pilot program to extend the principles of intensive writing outlined by W. Lee Hansen (1998), Murray S. Simpson and Shireen E. Carroll (1999) and David Carless (2006) to large macroeconomics classes. The key aspect of this program was its collaborative nature, with staff from two specialist units joining forces with two economics instructors to provide students with significant resources and direction in a short program of writing, embedded within an intermediate macroeconomics subject at the University of Technology, Sydney (UTS). The objective was to test potential strategies and to identify points of improvement for a more intensive program of writing development at the next stage of implementation. The authors review the literature on student writing and associated assessment issues, outline the central design features of the UTS program, and take a closer look at the centerpiece of a strategy for overcoming writing problems: a series of writing workshops targeted at two related assignments within the intermediate macroeconomics course.