Monopoly with local knowledge of demand function

In this note, we propose a model where a quantity setting monopolist has incomplete knowledge of the demand function. In each period, the firm sets the quantity produced observing only the selling price and the slope of the demand curve at that quantity. Given this information and through a learning process the firm estimates a linear subjective demand curve. We show that the steady states of the dynamic equation are critical points of the objective profit function. Moreover, results depend on convexity/concavity of the demand. When the demand function is convex and the objective profit function has a unique critical point: the steady state is a globally stable maximum; conversely when then steady state is not unique, local maximums are locally stable, while local minimums are locally unstable. On the other hand when the demand function is concave, the unique critical point is a maximum: there can be stability or instability of the critical point and period two cycles around it via a flip bifurcation. Moreover, through simulations we can observe that, with a mixed inverse demand function, there are different dynamic behaviors, from stability to chaos and that we have transition to complex dynamics via a sequence of period-doubling bifurcations. Finally, we show that the same results can be obtained if the monopolist is a price setter.     

Do accounting standards matter to financial analysts? An empirical analysis of the effect of cross-listing from different accounting standards regimes on analyst following and forecast error

This paper explores whether the effects of cross-listing on analyst following and forecast error differ among firms with different accounting standards. The results reveal a higher increase in the number of analysts for cross-listed firms that follow their home country's GAAP prior to cross-listing and reconcile or switch to IAS/US GAAP or UK GAAP after cross-listing, compared to those that adopt IAS or US GAAP prior to cross-listing. We find that firms that switch to IAS/US GAAP have a higher increase in analyst following after cross-listing compared to firms that reconcile to IAS/US GAAP. In addition, we find a higher increase in analyst following after cross-listing for firms from low-level accounting standards environments compared to firms from high-level accounting standards environments. Our results show evidence of an increase in the magnitude of analysts’ forecast error after cross-listing for firms that follow their home country's GAAP pre-cross-listing but reconcile post-cross-listing to IAS/US GAAP or UK GAAP. On the other hand, we report a decrease in forecast error for firms that switch to IAS/US GAAP.     

The effect of hospitableness and servicescape on guest satisfaction in the hotel industry

This paper aims to investigate the influence of hotel hospitality on hotel guest satisfaction along with the moderating effect of the hotel servicescape on the relationship between hospitality and satisfaction. In this preliminary study, which involved 403 hotel guests in Malaysia, we employed a questionnaire survey as the main method of data collection. The structural equation modelling (CFA) used to assess the model revealed a good fit. A hierarchical moderated regression analysis was performed and showed statistical support for the positive influence of hotel hospitality on guest satisfaction as well as a positive moderating effect of servicescape. Copyright © 2013 ASAC. Published by John Wiley & Sons, Ltd.     

New information technology in India: The electronics riddle

The paper provides a critical assessment of India's electronics policy from its very inception to the present time. It is argued that despite its narrow scope and many shortcomings, the Indian government's new electronics policy based on the principle of liberalization is a step in the right direction. A much wider and speedier development of advanced electronics technology and its application in critical areas—e.g., transport and communication systems—is recommended for India and other similarly situated “non-electronic” developing countries. The implication of missing the electronics revolution by these countries would be their continuing dependence and backwardness.     

Internal Finance and Corporate Investment

This paper examines Pecking Order/Free Cash Flow behavior in small ($25–$50 million), medium ($100–250 million), and large ($1000 million and over) firms. The purpose is to proffer an explanation for the important role of cash flow on the investment expenditure of firms that is more complete than the commonly given accounts. The Pecking order theory (PO) emphasizes the value‐enhancing influence of cash flow, while the free cash flow hypothesis (FCF) underscores its value‐destroying effect. Using the vector error correction model, we find that although the overall behavior of small firms support the pecking order theory, the cash flow of these firms does not have any causal effect on their investment. We further find evidence of free cash flow theory in large firms.     

KLSE Long Run Overreaction and the Chinese New-Year Effect

This study investigates long run overreaction and seasonal effects for Malaysian stocks quoted on the Kuala Lumpur Stock Exchange (KLSE), for the period 1986–1996. Stocks exhibiting extreme returns relative to the market over a three year period experience a reversal of fortunes during the following three years. There is also evidence that employing a contrarian trading strategy may yield excess returns. Of particular interest is the apparent existence of a Chinese New Year effect in both the level of market returns, and the overreaction profile for KLSE stocks. These seasonalities mirror the January-effect observed in US markets.     

Dynamics of Wheat Prices in the Wake of Market Reforms: The Case of Pakistan

Using Autoregressive Conditional Heteroskedastic (ARCH) method, this paper examines the effects of market reforms on the distribution of real mean prices and their variability before and after reforms. It is found that market-oriented reforms benefited producers and consumers alike. Empirical evidences, generally, support theoretical assertion that mean prices decline in most urban areas and increase in those markets that are located in surplus producing areas. The results also showed that market reforms lead to more price volatility.     

Policies and strategies for sustainable development in Bangladesh

The concept of sustainable development, its relevance for Bangladesh, and policies and strategies for promoting it in Bangladesh are discussed. Economic growth, population growth, mobilization of resources, the role of women, devolution and decentralization, equity and protection of the environmental base are treated as key issues, with emphasis given to the effective implementation of strategies for promoting sustainable development.