Are exchange rates less important for trade in a more globalized world? Evidence for the new EU members

We evaluate the effect of exchange rate misalignments on the balance of trade and the role that global value chain participation plays in this effect for 11 new European Union member states. Using heterogeneous panel cointegration methods, we first estimate the real equilibrium exchange rate and detect episodes of currency misalignment. We find asymmetric effects of real currency misalignments: overvaluation has a negative effect, but undervaluation has no effect on the trade balance. Additionally, we find that global value chain participation weakens the effect of currency misalignments on the balance of trade. Therefore, our results suggest that globalization reduces the role of exchange rates in stimulating the domestic economy.     

Is small beautiful? Size effects of volatility spillovers for firm performance and exchange rates in tourism

This paper examines the size effects of volatility spillovers for firm performance and exchange rates with asymmetry in the Taiwan tourism industry. The analysis is based on two conditional multivariate models, BEKK–AGARCH and VARMA–AGARCH, in the volatility specification. Daily data from 1 July 2008 to 29 June 2012 for 999 firms are used, which covers the Global Financial Crisis. The empirical findings indicate that there are size effects on volatility spillovers from the exchange rate to firm performance. Specifically, the risk for firm size has different effects from the three leading tourism sources to Taiwan, namely USA, Japan, and China. Furthermore, all the return series reveal quite high volatility spillovers (at over 60%) with a one-period lag. The empirical results show a negative correlation between exchange rate returns and stock returns. However, the asymmetric effect of the shock is ambiguous, owing to conflicts in the significance and signs of the asymmetry effect in the two estimated multivariate GARCH models. The empirical findings provide financial managers with a better understanding of how firm size is related to financial performance, risk and portfolio management strategies that can be used in practice.     

Too similar to combine? On negative weights in forecast combination

This paper provides the first thorough investigation of the negative weights that can emerge when combining forecasts. The usual practice in the literature is to consider only convex combinations and ignore or trim negative weights, i.e., set them to zero. This default strategy has its merits, but it is not optimal. We study the problem from various angles, and the main conclusion is that negative weights emerge when highly correlated forecasts with similar variances are combined. In this situation, the estimated weights have large variances, and trimming reduces the variance of the weights and improves the combined forecast. The threshold of zero is arbitrary and can be improved. We propose an optimal trimming threshold, i.e., an additional tuning parameter to improve forecasting performance. The effects of optimal trimming are demonstrated in simulations. In the empirical example using the European Central Bank Survey of Professional Forecasters, we find that the new strategy performs exceptionally well and can deliver improvements of more than 10% for inflation, up to 20% for GDP growth, and more than 20% for unemployment forecasts relative to the equal-weight benchmark.     

Is human and financial investment in Chinese universities effective?

To obtain high-quality human resources and to gain advantages in the context of global competition, countries are constantly promoting the development of higher education. Enormous human and financial resources were invested in this “battle”. However, the “inputs” consumed by universities are largely ignored. A major issue, evaluating how well a country's universities make use of input resources in their output path, is of economic and social significance. The focus of this study is to embed the concept of capacity utilization in education and to assess the university's performance. We construct an attainable output-oriented capacity utilization measurement model by taking into account the heterogeneity of the region. According to the usage of the input, we divide the decision making units into four areas and identify the causes of inefficiency. Thus, the methodology proposed in this study provides policymakers an applicable tool on differences in educational inputs across regions. To illustrate the method, we conduct an empirical analysis using data from 54 universities directly under the Ministry of Education in China.     

Does workplace industrial action increase trade union membership? An exchange relationship approach to union joining and leaving behaviour

This paper investigates the impact of industrial action at the workplace on union membership behaviour, in the form of joining (by non-members) and leaving (by members). It examines the issue from the perspective of exchange relationship theory. It is hypothesised that industrial action deepens the collective social and ideological aspects of exchange relationships and loosens the weaker individualist economic aspects, causing more workers to join than to leave a union. The data set comprises survey responses of random samples of individual workers continuously employed in the same workplace and collected at two points in time. Logistic regression is employed to analyse the data. The results demonstrate that workplace industrial action is associated with union joining but has no significant effect on members' leaving behaviour. Implications for union organising are discussed.     

