Are single stock futures used as an alternative during a short‐selling ban?

The response of the single stock futures (SSF) market to a short‐selling ban is investigated. The hypothesis is that traders use SSF as a substitute instrument for short‐selling. A significant increase in SSF trading activity is documented, accompanied by narrower spreads. SSF market volatility did not react during the ban, which suggests that the increased trading activity did not weaken SSF market quality. The quality of the underlying market during the ban period is also assessed, with the results suggesting that changes in SSF market activity had neither positive nor negative effects on the stocks’ liquidity, volatility, and volume.     

Do High‐Skill Immigrants trigger High‐Quality Trade?

This paper investigates the links between product quality and the pro‐trade effect of ethnic networks using a large panel on bilateral stocks of immigrants with information for 19 OECD destination countries and 177 origin countries. In line with the approach of Rauch and Trindade, we classify traded goods according to their quality level and separately estimate pro‐trade elasticity of ethnic networks for each subgroup. We allow for heterogeneity of immigrants according to both the level of per capita income of their country of origin and their education level. Our findings suggest that the trend of the pro‐trade effect of immigrants over quality seems to be driven by the North–South specialisation across varieties for both supply and demand. Indeed, ethnic networks mostly facilitate imports of those varieties for which their countries of origin have a comparative advantage; as for exports, ethnic networks are more effective in promoting exports to their homeland of those varieties for which there is relatively higher demand. We show that the same trend applies to products characterised by the same degree of differentiation according to the classification proposed by Rauch and – given their lower liquidity constraints and advantages in human capital – we find a greater impact of high‐skilled migrants consistent across all quality levels.     

Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee

Consumers’ buying behavior is not consistent with their positive attitude toward ethical products. In a survey of 808 Belgian respondents, the actual willingness to pay for fair‐trade coffee was measured. It was found that the average price premium that the consumers were willing to pay for a fair‐trade label was 10%. Ten percent of the sample was prepared to pay the current price premium of 27% in Belgium. Fair‐trade lovers (11%) were more idealistic, aged between 31 and 44 years and less “conventional.” Fair‐trade likers (40%) were more idealistic but sociodemographically not significantly different from the average consumer.     

Are environmental social governance equity indices a better choice for investors? An Asian perspective

This article examines the risk and return profiles of stock indices composed of companies meeting environmental, social and governance (ESG) screening criteria [such as the Dow Jones Sustainability Indices (DJSI)] and conventional composite indices of eight Asian countries from 2002 to 2014. The results indicate that there are no significant differences in the returns or risk‐adjusted returns between the ESG indices and the composite indices within countries. The results do reveal that the market volatility of the ESG indices is higher than the market volatility of the conventional indices. Market betas of DJSI and ESG equity indices are significantly lower than betas of the composite equity indices. The overall results indicate that the performance of ESG equity indices of many Asian countries is similar to the performance of conventional indices, suggesting that investors can pursue socially responsible investing objectives without a material difference in portfolio performance from conventional investing.     

Do We Really Need a European Agency for Market Regulation?

In November 2007, the European Commission suggested that an EC regulatory agency should be set up for the telecommunications markets. The following paper examines the key tasks and structure of the proposed agency and identifies the limits to the delegation of powers involved by reflecting on the relevant case law and the existing doctrine. It compares the concept with a recently published rapporteur report to the European Parliament and an alternative model of a joint body of national regulatory authorities. The authors wish to thank Martin Busch, Student of Law and Politics at the University of Bonn, for his valuable assistance.     

Manual dishwashing process – a pre‐assigned behaviour?

Global studies have observed many techniques of manual dishwashing causing different levels of performance and using quite different amounts of water, energy, time and detergent. It is not known, however, if these techniques are pre‐assigned to a person and persist when dishes are washed under different conditions, or are adapted to the specific type of dish‐cleaning process. Here we explored this question in a study with 40 test subjects selected equally from Germany and East European countries by asking them to wash two place settings of dishes with different amounts of soil three times. The results showed that the test subjects did not adapt their washing‐up behaviour to the amount of soil. In general, no significant differences were found in the water, energy and detergent consumption for all test subjects. Only the time used by the German test subjects to wash the fully soiled dishes was significantly longer compared with the dishes with only a quarter the quantity of soil, and no significant difference was observed for all other parts. The only significant difference found between the level of soiling of the dishes was the cleaning result achieved: The less soiled the dishes were, the better the final cleaning result was, and this related to all test subjects. This lends support to the proposition that the consumers did not adapt their washing‐up behaviour to the specific circumstances of the dishwashing job to be done but retained some pre‐assigned behaviour.     

Do Traditional Chinese Cultural Values Nourish a Market for Pirated CDs?

On one hand, Chinese consumers are well known for conspicuous consumption and the adoption of luxury products and named brands. On the other hand, they also have a bad reputation for buying counterfeit products. Their simultaneous preferences for two contrasting types of product present a paradox that has not been addressed in the literature. This study attempts to present an explanation of this paradox by examining the effects of traditional Chinese cultural values and consumer values on consumers’ deontological judgment of pirated CDs and the amount of social benefits they perceive they gain from them. We interviewed 300 Hong Kong Chinese consumers, and found that face consciousness increased materialism and risk aversion, thereby producing a favorable deontological judgment of pirated CDs. Face consciousness also has a direct effect on the amount of social benefits perceived in pirated CDs. Both favorable deontological judgment and perceived social benefits contributed to a strong intention to buy pirated CDs. The results are discussed in a cultural perspective.     

