The dynamic effects of a currency union on trade

The response of trade to a monetary union is a dynamic process. An empirical study of the European monetary union finds that the extensive margin of trade in new goods responded several years ahead of EMU implementation and ahead of overall trade volume. A dynamic rational expectations trade model shows that early entry of new firms in anticipation is explainable as a rational forward-looking response to news. The model helps identify which types of trading frictions are reduced by a currency union, and shows how new entry can be affected by uncertainty about EMU.     

Forecasting China's inflation in a data-rich environment

Inflation is one of the most recent critical issues facing China. To improve inflation forecasts within China, this study investigates the predictive ability of three dimension reduction techniques used in a data-rich environment: Principal Components Analysis (PCA), Sliced Inverse Regression (SIR), and Partial Least Squares (PLS) applied in the Factor-Augmented Autoregression (FAAR) model proposed by Stock and Watson (2005). Varied macroeconomic data from China between January 1998 and December 2009 are obtained to construct factors for use by three different techniques. The performance of different dimension reduction methods depends on forecasting horizons, the number of factors chosen, and the number of slices for SIR. The empirical study finds that the FAAR model with an optimal number of PCA factors outperforms the other model in out-of-sample inflation forecasting in China.     

From mandatory to voluntary: consumer cooperation and citizenship behaviour

Customer participation of mandatory (ensuring the completion of a service delivery) and voluntary behaviours (achieving the optimal results of the service) influence the outcomes of service organizations. This study examines how service firms transform from coproduction to cocreation in sharing economy by enhancing customer voluntary behaviour through encouraging customer mandatory behaviour. This study explores the mediating effect of perceived value on the mandatory–voluntary relationship, and the driving effect of customer readiness on mandatory behaviour. A total of 181 valid questionnaires were collected from the Taiwanese bed and breakfast sector and analysed by structural equation analysis. The results reveal: (1) the strong impact of customer mandatory behaviour on voluntary behaviour, (2) the partial mediating effect of perceived value on the mandatory-voluntary relationship, and (3) the distinct effects that cooperation has on helping others and word-of-mouth. The findings support the influential roles of customer readiness factors, especially ability, on triggering mandatory behaviour.     

Differences in perception,understanding, and responsiveness of product design between experts and students: an early event-related potentials study

International Journal of Technology and Design Education - This study compares the experts and the novices to investigate their information processing in dealing with the different degrees of...     

An investigation of the mean reversion of hospitality stock prices towards their fundamental values: The case of Taiwan

This paper tested the mean reversion behavior of stock prices in the hospitality and other industry sectors towards their fundamental values, namely earnings per share (EPS) and dividend per share (DPS). Cointegration test results showed that DPS is not a good proxy of fundamental values of stock prices in all sectors, while EPS can serve as a good proxy of fundamental values of stock prices only in the hospitality and construction sectors. Further, although hospitality stock prices have diverged away from their fundamental values from time to time, there exists an error correction mechanism in the market, which adjusts hospitality stock prices to return to their fundamental values. We also found that hospitality stock prices driven by their EPS are due to less noise trading and small size in the hospitality industry. Lastly, empirical findings suggest that hospitality stock investors should pay more attention to the underlying performance of hospitality stocks in terms of their earnings per share.