Is High Inflation Here to Stay in the UK?

The first decade of monetary policy independence saw a period of low and stable inflation, but over the past six years this has given way to higher, and more volatile, inflation. The increase in inflation rates has both external and domestic origins. Higher commodity prices, in particular food, and rising prices of manufactured goods imported from emerging markets have been important. In both cases the sharp depreciation of the pound in the aftermath of the financial crisis has compounded the impact on the UK. There has also been a marked step upwards in domestic inflationary pressures which has largely come from administered & regulated prices, such as domestic energy prices and university tuition fees. These categories account for just 10% of the inflation basket, but over the past six years they have contributed 0.9ppts to an average CPI inflation rate of 3.1%…     

Is the small-ball strategy effective in winning games? A stochastic frontier production approach

Since the Japanese National Baseball team won the inaugural World Baseball Classic, “small ball” has been accepted, at least by the media, as a mainstream form of baseball management in Korea. Small ball refers to a manager’s active intervention or strategy implementation in baseball games. In general, the frequency of managers’ orders for play actions such as a sacrifice bunt is higher in Asian baseball than in North American baseball. This paper attempts to statistically test the hypothesis that small ball is effective in winning games by using data from Korean baseball. The panel data analysis of a stochastic production frontier model presents somewhat mixed empirical results, but the overall evidence suggests that small ball actually has detrimental effects on the number of runs scored.     

Is It Time to Revisit the Savings Rate Floor in the ECCU?

Member states of the Eastern Caribbean Currency Union (ECCU) experienced a secular decline in growth following the great recession circa 2008, resulting in increased unemployment and social dislocation. Given the ECCU's currency board arrangement and current fiscal challenges, policy options for resuscitating growth are limited to supply‐side adjustments. This paper contends that the 3 per cent interest rate floor on savings deposits has contributed to higher lending rates and lower levels of capital formation. Ultimately it is a drag on growth and a threat to the banking sector's health as it has resulted in reduced risk compensation when default and other banking sector risks have risen. Revisiting the floor is advocated as an integral component of this structural adjustment policy response.     

Is the liberalization policy effective on improving bivariate cointegration of current accounts, foreign exchange, stock prices? Further evidence from Asian markets

This paper fist examines three set of bivariate cointegrations between any two of current accounts, stock markets, and currency exchange markets in 10 Asian countries. Furthermore, this work examined the effect of country characters on this bivariate cointegration. Our findings suggest that for three sets of cointegration test, each sample country at least exists one cointegration. India consistently exhibited a bi-directional causal relationship between any two of three indicators. Unlike Pan et al. (Int Rev Econ Financ 16:503–520, 2007 and Phylaktis and Ravazzolo (J Int Money Financ 24:1031–1053, 2005), this study found that such cointegration is influenced by three characteristics: capital control; flexibility in foreign exchange rates; and the ratio of trade to GDP. These characteristics are the result of liberalization in each Asian country. This implies that liberalization policies are effective on improving the cointegration between any two of financial markets and current account for 10 Asian countries.     

Is the nonlinear hedge of options more effective?—Evidence from the SSE 50 ETF options in China

The linear hedging of the options ignores the characteristic of the nonlinear change of option prices with the underlying asset. This paper establishes the nonlinear hedging strategy followed the study by Hull and White (2017) to investigate the effectiveness on the Shanghai Stock Exchange (SSE) 50 ETF options. The results show that the nonlinear hedge of the Chinese option market is less effective than the U.S option market because of the short history and the lower activity of the Chinese option market. The effect of nonlinear hedging strategy is better than the linear hedging strategy for calls in China. But for puts, the effect of the nonlinear hedging strategy is not as significant as it for calls. The difference in the trading volume between calls and puts and the high short-selling cost in the Chinese market are the main factors leading to the difference in hedge effectiveness. This paper suggests that the stock exchange could reduce margin standard of 50 ETF securities lending, promote a more flexible shorting mechanism, and accelerate the process of index options listed, so as to achieve hedging the risk of options more directly and efficiently.     

