Subsidy competition and imperfect labor markets

This study presents a two‐country model of subsidy competition for manufacturing firms under labor market imperfections. Because subsidies affect the distribution of firms, subsidies influence unemployment rates and welfare in both countries. We show that when labor market frictions are high, subsidy competition is beneficial, although subsidies under subsidy competition are inefficiently high. In the coordinated equilibrium, the supranational authority provides a subsidy to firms that equal the expected total search costs, which increases the number of firms relative to laissez‐faire and improves welfare relative to laissez‐faire and subsidy competition. Finally, we find that a rise in a country's labor market frictions raises the equilibrium subsidy rate, affects unemployment rates, and lowers welfare.     

A Conceptual Framework for Understanding the Effects of Corporate Social Marketing on Consumer Behavior

This theoretical paper develops a conceptual framework that explains how companies can influence consumer behavior in terms of both social and business benefits through their corporate social marketing (CSM) initiatives. Drawing from the source credibility literature, the article asserts that the effectiveness of CSM depends largely on the corporate credibility of a company in supporting a social cause (“CSM credibility”). Based on this assertion, the framework identifies ten different antecedents of CSM credibility, which are organized into (1) attributes of the company, (2) attributes of the CSM initiative, and (3) attributes of the cause. Furthermore, this framework shows that CSM credibility affects the two examined consequences, intended prosocial behavior and consumer loyalty. Several research and managerial implications are developed based on the propositions specified in the framework.     

Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries

Although the stakeholder framework proposes the multidimensionality of corporate social responsibility (CSR) (Clarkson, 1995), previous research has yet to investigate the relationship between certain dimensions of CSR and corporate financial performance (CFP) in tourism-related industries. The purpose of this study was to disaggregate CSR into five dimensions based on corporate voluntary activities for five primary stakeholder issues: (1) employee relations, (2) product quality, (3) community relations, (4) environmental issues, and (5) diversity issues, and examine how each dimension would affect financial performance among firms within four tourism-related industries (airline, casino, hotel, and restaurant). While all CSR dimensions were proposed to have positive financial effects, results revealed that each dimension had a differential effect on both short-term and future profitability and that such financial impacts varied across the four industries. The findings can provide tourism managers with insights into which dimensions of CSR activities would improve their companies’ financial performance.     

Response of double-auction markets to instantaneous Selling�CBuying signals with stochastic Bid�CAsk spread

Statistical properties of order-driven double-auction markets with Bid–Ask spread are investigated through the dynamical quantities such as response function. We first attempt to utilize the so-called Madhavan–Richardson–Roomans model (MRR for short) to simulate the stochastic process of the price-change in empirical data sets (say, EUR/JPY or USD/JPY exchange rates) in which the Bid–Ask spread fluctuates in time. We find that the MRR theory apparently fails to simulate so much as the qualitative behaviour (‘non-monotonic’ behaviour) of the response function R(l) (l denotes the difference of times at which the response function is evaluated) calculated from the data. Especially, we confirm that the stochastic nature of the Bid–Ask spread causes apparent deviations from a linear relationship between the R(l) and the auto-correlation function C(l), namely, R(l) μ -C(l){R(l) \propto -C(l)}. To make the microscopic model of double-auction markets having stochastic Bid–Ask spread, we use the minority game with a finite market history length and find numerically that appropriate extension of the game shows quite similar behaviour of the response function to the empirical evidence. We also reveal that the minority game modeling with the adaptive (‘annealed’) look-up table reproduces the non-linear relationship R(l) μ -f(C(l)){R(l) \propto -f(C(l))} (f(x) stands for a non-linear function leading to ‘λ-shapes’) more effectively than the fixed (‘quenched’) look-up table does.     

Dynamic Patterns of Trade Imbalances with Recursive Preference

Based on the recursive preference approach, the dynamic and global properties of the two‐country open economy are examined with one good and inputs of labor and capital, with capital being freely traded internationally. First, by showing that the world's consumption increases (decreases) with an increase (decrease) in the world's capital, the global stability of the economy is obtained. Secondly, the nonmonotonicity of consumption between impatient country 1 and patient country 2 is established. Thirdly, with the Cobb–Douglas‐type production function and country 1's technological superiority, the dynamic trade patterns and the asset–debt position are derived.     

The Optimal Tariff Formula in a Two-Period Economy

The optimal tariff formula is derived for a large country trading both consumption goods and an investment good in a two-period economy. The formula greatly simplifies the results of the standard one-period economy where both consumption goods and real capital are traded with or without a non-traded good; in particular, the results do not depend on the relative intensities of the two goods.
JEL Classification Numbers: D11, F11, F34.     

Assessment of passenger benefits brought about by international airport projects

This study sets forth a method to calculate the passenger benefits of an international airport project and assesses the passenger benefits brought about by two international airport projects.An international airport project mainly increases the number of flights and the possibility of determining convenient timetables. It does not significantly decrease the flight time of international travel. Thus, the user benefits brought about by an international airport project cannot be expressed by the conventional concept of ‘traveling time’, which is the term generally used.In this study, the ‘Expected Value of Traveling Time’ and ‘Expected Value of Generalized Cost’ are presented as indexes to evaluate improvements in convenience brought about by international airport projects. The passenger benefits of two airport projects in Japan are measured by consumer surplus calculated from the demand function using these indexes.These indexes are accurately calculated taking into consideration factors such as scheduling connections between domestic and international transport, and so enable a grasp not only of reductions in flight time, but also of passenger benefits resulting from international airport projects, such as increases in the number of flights and reductions in the time required to make transfers during domestic travel.     

The Choice of Accounting Policy In Japan

The purpose of this study is to investigate factors which potentially influence Japanese managers' choices of accounting policies. Several factors have been posed to affect the choice of accounting policy of U.S. managers (e.g., Watts and Zimmerman's (1986) positive accounting theory). However, the general business characteristics of the U.S. environment differ, sometimes drastically, from those in Japan. Factors affecting the choice of accounting policy in the U.S. may not similarly affect the choice of accounting policy in Japan. At the same time, new factors may be identified in the Japanese business environment.
Income strategy models are developed for each firm according to the type (income increasing or income decreasing) of accounting policies employed. The results suggest that both the size and debt/equity hypotheses are significant, even for keiretsu firms. These results are surprising given (1) the close relationship between firms and the government, (2) regulations of the commercial code which serve to protect the interests of debtholders, and (3) the tight relationship between banks and firms within keiretsu groups which protects firms from bankruptcy and takeover. Variables representing firms' effective tax rate, ability to finance operations internally, and foreign political costs are also shown to significantly affect Japanese managers' choices of accounting policy. The bonus hypothesis is not significant in the Japanese environment. Furthermore, the choice of accounting policy is explained more by individual firm characteristics than by keiretsu membership or industry membership.