EFFECT OF FED POLICY ACTIONS ON THE DEFAULT LIKELIHOOD OF COMMERCIAL BANKS

Using a measure of default likelihood based on an option pricing method, we provide evidence that Fed policy actions affect the financial distress of commercial banks. When the Fed increases (decreases) interest rates, the measure of default likelihood increases (decreases). We show that when the Fed uses a tight money policy, the increase in default likelihood is more pronounced for banks that have less capital, have greater financial leverage, are smaller, have fewer growth opportunities, and have lower asset quality. Additionally, the effects on bank default likelihood are more pronounced when the Fed's policy signals less concern about economic growth, as indicated by its bias toward further tightening, and when there is a market expectation of higher short‐term market rates in the future.     

The Returns to Academic and Vocational Qualifications in Britain

This paper uses data from the 1991 sweep of the National Child Development Study (NCDS) and the 1998 Labour Force Survey (LFS) to provide a comprehensive analysis of the labour market returns to academic and vocational qualifications. The results show that the wage premia from academic qualifications are typically higher than from vocational qualifications. However, this gap is reduced somewhat, when we control for the amount of time taken to acquire different qualifications. This is particularly important for vocational courses, which generally take shorter time periods to complete. In the paper we also investigate how returns vary by gender, subsequent qualifications, and the natural ability of individuals. Finally, by comparing the NCDS results with those from the LFS, we estimate the bias that can result from not controlling for factors such as ability, family background and measurement error. The results reveal that the estimated returns in the NCDS equations controlling for ability, family background and measurement error are similar to the simple OLS estimates obtained with the LFS, which do not control for these factors. This suggests that the biases generally offset one another.     

Competitive and Information Effects of Cross-Border Stock Listings

We examine the effect of 269 cross‐border listings on rivals in the listing and domestic markets and find that U.S. rivals experience significant gains whereas domestic rivals do not. Both competitive and information effects are important in explaining the reaction of U.S. rivals. Regarding the competitive effects, the reaction of rivals is less favorable when listings originate in developed countries and more favorable when listing firms do not have prior operating presence in the United States. Regarding the information effects, the reaction is less favorable when listings are combined with equity offerings and more favorable when the listing is the first to occur within an industry.     

Assessing Voluntary Programs to Improve Environmental Quality

The last decade has seen a dramatic increase in the use of voluntaryapproaches (VAs) to environmental protection, which has spurned agrowing literature on the relative merits of voluntary vs. mandatoryapproaches. This paper draws on that literature to discuss both thetheoretical and empirical issues that arise in the evaluation orassessment of a particular VA. We consider both the environmentaleffectiveness and the efficiency of this policy approach. Our aim is toaid policymakers in evaluating a specific program or in thinking aboutthe use and design of a VA. We identify some key features that arelikely to increase both the effectiveness and the efficiency of VAs.     

Analyzing online reviews in hospitality: data-driven opportunities for predicting the sharing of negative emotional content

Hospitality is one of the sectors that are nowadays most heavily characterized by consumers’ tendency to share online reviews on dedicated digital platforms. While most past work has focused on understanding the effect of online reviews and ratings on consumers’ evaluation and purchase decisions, this research tackles the issue of what drives the sharing of certain types of online content. Specifically, we investigate the sharing of user-generated content characterized by negative emotional valence, and study the effect of two factors on the extent to which user-generated content contains negative emotions. One such factor is reviewer's expertise, while the other is hotel quality. Our analysis of 1200 TripAdvisor reviews on Italian hotels located in three major Italian cities confirm our hypothesis that expert reviewers might share reviews containing less intense negative emotional content compared to less expert reviewers especially when the hotel is of high quality. To support our hypothesis, we build on the research on psychological antecedents of word-of-mouth behaviour suggesting that expert consumers are particularly reluctant to share negative word-of-mouth to avoid projecting a negative image of themselves in social contexts, thus possibly damaging their reputation.     

The impact of mood states and surprise cues on satisfaction

Mood effects have been studied in consumer behavior literature, but prior research investigating the joint impact of mood and surprise on satisfaction is scant. To bridge this gap, this study examines the relationship among these three constructs. We manipulated customers’ pre-consumption mood and provided surprise cues with hypothetical scenarios in a 2 by 2 factorial design in a restaurant setting. The results show that a positive surprise yields high satisfaction without a significant effect from customers’ pre-consumption mood. Conversely, with a negative surprise, customers in a negative pre-consumption mood indicate lower satisfaction than those in a positive mood.     

Other consumers in service encounters: A script theoretical perspective

Hospitality service consumptions often involve sharing the service environment with other consumers. Drawing upon the Script Theory, this research provides a theoretical perspective of consumer responses to behaviors of other consumers in service encounters. The results from an experimental study provide strong support for the dual-mode consumer responses (felt emotions and displayed emotions) and for the moderating effect of psychological closeness on consumer responses. Managerial implications for training, service management and service design in hospitality businesses are also discussed.