Why you should use high frequency data to test the impact of exchange rate on trade

This study suggests that testing the impact of exchange rate on trade should be done using high-frequency data. Using different data frequencies for identical periods and specifications between the US and Canada, we show that low-frequency data might suppress and distort the evidence of the impact of exchange rate on trade in the short run and the long run.     

Affordable and middle-class housing on Johannesburg's mining sites: a cost–benefit analysis

This paper examines the redevelopment of former gold mining land close to the downtown area of Johannesburg for affordable and middle-income housing. This could provide savings for out-of-pocket costs, time saving for commuting costs and better property appreciation. However, the properties may be costly to remediate and may still pose some health risks from exposure to radon. A cost–benefit analysis examined these issues from the perspective of the home occupant. The present value of the net benefits over a 20-year study period indicated very positive cost–benefit ratios, in excess of five units of benefit for each unit of cost, suggesting that the affordable and middle-income housing markets would see the area as desirable, could price the additional risk and would accept housing modified to reduce the potential health risks. The policy implications supported the release of former mining land for housing on a careful case-by-case basis.     

How did wars dampen trade in the MENA region?

The article investigates the impact of wars on trade in the Middle East and North African region. Using an augmented gravity model that controls for the endogeneity problem in our estimation, we introduce a war variable and distinguish between different types of conflicts. The results show that wars have a significantly negative impact on exports, imports and trade. Civil conflicts hinder exports, imports and trade significantly. The disaggregated version of the gravity model shows that non-state conflicts have a detrimental effect on bilateral trade flows in manufacturing, and that none of the conflicts do affect trade in services. We also find that, on average, a conflict is equivalent to a tariff of 5% of the value of trade.     

Perceptions of the ethicality of favors at work in Asia: An 11-society assessment

We explore macro-level factors that shape perceptions of the ethicality of favors in Asian workplaces using the subordinate influence ethics (SIE) measure. We also expand and use the crossvergence model to examine the cross-level relationship between socio-cultural (i.e., traditional/secular; survival/self-expression; in-group favoritism) and business ideology influences (i.e., human development level, control of corruption) on perceptions of favor-seeking at work. This study examines the perceptions of a total of 4,325 managers and professionals in a diverse set of 11 Asian societies: China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Our investigation focuses on both the “softer” (image management) and “harder” (self-serving) sides of subordinate influence attempts to seek favors, as well as the degree of ethical differentiation across these societies. Key results based on hierarchical linear modeling (HLM) suggest that both the World Value Survey’s socio-cultural values as well as in-group favoritism contribute to our understanding of influence behaviors in Asia. Likewise, level of human development and control of corruption also appear to be promising predictors of influence ethics. In sum, our results suggest that widening the scope of the crossvergence conceptualization of socio-cultural and business ideology influences engender a better understanding of differences in attitudes toward subordinate use of favoritism across Asian societies.     

Insider trading with product differentiation

This paper investigates the effect of product differentiation on the real and financial decisions of a publicly-owned firm, competing $\grave{a}$ la Cournot with another privately-owned firm. The results show that the degree of product differentiation affects the stock price coefficients (i.e. the market maker’s response to the real signal and to the total order flow signal) and the output of the publicly-owned firm. It also appears to have a detrimental effect on the manager’s profits and compensation scheme. The paper then proposes an extension of the benchmark model to incorporate Cournot and Stackelberg competition between two insiders in the financial market. The type of the financial competition adopted has also an effect on the results of the benchmark model that sometimes depend on the degree of product differentiation.     

Insider trading in a two-tier real market structure model

This paper investigates the real and financial effects of insider trading in the spirit of Jain and Mirman (2000). Unlike the existing literature, the production of one real good is costly and depends mainly on the price of an intermediate good produced locally by a privately owned firm. The results show that the output level of the final good chosen by the insider as well as the price of the intermediate good set by the privately owned firm are both higher than it would be in the absence of insider trading. Furthermore, the parameters of both real markets affect the stock price. Next, a second insider, operating in the firm producing the final good, is added to the benchmark model. Competition among insiders decreases the production of the final good by the publicly owned firm and the price of the intermediate good with respect to the benchmark model. Moreover, it affects the insiders’ trades and increases the amount of information revealed in the stock price.     

On the determinants of trade in services: evidence from the MENA region

This article examines the determinants of aggregate flows of service trade in MENA countries using an adapted version of the gravity model and a panel data set covering the 2000 to 2009 period for 21 countries and 10 sectors. A new determinant of trade performance is introduced: the number of bound commitments undertaken by a sector in the WTO as well as the availability of those commitments by mode of supply. The results show that being a WTO member boosts trade in services. In addition, the number of bound commitments increases exports, imports and trade in services. This positive and significant effect remains robust even after controlling for several econometric issues, namely, the selection bias related to the WTO membership and the endogeneity of commitments.¹1. We are grateful to the editor Mark Taylor and two anonymous referees for providing valuable comments and suggestions. We would also like to thank the participants to the ERF 18th Annual Conference and to the 32nd Annual Meeting of the Middle East Economic Association (MEEA). This work benefited from the financial support of Economics Research Forum (ERF). It does not reflect the Forum’s opinion.     

Illuminating the ‘Face’ of Justice: A Meta‐Analytic Examination of Leadership and Organizational Justice

A significant body of research has described effective leader behaviours and has connected these behaviours to positive employee outcomes. However, this research has yet to be systematically integrated with organizational justice research to describe how leader behaviours inform justice perceptions. Therefore, we conduct a meta‐analysis (k = 166, N = 46,034) to investigate how three types of leader behaviours (task, relational, and change) inform four dimensions of organizational justice (procedural, distributive, interpersonal, and informational) referenced to the leader and to the organization. Further, we examine the joint impact of leader behaviours and justice perceptions on social exchange quality (i.e., leader–member exchange), task performance, and job satisfaction. Our results suggest that leader behaviours differentially inform leader‐ and organization‐focused justice perceptions, and the joint effect of leader behaviours and justice perceptions offer more nuanced explanations for outcomes.