The impact of infrastructure investments on income inequality: Evidence from US states

Our analysis of US state-level data on an annual frequency, from 1976 to 2008, sheds new light on a plausible causal link between infrastructure investments, namely public spending on highways, and income inequality. This causal relationship is drawn out using the number of seats in the US House of Representatives Committee on Appropriations (HRCA) as an instrument to identify quasi-random variations in state-level spending on highways. An exogenous pattern which emerges when a state gains an additional member to the HRCA is that it is allocated with new federal grants. This increase in federal transfers for infrastructure financing results in slashing of expenditures on highways and a crowding-out effect of federal funding for state investments on highways. Spending cuts on highways produced by a new HRCA member being attained by a state can unwittingly cause income inequality to rise over a short 2-year time horizon. Similar challenges with decentralized development to finance infrastructure via federal transfers to state and sub-national governments may be encountered by other industrially advanced, emerging and low-income developing economies. US data over the mentioned period reveal a strong positive correlation with state spending on highways and wages paid for construction jobs. Suggestive evidence indicates that the construction sector also plays an important role in the transmission channel from a rise in state spending on highways to lowering income inequality, albeit during specific intervals, as opposed to on a long-term basis.     

Attributes influencing clothing store choice for an emerging market’s Generation Y Twixter customers

The aim of this paper was to determine the key attributes influencing a sub-segment of Generation Y, the Twixters’ choice of clothing retailers in South Africa, an emerging market. Generation Y has been identified as an important segment particularly for apparel and the Twixter sub-group comprises a third of the segment. Using a positioning theory lens, retailers need to understand the attributes a target market finds important as stores are positioned in consumers’ minds on those attributes. The study therefore sought to determine what these Twixters consider to be important attributes in their clothing store selection. The study comprised two stages; a qualitative stage based on focus group discussion data in which the attributes were determined, discussed and defined, and a quantitative stage, which involved a survey administered to 368 Twixter respondents which determined the relative importance of the attributes to Twixters in their clothing store selection. The results reveal that these Twixters appreciate the price–quality relationship and prefer clothing stores which provide high quality, unique and fashionable merchandise that meets their value for money requirements. The results of the study, although not generalisable, provide noteworthy insight for clothing store and apparel marketers targeting these Generation Y customers.     

Return and Volatility Transmission in U.S. Housing Markets

This article uses the Case‐Shiller U.S. Home Price Indices to analyze spatial dependencies across 16 metropolitan markets for the period January 1989 to June 2006. Return transmission patterns establish New York, San Francisco and Miami as among the most influential markets. In terms of volatility linkages, there is a considerable amount of transmission in the East between New York, Boston and Washington, DC, and innovations in the housing markets of Miami, Los Angeles and San Francisco play an influential role within their respective regions. In comparison, markets in the Central and Mountain regions appear to be relatively independent from external influences. Overall, the linkages appear to be more intensive during the active phase of the real estate market (1999–2006) than during the calm phase (1989–1998).     

The Perils of Pollyanna: Development of the Over-Trust Construct

Management scholars and practitioners often believe that individuals and organizations benefit by trusting their work contacts. (Husted, 1998; Sonnenberg, 1994) Trust is generally viewed as “good” and imperative to a modern functioning economy (Blau, 1964; Hosmer, 1995; Zucker, 1986) Consequently, scholars and practitioners have given scant attention to the “downside” of trust, despite the fact that trust involves taking risk under conditions of uncertainty (Rousseau et al., 1998) Recent corporate scandals show that people suffer when they misplace trust in untrustworthy organizations and individuals. This paper develops a model of the causes and consequences of “over-trust,” which we define as a state where a trustor’s trust exceeds that which is warranted given the conditions. The antecedents of overtrust related to characteristics of the trustee, the trustor, and situational characteristics. We examine the role played by self-monitoring and perceived power base of the trustee as two key trustee characteristics. Among trustor characteristics, we examine the role (played by trustor’s core evaluation, core values). based on cultural affiliation), prior experiences with trustees, and use of habitual thinking behavior. Under characteristics of the situation, we examine the role played by uncertainty inherent in the situation, perceived threat from the context, degree of task interdependence, and organizational systems and routines. Next, we examine three consequences of over-trust – leniency in judging the trustee, delay in perceiving exploitation, and increased risk-taking. We conclude our paper by developing a set of guidelines that organizational members may employ to avoid over-trust.     

Customers’ perspectives regarding e-banking in an emerging economy

Determining factors affecting customer perception and attitude towards and satisfaction with e-banking is an essential part of a bank's strategy formulation process in an emerging economy like India. To gain this understanding in respect of Indian customers, the study was conducted on respondents taken from the northern part of India. The major findings depict that customers are influenced in their usage of e-banking services by the kind of account they hold, their age and profession, attach highest degree of usefulness to balance enquiry service among e-banking services, consider security & trust most important in affecting their satisfaction level and find slow transaction speed the most frequently faced problem while using e-banking.     

Return distributions and volatility forecasting in metal futures markets: Evidence from gold,silver, and copper

The characterization of return distributions and forecast of asset‐price variability play a critical role in the study of financial markets. This study estimates four measures of integrated volatility—daily absolute returns, realized volatility, realized bipower volatility, and integrated volatility via Fourier transformation (IVFT)—for gold, silver, and copper by using high‐frequency data for the period 1999 through 2008. The distributional properties are investigated by applying recently developed jump detection procedures and by constructing financial‐time return series. The predictive ability of a GARCH (1,1) forecasting model that uses various volatility measures is also examined. Three important findings are reported. First, the magnitude of the IVFT volatility estimate is the greatest among the four volatility measures. Second, the return distributions of the three markets are not normal. However, when returns are standardized by IVFT and realized volatility, the corresponding return distributions bear closer resemblance to a normal distribution. Notably, the application of financial‐time sampling technique is helpful in obtaining a normal distribution. Finally, the IVFT and realized volatility proxies produce the smallest forecasting errors, and increasing the time frequency of estimating integrated volatility does not necessarily improve forecast accuracy. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark 31:55–80, 2011     

The Association Between Investment Opportunity Set Proxies and Realized Growth

Realized growth can be viewed as a proxy for the unobservable investment opportunity set (IOS) of the firm, and provides a benchmark against which IOS proxy variables can be compared. Results from such a comparison indicate that many of the variables from earlier studies, including book-to-market measures and capital expenditure to assets ratios are consistently correlated with subsequently realized growth. However, R&D intensity and E/P ratios do not exhibit any consistent association with subsequent growth indicating that they may not be valid IOS proxies.     

A Note on the Relationship between Firm Diversification and Corporate Advertising Expenditures

Using data on 200 major U.S. advertisers, our empirical analysis examines the relationship between the degree of firm diversification and corporate advertising expenditures, while controlling for competing explanations. Data on corporate advertising expenditures are obtained from Leading National Advertisers (1989). Compustat line of business data and Hoover's Handbook are used to construct measures of firm diversification, and other firm/industry characteristics included as covariates in our empirical analysis to account for possible alternative explanations. Our results suggest that less diversified firms spend more on corporate advertising.