Consumers' perception of and attitudes towards organic food in Galicia (Northern Spain)

Although the organic sector is still relatively small, the demand for organic food is increasing throughout the world. The characterization of consumers' perception of and attitudes towards organic food is important to enable the development of marketing policies aimed at attracting conventional consumers to the sector. Consumers' behaviour studies must be conducted specifically for different regions and countries as perceptions and attitudes vary across the world. In the present study, a questionnaire was designed for administration to consumers in Galicia (Northern Spain). The questionnaire was administered to 830 consumers in 200 establishments to obtain data about the consumers' perception of and attitudes towards organic food. The survey results showed that one‐third of responders consume organic food and that the typical profile of a consumer of organic food is a middle‐aged, medium‐high class, university‐educated female living in a large village, who shops in supermarkets and preferably consume vegetables, fruits and eggs. Most people who declared that they consume organic products confuse these with home and locally produced food, indicating the potential for growth of the organic sector by providing such consumers with appropriate information. Most consumers (including conventional consumers) have a good opinion of organic food and consider that it is better for health, is of better quality than conventional food and avoid pesticide residues. However, price continues to be a barrier to the consumption of organic produce. Most respondents stated that they would consume more organic food if the price was only between 10% and 30% higher than the conventional equivalent. Finally, organic consumers in Galicia showed positive attitudes towards using local breeds in organic agriculture, both for producing food and for ecotourism and educational activities. Such activities could contribute to conserving breed biodiversity and adding value to organic farming.     

Dairy Trade Liberalization Impacts in Canada

Supply management in Canada is facing broad trade liberalization pressures. This paper uses a spatial equilibrium trade model to simulate the impacts of various trade liberalization scenarios in the Canadian dairy industry. The results critically hinge on the relationship between increased market access and the market sharing quota (MSQ) at the farm level. Two different MSQ decision rules are simulated: (i) global output at the farm level remains unchanged following liberalization; and (ii) the MSQ is reduced to support the unit production quota rent at its preliberalization level. The results show that if the MSQ is held constant following a potential compromise in the Doha Round, retail prices of fluid milk and cheese would decrease by about 5%. These price movements can be negated by a 1.4% cut in the global MSQ at the farm level. Net welfare gains in the Canadian dairy sector following market access reforms range between $48.2 and $64.2 million when evaluated at the 2003–04 world prices. Le courant de libéralisation des échanges crée une certaine pression sur les programmes de gestion de l'offre au Canada. Ce papier présente un modèle de commerce en équilibre spatial afin de simuler les effets de différents scénarios de libéralisation des échanges sur l'industrie laitière canadienne. Les résultats dépendent fortement de la relation entre amélioration de l'accès au marché et quota de mise en marché (QMM). Deux différentes règles de décision du QMM sont simulées : i) la production globale est inchangée après la libéralisation ; et ii) le QMM est réduit afin d'assurer une rente de quota par unité de production identique à son niveau de pré‐libéralisation. Les résultats associés à un compromis potentiel dans le cadre du Cycle de Doha indiquent que les prix au détail du lait de consommation et du fromage diminueraient d'environ 5% si le QMM demeure constant. En revanche, les variations de prix seraient nulles si le QMM est réduit de 1.4%. Suivant les scénarios de libéralisation des échanges considérés, le gain net pour l'industrie laitière canadienne serait compris entre 48.2 et 64.2 millions de dollars, lorsqu'évalué aux prix mondiaux de 2003/2004.     

Monetary transmission right from the start: On the information content of the Eurosystem's main refinancing operations

The Eurosystem's main refinancing operations (MROs) are key for the interbank money market and the monetary transmission process in the euro area. This paper investigates how money market rates respond to the information revealed by various aspects of an MRO auction outcome. Our results confirm that the level of MRO rates governed short-term money market rates before the financial crisis. Since the start of the financial crisis, however, the information content of MRO rates has changed. While the levels of MRO rates have lost much of their pre-crisis significance, the spread between the weighted average and the marginal MRO rate has become an important barometer for the actual situation in the money market during the crisis.     

The effectiveness of monetary policy in steering money market rates during the financial crisis

The financial crisis has deeply affected money markets and thus, potentially, the proper functioning of the interest rate channel of monetary policy transmission. Therefore, we analyze the effectiveness of monetary policy in steering euro area money market rates by looking at (i) the predictability of money market rates on the basis of monetary policy expectations and (ii) the impact of extraordinary central bank measures on money market rates. We find that during the crisis money market rates up to 12 months still respond to revisions in the expected path of future rates, even though to a lesser extent than before August 2007. We attribute part of the loss in monetary policy effectiveness to money market rates being driven by higher liquidity premia and increased uncertainty about future interest rates. Our results also indicate that the ECB’s non-standard monetary policy measures as of October 2008 were effective in addressing the disruptions in the euro area money market. In fact, our estimates suggest that non-standard monetary policy measures helped to lower Euribor rates by more than 80 basis points. These findings show that central banks have effective tools at hand to conduct monetary policy in times of crises.     

Industry influence on firms' R&D and innovation

This paper examines the effect of peers on a firm's research and development (R&D) policy. We show that firms do not make R&D decisions in isolation, and that industry dynamics play an important role in defining a firm's R&D intensity. Using a large sample of 54,393 firm-year observations from 1991 to 2015 in the United States, we find that firms' R&D decisions are mainly driven by their industry peers' R&D policies. Moreover, we find that R&D mimicking is significant only in the presence of strong product market competition, whereas we do not find any evidence of information-based herding in R&D investments. Our additional analysis shows that our main conclusions remain valid even in the presence of financial constraints, and regardless of the firms' market positions. Finally, we provide evidence that R&D mimicking increases firms' future values, future patent outputs, and estimated patent dollar values. Our findings are robust to endogeneity concerns, and to using alternative sample compositions, R&D intensity proxies, and different industry classifications.     

Regime switching in the reactions of stock markets in Saudi Arabia to oil price variations

The study revisits the stock–oil nexus by examining the reactions of equity markets to oil price shocks at national and sectoral levels for Saudi Arabia in a time‐varying framework by employing the Markov switching EGARCH model developed by Henry (2009, Journal of Banking and Finance, 33, 405). Based on weekly data, the findings reveal that the behaviour of all stock markets switches between an expansion regime and a recession regime, with more persistence for the expansion state. Additionally, influential international events associated with stock market drops are clearly identified in the recession regime. Furthermore, there is evidence of asymmetric reactions of the equity index returns and the probabilities of transition from one state to another to oil price variations, with heterogeneous impacts across sectors and regimes. The stock markets are more sensitive to oil price decreases than to oil price increases. Although the evidence of relatively slight differences in some findings across weekdays, the study allows investors and policymakers to understand well the interactions of stock sector markets vis‐à‐vis the world oil market in a regime‐switching framework, in order to make the right decision as regards portfolio diversification and regulation of the stock markets.