Oil and stock market activity when prices go up and down: the case of the oil and gas industry

We examine the asymmetric effects of daily oil price changes on equity returns, market betas, oil betas, return variances, and trading volumes for the US oil and gas industry. The responses of stock returns associated with negative changes in oil prices are higher than that associated with positive changes in oil prices. Stock risk measured by market beta is influenced more due to oil price decreases than due to oil price increases. On the other hand, oil risk exposures (oil betas) and return variances are more influenced by oil price increases than oil price decreases. The results of our study indicate that oil and gas firm returns, market betas, oil betas, return variances respond asymmetrically to oil price changes. We also find that relative changes in oil prices along with firm-specific factors such as firm size, ROA, leverage, market-to-book ratio (MBR) are important in determining the effects of oil price changes on oil and gas firms’ returns, risks, and trading volumes.     

Reengineering of materials management system: A case study

A business process reengineering (BPR) project relating to the materials management function of a cement manufacturing plant is presented in this paper. The BPR project evolved out of an organisation development (OD) intervention initiative. Such an intervention aimed at improving value innovation capability of materials management professionals of a large cement manufacturing plant in India. The proposition here is that the value metrics relate to inside-in value innovations in order to deliver inside-out value to the customers in the face of fierce competition in Indian Cement industry. Materials of all types used in a cement plant constitute 60–70% of the total cost and hence the effective operations of procurement and inventory are the critical success factors for strategic value innovations and thereby competitiveness. The primary emphasis in this project was on learning and implementation, by creating an urgency for instilling responsible leadership and building organic partnership through knowledge networking.     

THE COST OF THE U.S. SUGAR PROGRAM REVISITED

The article analyzes the welfare cost of the U.S. sugar program using a multimarket model of U.S. sweetener markets. The latter includes raw crops, sugar extraction and refining, and sweetener users (food-processing industries and final consumers). The authors address the industrial organization of food industries using sweeteners and treat the United States as a large importer. With the removal of the program, this article estimates (all figures in 1999 dollars) that in 1998 cane growers, sugar beet growers, and processors would have lost $307, $650, and $89 million, respectively; sweetener users would have gained $1.9 billion. World prices would have increased by 13.2%. The deadweight loss of the program is estimated at $532 million.     

Accession of the Czech Republic,Hungary and Poland to the European Union: Impacts on Agricultural Markets

We analyse the consequences on agricultural markets of enlargement of the European Union (EU) to include the Czech Republic, Hungary, and Poland. We produce a market outlook up to 2010 for two enlargement scenarios assuming different policy restrictions on grain and dairy production in the acceding countries. Accession of the three Central and Eastern European countries (CEECs) leads to a permanent but moderate decrease in EU prices for most commodities. In the three acceding CEECs, domestic prices increase drastically, final consumption of agricultural products decreases in most instances, while production increases. Higher domestic prices in the CEECs reduce exports of most commodities to non‐union countries. Consequently, excess supplies are placed in stocks or exported to the original 15 member countries. Supply management mechanisms in the dairy and grain sectors would reduce the build‐up of surpluses in the new member states, but limit their ability to take advantage of the expanded market. Accession of the three CEECs would increase the CAP budget over its proposed maximum if area payments are extended to incoming crop producers.     

Visual Metaphors in Ads: The Inverted-U Effects of Incongruity on Processing Pleasure and Ad Effectiveness

ABSTRACT

Ads with visual metaphors are commonplace in advertising, but are characterized by varying degrees of incongruity. Across two experiments, this article presents the first empirical evidence that incongruity in a visual metaphor (VM) ad has an inverted-U (nonlinear) effect on attitude toward the ad. We find that a moderate level of incongruity in a VM ad produces maximal processing pleasure, which in turn yields the most positive attitude toward the ad. The findings confirm that processing pleasure mediates the effects of incongruity on ad attitude. Consequently, when creating ads, advertisers should choose advertising elements to obtain moderate levels of incongruity in the visual figures.     

Distortions of Sino-US and Sino-EU Safeguard Agreements： Effects on World Textile Markets

The effects of Sino‐US and Sino‐EU safeguard agreements on US, Chinese and world cotton and textile sectors are investigated using a partial equilibrium model. The effects are compared to a free trade scenario under the provisions of the Agreement on Textiles and Clothing. The two safeguard agreements capping Chinese textile exports would decrease China's textile and apparel exports, production, and domestic consumption by an average 1.57, 0.63 and 0.32 percent, respectively. The safeguard agreements cause an increase in the US cotton textile price index and a slight decrease in US net textile imports and textile consumption. The agreements cause a decrease in the world cotton price and the quantity of cotton traded, but these trends reverse at safeguard expiration. The results generally support the view that the safeguard agreements forestall the effects of free trade in textiles and apparel rather than creating long lasting shifts in the textile trade.     

Welfare Analysis of the Dominican Republic-Central America-United States Free Trade Agreement: The Cotton Textile and Apparel Industries

This article studies the effects of the Dominican Republic-Central America-United States Free Trade Agreement (US-CAFTA-DR) on the world fiber market using a partial equilibrium modeling approach. We find the effect of the agreement on the U.S. cotton yarn and Caribbean cotton apparel industries to be positive while the U.S. cotton apparel industry suffers significant losses. Cotton apparel producers in the Caribbean region gain approximately $80 million under US-CAFTA-DR while gains by the U.S. yarn industry average about $120 million over current trade arrangements. The U.S. cotton apparel industry loses about $40 million per year under US-CAFTA-DR.     

Changing food consumption patterns in rural and urban Vietnam: Implications for a future food supply system

Rapid income growth and urbanisation could significantly change the composition of the food basket in many emerging economies. This study estimates a demand system, including 15 major food items in Vietnam, with multiyear household survey data. We find a large variation in the estimated price elasticities (–0.05 to –0.88) and expenditure elasticities (–0.16 to 2.56). Food types, urban status and income groups can explain this variation. We also find that the staple food, rice, is already an inferior good for rich urban households in Vietnam. Moreover, food preferences are evolving away from rice but towards animal proteins (fish, pork, chicken, eggs and milk), fruits and vegetables, irrespective of urban status and income groups. As the Vietnam economy continues to grow with a doubling of gross domestic product (GDP) in the next decade, per capita rice consumption in both urban and rural areas and across different income groups will continue to decline, whereas demand for other high‐value products will rise. Thus, government policy should focus on encouraging demand‐oriented food production. In addition, crop diversification at the farm level needs to improve substantially to meet the rising demand for these food products due to income growth and urbanisation.     

Size Does Matter: Technical and Scale Efficiency in Indian State Tax Jurisdictions

Data Envelopment Analysis (DEA) is used to measure tax efficiency in 15Indian states from 1980/81 to 1992/93. Tax efficiency is shown to be conditional on state gross domestic product (SDP), agriculture's share in state SDP,and a poverty index. The considerable remaining efficiency differences areattributable to the small size of some tax jurisdiction rather than to technical inefficiency. Multilateral Malmquist tax indices show that six of the states were consistently efficient, while three were consistently inefficient. Tax efficiency grew at an average annual rate of 3.9% until 1986/87, but growth ceased after that date for all but two states.