Do They Have Your Number? Understanding the Moderating Role of Format Effects and Consumer Numeracy for Quantitative Front‐of‐Package Nutrition Claims

Front‐of‐package (FOP) nutrient content claims are often used by food manufacturers to promote the nutrition levels of their products. In this research, two studies examine the influence of the numerical format (either percentages or absolute numbers) presented on FOP‐reduced nutrient content claims and the moderating influence of consumers' numeracy levels (i.e., consumers' ability to interpret numbers). Low numerate consumers are more strongly influenced by the label's numerical format, but results differ across nutrition attributes linked to cardiovascular disease risk. For saturated fat, low numerate consumers had more favorable evaluations of the product that had a label presented in a percent format compared to an absolute unit format. In contrast, the moderating effect of numeracy had little effect on the format of reduced sodium claims. Implications are offered for policymakers, consumer researchers, and food manufacturers .     

Do we need deeper trade agreements for GVCs or just a BIT?

The paper investigates two policies geared towards stimulating and shaping global value chains (GVCs), namely deep regional trade agreements (DRTAs) and bilateral investment treaties (BITs). In an augmented gravity model, we test the impact of both policies on a variety of trade in value added indicators. We find that both policies are likely to increase GVC trade, although their transmission channels differ. While backward linkages are stimulated through both BITs and DRTAs, forward linkages respond only to DRTAs. The estimates suggest that negotiating a DRTA with investment provisions has a higher impact on trade in value added than signing a shallow RTA and a separate BIT.     

Do we understand each other? Toward a simulated empathy theory for entrepreneurship

Entrepreneurs often face the daunting task of predicting consumer demand before it exists—what consumers will want if and when the entrepreneur might make it available to them. Such alertness and judgment require an entrepreneur's vicarious imagination—the supposition of what a value experience would be like for another—such as empathy. Prevailing theories of empathy, however, are ill-suited for entrepreneurship theory as they are defined as and focused on an emotion-matching process. We propose that empathy be understood instead as a vicarious mental simulation of another's experience that, when accurate, produces similar emotions but also similar experiential knowledge. According to our ‘simulated empathy theory,’ empathy is a rational imagination process, intentional and knowledge-based. We connect this empathy process to contemporary entrepreneurship theory, namely opportunity recognition and evaluation processes. We also revise the concept of empathic accuracy accordingly, and derive therefrom some practical implications regarding how entrepreneurs can increase their empathic accuracy and, thereby, their chances of success.     

Do We Follow the Leader or the Masses? Antecedents of the Willingness to Pay Extra for Eco‐Products

This paper reports on an experiment that tests for the existence of peer effects in consumers' willingness to pay (WTP) for sustainable products. More specifically, we investigate whether the premium for an eco‐labeled laundry detergent is sensitive to receiving information about the premium paid by other members of one's social group. The information manipulations in the experiment test for two distinct types of social influence, i.e., conformist and payoff‐biased transmission. We find strong empirical evidence for a conformist transmission. Participants informed about the positive premium paid by the majority of their peers reported a higher premium than individuals not receiving any information. This result shows that previous studies on the WTP for sustainable products, which explain premiums by attitudinal measures and sociodemographic traits, unwarrantedly provide an under‐socialized account. The inclusion of social influence variables significantly increases the explanatory power of the model.     

How do Independent Directors Influence Corporate Risk‐Taking? Evidence from a Quasi‐Natural Experiment

Motivated by agency theory, we explore the effect of independent directors on corporate risk taking. To minimize endogeneity, we exploit the passage of the Sarbanes–Oxley Act as an exogenous shock that raises board independence. Our difference‐in‐difference estimates show that board independence diminishes risk‐taking significantly, as evidenced by the substantially lower volatility in the stock returns. In particular, board independence reduces total risk and idiosyncratic risk by 24.87% and 12.60%, respectively. The evidence is consistent with the notion that board independence represents an effective governance mechanism that prevents managers from taking excessive risk. Additional analysis based on propensity score matching also confirms our results. Our research design is based on a natural experiment and is far more likely to show causality, rather than merely an association.     

Do Market‐Supporting Institutional Characteristics Explain Firm Performance? Evidence from Emerging Markets

The importance of market‐supporting institutions and their impact on business investment and economic growth has gained the attention of researchers and practitioners alike. In this study, we extend this research by capturing the impact of the quality of regulative institutional characteristics on firm performance in an emerging market context. We use a sample of 26,493 emerging market firms from 91 countries over the years 2003 to 2010 and test for the relationship between government effectiveness, regulatory quality, rule of law and control of corruption, and firm performance. Results indicate that governmental effectiveness and regulatory quality impact performance outcomes positively, while rule of law impacts performance negatively. These findings provide important insights and encourage managers and public policymakers to be cognizant of the impact of these factors and adapt accordingly. © 2014 Wiley Periodicals, Inc.