Is the doctor in? A relational approach to job design and the coordination of work

When designing jobs, the degree of specialization is a key consideration. Though functional specialization allows workers to develop deep areas of expertise, it also increases the challenge of coordinating their work. In this article, we propose the concepts of stage‐ and site‐based specialization and posit that together they can counteract the divisive effects of functional specialization. Taking advantage of a natural experiment in physician job design at a Massachusetts hospital, we explore the impact of stage‐ and site‐based specialization on coordination and performance outcomes. Building on recent interest in relational approaches to job design, this study is the first to link relational job design to relational outcomes such as coordination. Our findings have practical implications for job design in professional service settings such as education, consulting, and health care. © 2008 Wiley Periodicals, Inc.     

Contract stability in European road infrastructure PPPs: how does governmental PPP support contribute to preventing contract renegotiation?

In the last decade a considerable number of PPP contracts in Europe turned out to be instable and were renegotiated. This paper studies which combinations of conditions in terms of macro-level business environment and governmental PPP support and at project-level (remuneration scheme, risk allocation, project age and contract duration) contribute to avoid contract renegotiation, by conducting a qualitative comparative analysis of twenty five European road infrastructure projects. Results show that although the broader macro-level business environment has a clear contribution, contract stability can benefit from an availability-based remuneration scheme and a well-developed governmental PPP support in combination with other conditions.     

Incentives and Selection in Promotion Contests: Is It Possible to Kill Two Birds with One Stone?

This paper investigates whether a designer can improve both the incentive provision and the selection performance of a promotion contest by making the competition more (or less) dynamic. A comparison of static (one‐stage) and dynamic (two‐stage) contests reveals that this is not the case. A structural change that improves the performance in one dimension leads to a deterioration in the other dimension. This suggests that modifications of the contest structure are an alternative to strategic handicaps. A key advantage of structural handicaps over participant‐specific ones is that the implementation of the former does not require prior identification of worker types. Copyright © 2014 John Wiley & Sons, Ltd.     

Is Improving Access to University Enough? Socio‐Economic Gaps in the Earnings of English Graduates

Much research and policy attention has been on socio‐economic gaps in participation at university, but less attention has been paid to socio‐economic gaps in graduates’ earnings. This paper addresses this shortfall using tax and student loan administrative data to investigate the variation in earnings of English graduates by socio‐economic background. We find that graduates from higher income families (with median income of around 77,000) have average earnings which are 20% higher than those from lower income families (with median income of around £26,000). Once we condition on institution and subject choices, this premium roughly halves, to around 10%. The premium grows with age and is larger for men, in particular for men at the most selective universities. We estimate the extent to which different institutions and subjects appear to deliver good earnings for relatively less well off students, highlighting the strong performance of medicine, economics, law, business, engineering, technology and computer science, as well as the prominent London‐based universities.     

Is Normal Distribution due to Karl Gauss? Euler,his Family of Gamma Functions,and Place in History of Statistics

While Gauss (1777–1855) has primacy in explicating properties of the normal distribution, it is Euler (1707–1783) who is predominant with respect to analytical formulation of this function. This case is discussed within the context of uniform rendering of computer algorithms for higher transcendental functions.     

Is there a bigger and better future for employer branding? Facing up to innovation,corporate reputations and wicked problems in SHRM

Employer branding is becoming an increasingly important topic for research and practice in multinational enterprises (MNEs) because it plays directly into their corporate reputation, talent management and employee engagement agendas. In this paper, we argue that the potential effects of employer branding have yet to be fully understood because current theory and practice have failed to connect this internal application of marketing and branding to the key reputational and innovation agendas of MNEs, both of which are at the heart of another strategic agenda – effective corporate governance. However, these agendas are characterised by ‘wicked problems’ in MNEs, which have their origins in competing logics in strategic human resource management (SHRM). These problems need to be articulated and understood before they can be addressed. This paper proceeds by (1) setting out a definition and model of employer branding and how it potentially articulates with corporate governance, innovation and organisational reputations, (2) discussing and analysing the ‘wicked problems’ resulting from the sometimes contradictory logics underpinning innovation and corporate reputations and SHRM in MNEs and (3) evaluating the potential of employer branding as a contribution to the third SHRM approach – HR strategy-in-action – as a way of resolving three particularly wicked problems in MNEs. We conclude with some ideas for research and practice on the future for employer branding.